7997038195_d2c6451e20_o
SHARETweet about this on TwitterShare on FacebookEmail to someonePrint this page

This Week’s Outsourcing Scan 11-28-2016

1) National: After insisting on the campaign trail that he would leave Medicare alone, Donald Trump’s transition website is now signaling that he will support House Speaker Paul Ryan’s scheme to privatize the program and replace it with a skimpy voucher plan. In a letter to the editor of The Des Moines Register, which has been reporting on and editorializing against Iowa governor Branstad’s disastrous Medicaid privatization program, John Beisner warns the rest of the U.S. to “get familiar with the term privatization.”

Beisner also draws a line between Trump’s Medicare and infrastructure privatization schemes. “Speaking of privatization, Donald Trump’s economic advisers have floated a plan to pay for his promised massive infrastructure bill. Their plan: Allow private investment firms to invest 20 percent of the cost and recoup their money through tolls on highways and bridges. Notice the pattern — privatize and turn over the profit to wealthy investors?” And, he says, “be assured they will not stop with these two issues — next are schools, National Parks, U.S. Postal Service and prisons.”

2) National: In the December 8 issue of The New York Review of Books, Diane Ravitch spells out the implications of Donald Trump’s education plan. “When Public Goes Private, as Trump Wants: What Happens?

3) National: Donald Trump names an opponent of public education as secretary of education. Betsy DeVos, a billionaire political activist from Michigan with close ties to the religious right, has been funding pro-charter school and voucher political campaigns for decades. “For 10 years, DeVos led an organization that calls for the reinstatement of child labor. From 1995 to 2005, she sat on the Board of Directors for the Acton Institute and has given $1.28 million to support the organization since 2000. (…) A November 3, 2016 blog post by the Acton Institute is titled: ‘Work is a gift our kids can handle.’ The blog argues that turn of the 20th century photographs of young children with their faces covered in coal dust from mining ‘represent the faces of those who are actively building enterprises and cities, using their gifts to serve their communities, and setting the foundation of a flourishing nation, in turn.’ The article quotes another recent pro-child labor article noting that being a child coal miner is ‘an exciting life’ and that ‘if kids were allowed to work and compulsory school attendance was abolished, the jobs of choice would be at Chick-Fil-A and Walmart. And they would be fantastic jobs too …’”

4) National: As the nation waits to see if the Trump administration will boost the profits of private prison companies with a wave of new immigrant detainees, Kris Kobach is reportedly under consideration for the post of head of DHS, with a supervisory role over the Immigration and Customs Enforcement agency. Kobach is the radical right wing former attorney general of Kansas who is the principal author of Arizona’s draconian “papers please” immigration law. On his way into a meeting with Trump, Kobach was videoed carrying a document that laid out a possible massive surveillance program recommending that “high-risk aliens” be “tracked.” CoreCivic and the GEO Group have been pursuing a vigorous strategy to pivot toward a profit-making focus on surveillance technologies. [Southern Poverty Law Center research on Kobach]

According to the market research firm IBISWorld, the business of holding people awaiting deportation accounts for 21 percent of the private detention industry, estimated at $5.3 billion in the United States.

5) National: Wilbur Ross, the co-author of Donald Trump’s blueprint for a massive involvement of private financing in a $1 trillion infrastructure plan using tax credits, is expected to be nominated as the next commerce secretary. Ross, a billionaire distressed asset investor, was Rudolph Giuliani’s privatization adviser. He is also one of the cheerleaders for the EC-ECB-IMF imposed austerity program for Greece and anti-union fire sale privatization of its public assets. “‘The privatizations really will go forward,’ Ross told CNBC’s ‘Squawk Box’ [last year]. ‘Transferring those activities which are highly unionized [and] highly left-wing out of the direct control of the government … that’s a huge, big deal.’”

6) National: Hanna Kozlowska of Quartz says that the federal government is already backing away from its commitment to phase out private prisons, citing recent contract renewals by the Bureau of Prisons and the election of Donald Trump. “‘We are actually anticipating that the DOJ decision be quite possibly overturned. Either formally or they would be renewals or re-granting of the full contracts,’ said Bethany Carson at Grassroots Leadership, a prison advocacy organization. What has Carson and her group particularly worried is the president-elect’s promise to introduce mandatory minimums for illegal re-entry convictions after a previous deportation. Illegal entry and re-entry convictions already make up nearly half of federal prosecutions. The convicts are mostly held in thirteen so-called ‘Criminal Alien Requirement’ (CAR) prisons, run by private companies, largely CoreCivic and GEO. Both facilities with which the BOP extended its contracts are CAR prisons Carson said that mandatory minimums would send average sentences for re-entry ‘through the roof,’ and would require expanding the private prisons the DOJ said it would close in August.”

7) National: Joel Moser, an infrastructure investor, says he has an idea of “How to Fix the Trump Infrastructure Plan.” It basically boils down to a major expansion of subsidies/profit guarantees (“availability payments’), and several specific fixes: 1) cut out local and state agencies from major regional infrastructure projects (local government, he say, is “a massive impediment to prudent infrastructure development”); limit tax breaks to greenfield, or greenfield-generating projects (notwithstanding the major need for brownfield investment too); federal support payments akin to HUD Section 8; and, finally, “recognize that it will be years before the American public would tolerate a major shift to user fee based infrastructure finance so that anything close to a trillion dollars of new development will certainly require federal spending, either in direct outlays of dollars upfront or over time in the payment of availability or similar payments that support private financing.”

8) National: Publicly-funded forensic crime laboratories continue to improve by the number accredited, performance, and services provided. “The findings are based on the Census of Publicly Funded Forensic Crime Laboratories, which collects data on the budgets, staffing, workload, outsourcing and quality assurance practices of federal, state, county and municipal crime labs nationwide. Private labs were not included in the census.”

9) National: Who will be Donald Trump’s transportation secretary, overseeing the department’s TIFIA program and private financing office during his $1 trillion infrastructure plan? Speculation is that a number of people could fill the spot, including former Democratic congress member and now Morgan Stanley banker Harold Ford, Jr., and Rep. Lou Barletta (R-PA). Former Rep. John Mica (R-FL) is also angling for the job.

10) District of Columbia: Mayor Bowser selects a pro-charter school outsider, Antwan Wilson, the superintendent of schools in Oakland, California, to head the DC public schools. “Wilson’s overhaul of special education services, which he framed as an effort to bring children with disabilities into mainstream classrooms, drew resistance from parents. His friendly stance toward charter schools stoked fierce objections from parents and teachers who accused him of trying to privatize public schools.”

11) Indiana: Opponents plan to demonstrate against the granting of a liquor sales license to a politically favored developer in a state park. “The state Natural Resources Commission will hold a public hearing regarding alcohol in state parks. It is virtually nothing more than a housekeeping measure, but those opposed to allowing liquor at Indiana Dunes State Park likely will take advantage of the public forum to again express their displeasure at legislation allowing liquor at state parks.” The legislation was backed by Gov. Mike Pence.

12) LouisianaGov. Edwards rehires Tommy Teague to run the health insurance program for state workers and retirees. Teague had resisted Gov. Bobby Jindal’s effort to privatize the agency and was fired. “In a statement, Edwards’ Commissioner of Administration Jay Dardenne says Teague has a ‘proven record of success in the agency.’ Teague says he is ‘anxious to return to work.’”

13) LouisianaEast Baton Rouge prison health services will be privatized to CorrectHealth LLC, a Georgia-based for-profit. “The nurses complained more than a year ago that they were dangerously understaffed, needed more supplies and better direction. (…) Over the past few months, many nurses have questioned whether they cost themselves their jobs by speaking out. Metro Councilwoman Chauna Banks warned Tuesday that the council could see unintended consequences as a result of the nurses losing their jobs.”

14) Maryland: The battle over Montgomery County’s publicly-run liquor distribution system continues as county executive Ike Leggett releases a plan that would retain the liquor monopoly in public hands, along with its $30 million a year in profits. But the Washington Post is determined to make the unions the villains of the piece. “The real obstacle to privatization seems to be a reluctance to do battle with the union that represents some 350 DLC employees who staff the warehouse, delivery trucks and 25 county-run liquor stores.”

15) MassachusettsIt’s time to rethink the use of for-profits in public service, says Abby Scher, a sociologist and research fellow at Political Research Associates in Somerville. “Even red states are realizing that handing over the keys to essential government services can be good for private sector profits but bad for the public. Last year, Texas passed contracting reform after scandals exposed politicians channeling sweetheart deals to businesses. But the state of Massachusetts is running in the other direction. If a Department of Mental Health privatization plan clears the courts, 5,700 clients and their families will have access to 28 percent fewer licensed mental health professionals working for contractors in southeastern Massachusetts. That area includes Brockton, Cape Cod, Fall River and Taunton/Attelboro. Why is this happening, not only in mental health but also in public transit? Consistently supporting the drive to privatize public services are well-funded conservative think tanks and business lobbyists who push the practice even though the record shows it often involves cronyism and generally falls short of promises to improve cost and quality.”

16) MassachusettsA TransDev driver operating a Boston Public Schools bus for the Boston Renaissance Charter Public School has been suspended following an incident in which a six year old allegedly sexually assaulted other students on the bus. “The mother said she wondered how the bus driver did not notice what was happening during any of the alleged 10 assaults.”

17) New Jersey: The Atlantic City emergency manager’s report may provide some clues about the Christie administration’s future plans for the city. Privatization will be on the agenda. “The second Lavin report suggested dissolving the Municipal Utilities Authority and having Atlantic County help run it. It mentioned monetizing Bader Field and Gardner’s Basin. And it called for outsourcing trash and recycling collection, regionalizing police and privatizing fire services. ‘I think something happens with the MUA,’ said Sen. Jim Whelan, D-Atlantic, a former Atlantic City mayor. ‘On the other hand, the notion of a county police force did not seem to be embraced by the city or the county, so I don’t think that’s going to occur. But this is a new deal. Maybe everything gets revisited.’”

18) New York: The Journal-News calls for the rushed process to privatize Westchester County Airport to be put on pause so lawmakers can have adequate time to analyze the deal and see if it makes sense. “It is therefore unreasonable for the Westchester County Board of Legislators to have to decide whether to support the proposed lease by Dec. 27. (…) Legislators are looking at a tricky political situation, cunningly crafted by [Westchester County Executive Rob Astorino]. But they must put aside the lease deal for now. It should be re-examined in 2017—after Astorino seeks other bids and lawmakers have the time to fully research the long-term implications of airport privatization. Astorino unveiled the lease deal earlier this month, giving legislators only a few weeks to familiarize themselves with it, do their due diligence and approve it as part of the county budget. He presented it as a take-it-or-leave-it gambit, telling legislators they would have to fill a $15 million hole in his budget plan if they did not approve the lease. The implication was that the proposed lease was beyond question, a neatly wrapped package that was seamlessly vetted by his office and the best possible economic deal — despite the lack of a bidding process.”

19) Pennsylvania: The Philadelphia regional port authority has issued a Request for Qualifications for a “public private partnership” to develop maritime businesses at the Southport Marine Terminal Complex along the Delaware River. [Sub required]

20) TennesseeDurham School Services, one of the leading outsourcing companies for school bus drivers, faces intense criticism after a horrific crash that killed six children in southeastern Tennessee. The Durham bus driver was the subject of repeated complaints about reckless driving. “On Tuesday, NTSB Chairman Christopher Hart said they will scrutinize the driver and Durham School Services. ‘We’ll be looking at the company and into their past, who they hire and train,’ Hart said. ‘We have not done any of that yet, but that will be part of the investigation.’ Federal records show Durham has had problems with driver fitness, including drivers being caught without commercial licenses.”

21) Texas: Beaumont Mayor Becky Ames declares that talk of outsourcing the city attorney’s office is over. “The city has 11 operating departments and 35 divisions and 1,300 employees. Two of the departments—the police and fire departments—are covered by contracts, which the city attorney’s office negotiates, he said. Department heads continually seek legal advice from the city attorney’s office, and Cooper said the office is available for any of the city’s 1,300 employees in connection with their jobs. ‘I’d be at a loss if they were outsourced,’ Ames said. ‘I don’t see how it would work. If you called an outsourced lawyer, you’d be charged in 15-minute increments.’ The city attorney’s office has one client only, and that is the city, Cooper said.”

22) Think Tanks: A new foundation—the Texas Foundation for Conservation—has been established to protect the state’s fish and wildlife from the threat of privatization. “‘Those who love Texas fish and wildlife are increasingly concerned about the threat of privatization,’ said Dr. Fred Bryant, director of the Caesar Kleberg Wildlife Research Institute at Texas A&M University-Kingsville and president of Texas Foundation for Conservation. ‘Native fish and wildlife are no different than our beaches and waterways–they belong to all Texans. We strongly believe our wild natural resources belong to the people of Texas, and we’re committed to engaging Texans in efforts to ensure that the fish and wildlife we all treasure will be around for our kids and grandkids.’”

23) Think Tanks: The Cato Institute renews its call for the complete privatization of the Veterans Administration’s health care system, despite the fact that no major veterans’ group is doing so. One of the supposed side benefits is “it could help prevent unnecessary wars” because “the added risk of deaths and injuries would cause premiums to rise.”

Legislative Issues

1) National: Congressional lawmakers are wary of Donald Trump’s infrastructure plan because of “the tax credits that underlie the plan and its reliance on investments by the private sector to fund 10 years of transportation projects,” according to The Bond Buyer. “Sen. Bernie Sanders, I-Vt., said Tuesday that he would re-introduce in January a five-year, $1 trillion infrastructure plan that he first proposed in January 2015. ‘The plan [Trump] offered is a scam that gives massive tax breaks to large companies and billionaires on Wall Street who are already doing phenomenally well,’ Sanders said. ‘Trump’s plan is corporate welfare coming and going.’”

Sen. Chuck Schumer
 (D-N.Y.) “ruled out potential revenues from international tax reform to finance the effort. (…) ‘It just doesn’t bring in the dollars you need,’ he said. ‘That infrastructure bill has to have certain things for us to support it. It can’t just be tax credits. That won’t be enough.’”

House minority leader Nancy Pelosi
 (D-CA): “We must insist on a bill that puts good-paying jobs for workers first, not one that is a corporate tax break disguised as an infrastructure bill,” she said.

Senate minority whip Sen. John Cornyn
 (R-TX) “said Republicans cannot support international tax reform and tax credits that could add to the federal deficit.”

2) Pennsylvania: The Lehigh Valley Express Timewants to launch a new campaign for liquor privatization. “Changes in the makeup of the Legislature in the Nov. 8 election may be putting more [liquor] pro-privatization people in office soon — the Senate, unlike the House, now has a veto-proof majority — but Wolf’s resistance to the full monty seems unlikely to waver in the next two years. He vetoed the last legislative attempt at privatization in 2015.”

 

We’d love to hear from you. Send us an email: info@inthepublicinterest.org.

Want one story about defending public goods and services from privatization (private prisons, charter schools, for-profit water, etc.) each week in your inbox?  Sign up for our weekly newsletter.