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* Reuters expands on its story from earlier today about the Moody’s bond rating downgrade. We’re now the second-lowest rated state in the nation. Man, this is not good…
The downgrade gave Illinois the second lowest U.S. state rating from Moody’s, with California having the lowest at Baa1, a Moody’s spokesman said.
How many minutes before this winds up in a TV ad?
Three… two… one….
* The Sun-Times has a brief post online about the AFL-CIO endorsements…
A spokesman for state Comptroller Dan Hynes said they were thrilled the organization gave a “stinging rebuke” of the sitting Democratic Governor, Pat Quinn, by not endorsing him.
But Quinn’s office was reportedly happy the union did not endorse Hynes, who has racked up an impressive number of union endorsements for a challenger, including the Illinois Federation of Teachers on Monday.
I’ll have more on this for subscribers tomorrow, but I think Hynes got what he wanted here, and Quinn fumbled what should’ve been a sure thing, but in the end dodged a political bullet.
* In other campaign/endorsement news, Steve Rauschenberger has endorsed Dan Proft for governor…
This morning on the Don Wade & Roma Morning Show on WLS-AM 890, former State Senator Steve Rauschenberger endorsed Dan Proft for Governor in the Republican 2010 primary. […]
“I am proud to endorse Dan Proft’s candidacy for Governor because Proft is the only candidate who has properly diagnosed what afflicts state government and is prescribing the right policy remedies,” said Rauschenberger, who is seeking to regain his old senate seat currently held by State Senator Michael Noland (D-Elgin)
“The other candidates believe we have a management problem in state government. Proft correctly understands that it is a system problem.”
Rauschenberger, a well-respected former member of the Senate Appropriations Committee and lead budget negotiator for the Senate Republicans, cited Proft’s plans to cut taxes and impose statutory spending caps in his endorsement.
* And the Kane County Board voted this morning to opt out of legalized video gaming…
In a 12-11 vote, board members narrowly approved a measure that bans the practice of legal video gambling in businesses in unincorporated Kane County.
The measure, of course, applies only to unincorporated areas of the county.
* Also, the US Supreme Court is hearing the “honest services” case today and is asking some tough questions…
They peppered federal government lawyer Michael Dreeben with questions about the so-called honest services law that’s commonly used to prosecute corporate executives for fraud.
Justice Stephen Breyer was particularly forceful, suggesting that under the law a U.S. employee could be charged for going to a baseball game on company time because prosecutors could argue the worker was depriving his employee of honest services.
There are 150 million workers in the United States, Breyer said, and 140 million of them would “fail your test,” he told Dreeben.
And…
Justice Stephen Breyer said he worries that the Obama administration’s interpretation of the law could be used to criminalize huge swathes of the U.S. workforce for such offences as reading The Daily Racing Form on the job.
And…
Justice Antonin Scalia repeatedly criticized the law for being “inherently vague” and said Congress should have been more specific.
He said that not even the Justice Department can figure out exactly what activities the law covers. “I don’t see how you can expect the average citizen to figure it out,” Scalia told the government lawyer.
Justice Anthony Kennedy said vagueness “is the lurking problem here” while Justice Ruth Bader Ginsburg said lower courts have been “massively confused” about the law’s reach.
*** UPDATE 1 *** From the Quinn campaign…
As a former member of the Teamsters and the United Food and Commercial Workers, Governor Quinn is honored by the support he has received from organized labor. To date, Governor Quinn’s campaign has received endorsements the Service Employees International Union, the United Auto Workers, the International Brotherhood of Teamsters Joint Council 25 and several other major unions. Together, the labor groups that have endorsed Governor Quinn represent more than 450,000 hard-working men and women.
Union leaders have praised Governor Pat Quinn’s vision of economic development and his effective leadership in passing Jobs and Growth for Illinois, the state’s first comprehensive public works program in more than a decade. Over the next six years, Illinois Jobs Now! will create and retain more than 439,000 jobs, helping to revive Illinois’ economy.
Throughout his entire career, Governor Quinn has been proud to stand with organized labor, walking picket lines and speaking out when workers’ rights to health coverage, decent work conditions, and fair compensation have been threatened or unfairly taken away.
*** UPDATE 2 *** Comptroller Hynes responds to the Moody’s downgrade…
This report confirms what I’ve long said. Illinois state government’s habit of spending more money than it takes in is harming the state’s ability to rebound from the downturn in the economy, making it more difficult for businesses to thrive, for people to find and keep work and for this state to move forward.
The rating agency obviously took issue with the delay in any meaningful resolution of the state’s fiscal situation until February.
It also confirms that undertaking additional short-term borrowing, when the state already owes $2.25 billion in short-term borrowing, is a bad idea.
*** UPDATE 3 *** From the governor’s office…
Moody’s downgraded the State of Illinois’ General Obligation Bonds and Build Illinois Bonds one notch from A1 to A2. This downgrade is the result of the nationwide economic downturn and the long-term mismanagement of the state’s finances. It underscores the urgency for solutions and emphasizes the need to take action immediately.
The Quinn administration has been examining and exhausting every possible remedy to solve the budget crisis. The administration has proposed budget cuts, borrowing, revenue increases, and has asked for help from the federal government. We need everyone to work together and compromise for the common good to come up with solutions to solve this budget crisis.
posted by Rich Miller
Tuesday, Dec 8, 09 @ 2:18 pm
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Sounds like “bankruptcy” to me.
Comment by Publius Tuesday, Dec 8, 09 @ 2:29 pm
Sound like honest services is on its way out.
Comment by wordslinger Tuesday, Dec 8, 09 @ 2:30 pm
There is an old joke that said the state motto of Arkansas was “Thank God for Mississippi,” because otherwise Arkansas would be dead last in many categories such as education, health care, poverty, etc. And there was once a time when Illinois would love to be neck and neck with California in national rankings.
Now we’re looking up to Mississippi? Ouch.
Comment by 47th Ward Tuesday, Dec 8, 09 @ 2:30 pm
Rich,
I think you mean “Democrat Steve Rauschenberger has endorsed Republican Dan Proft for governor.”
– MrJM
http://twitter.com/misterjayem
Comment by MrJM Tuesday, Dec 8, 09 @ 2:30 pm
Good thing Blago didnt get tried and convicted under honest services charges, since it looks like he could have had that part of his case thrown out, and argued it contaminated the rest of the verdict.
Fortunetly Blago’s atorney’s helped maneuver his case to get this weakness removed.
Comment by Ghost Tuesday, Dec 8, 09 @ 2:33 pm
===I think Hynes got what he wanted here===
I think the AFL-CIO got what they wanted here too. They send Quinn a bit of a message yet avoid taking sides in an increasingly hostile gubernatorial race. If they endorsed Hynes and he loses the primary, that looks bad in two ways: 1) (in my opinion) it weakens the weight of their endorsement slightly; and 2) it puts them in an unenviable position of endorsing Quinn after saying he wasn’t the right person to have the Dem nomination.
Also, MrJM, you sir, are on a roll today.
Comment by Obamarama Tuesday, Dec 8, 09 @ 2:34 pm
At least since Steve messed up his own candidacy, he won’t have to worry about being a Senator again with the new GOP Gov (who will not be Proft). Proft is the only GOP candidate who would be a guaranteed loser in Nov. to either Hynes or Quinn.
Comment by Suburbs Tuesday, Dec 8, 09 @ 2:49 pm
We’re also number 2 according to the Pew Center for the States. In their recent report on state finances, we have the 2nd largest budget of any state, right beyond (yes, you guessed it!) California. That gap is projected at 47%, meaning that we don’t have the revenue to cover nearly half of all non-entitlement state expenses.
Looking at it another way (hello GOP gubernatorial candidates), in order to cut our way out of the deficit, we’d have to cut half of the non-entitlement expenses.
The state of denial in Springfield has gotten way, way out of hand, and it’s time for some new leadership in the legislature.
Publius - I think we crossed a major threshold last week when Kurt Erickson wrote the first news article that I’ve seen questioning whether Illinois could wind up in bankruptcy.
Comment by Jonathan Goldman Tuesday, Dec 8, 09 @ 2:55 pm
A dubious distiction indeed-who would want to be Governor of IL?
Comment by Loop Lady Tuesday, Dec 8, 09 @ 3:00 pm
So I guess if Kane County thinks gambling is so bad they would be willing to give up that casino revenue then….
Comment by OneMan Tuesday, Dec 8, 09 @ 3:15 pm
Yes, who would want to be governor? If Quinn should lose the primary, it might be the best thing that ever happened to him. The next governor is gonna be in a world of hurt. And Johnny G. is right…denial ain’t a river in Egypt. But until the legislature understands this, Illinois is going to be the next California. But I’m willing to bet that the majority of incumbents will be re-elected.
Comment by Deep South Tuesday, Dec 8, 09 @ 3:18 pm
Everybody knows we’re in trouble, and the ratings are a reflection of that.
But let’s not forget, the rating agencies were the ones who sold the economy down the river with the subprime mortgage securities.
Fascinating article here on how Moody’s purged their own people who were sounding alarm bells.
http://www.mcclatchydc.com/227/v-print/story/77244.html
Comment by wordslinger Tuesday, Dec 8, 09 @ 3:27 pm
It’s too bad that voters in the 22nd Senate district may only have the choice between bad (Noland) and worse (Rauschenberger). Steve used to have a bright future but the “new Democrat” has let his arrogance ruin his future.
Maybe Wegman will get on the ballot. She can’t be any worse.
Comment by 4 percent Tuesday, Dec 8, 09 @ 3:35 pm
Re: Moody’s article: I like the description of the objectives for the “culture change”. lol
Comment by Anonymous Tuesday, Dec 8, 09 @ 3:36 pm
I would say that Rauschenberger commands a lot of respect among most in the Illinois GOP. The fact that Rauschenberger endorsed Dan Proft over the other Republican gubernatorial candidates certainly has to be a very positive development for Dan Proft’s campaign.
Comment by The Prophet Tuesday, Dec 8, 09 @ 3:40 pm
Jonathan,
Actually, the Pew ranking had Illinois considerably lower than California. You might be referring to the budget gap numbers in the Pew report, but those are compiled by the Center for Budget and Policy Priorities.
More importantly, I’m pretty sure Illinois already had the second-lowest bond rating before this latest downgrade, if not by Moody’s, than by other ratings agencies.
Comment by Just Sayin' Tuesday, Dec 8, 09 @ 3:49 pm
I find the comments from the supreme court justices to be very interesting. Thiwhole honest services thing is very questionable. How many people have been in jail for how many years due to a law which may be struck down?
Comment by anon Tuesday, Dec 8, 09 @ 3:51 pm
Just Sayin’ - I must have been typing too fast in my outrage. Yes, I meant to say budget gap.
Deep South - thanks for the shout out. For the record, I’m a candidate for state rep running against an incumbent, so I hope that not all of them are re-elected!
Comment by Jonathan Goldman Tuesday, Dec 8, 09 @ 3:58 pm
If the “honest services” law does get struck down, what recourse will we have against the kind of abuses Blago was known for?
Comment by Bookworm Tuesday, Dec 8, 09 @ 4:11 pm
Wow. Scalia, Breyer, Kennedy, and Ginsburg seemingly all on the same page doesn’t bode well for the Honest Services Fraud statute as currently written. I don’t know if this means the law will be scrapped entirely, but it certainly appears that it will be more narrowly interpreted.
Comment by The Doc Tuesday, Dec 8, 09 @ 4:11 pm
Here is the line I have been waiting for…”Rauschenberger, a well-respected former member of the Senate Appropriations Committee and lead budget negotiator for the Senate Republicans, cited Proft’s plans to cut taxes and impose statutory spending caps in his endorsement.”
Of course we know trys to pretend the pension mess and the unpaid medicaid bills only started after Republicans ended their brilliant leadership….. Right.
I am sure all we agree that Rauschie’s endorsement of One Liner Dan clearly trumps StateWideTom’s power packed backing of OutsiderAndy.
This race just takes our breath away.
Comment by CircularFiringSquad Tuesday, Dec 8, 09 @ 4:18 pm
The more I think about it, there’s something surreal about Moody’s knocking down states’ ratings and threatening the AAA ratings of the USA and UK.
It was Moody’s and the others that gave AAA ratings to the subprime mortgage securities. The resultant financial meltdown when those securities turned out to be junk is the prime reason for the recession, unemployment and crash in state and federal revenues.
Some chutzpah at work there.
Comment by wordslinger Tuesday, Dec 8, 09 @ 4:19 pm
===To date, Governor Quinn’s campaign has received endorsements the Service Employees International Union[…]===
Proofreader? We don’t need no stinking proofreader! We’re a team of professional political operatives!
Comment by Obamarama Tuesday, Dec 8, 09 @ 4:25 pm
Re: Update #1
Surely AFL-CIO is aware of all of that, and still it decided not to endorse him. Well, at least the Quinn campaign didn’t issue a “the AFL-CIO likes us both and just couldn’t decide” type of statement.
Comment by Anonymous Tuesday, Dec 8, 09 @ 4:25 pm
Leave the Quinn campaign spokespeople alone, Obamarama! Can’t you see their giddy from all of their spin?
Comment by Anonymous Tuesday, Dec 8, 09 @ 4:28 pm
glad that common sense is finally coming regarding this so-called “honest services” law. overzealous but lazy prosecutors will not have this trumped up statue to fall back on any more. its about time.
Comment by DNA Man Tuesday, Dec 8, 09 @ 4:53 pm
Spin it anyway you want. Dan Hynes has been badgering Hynes has been badgering Mike Carrigan since January. Not just in Chicagoland but in Springfield too. This non-endorsement is a blow to Hynes. Just ask Hynes how many times he called and took Mike out to drinks, lunch and dinner. Don’t take it from me. Ask Dan Hynes.
Comment by Burrito Bandit Tuesday, Dec 8, 09 @ 4:58 pm
BB, I don’t think I’d use the word “badgering.” They’ve never complained to me about Hynes, and I talk to them quite often. Just a few minutes ago, in fact.
Comment by Rich Miller Tuesday, Dec 8, 09 @ 5:03 pm
hmmm… and what, pray tell, was Pat Quinn doing to woo Mike Carrigan? Please don’t insult yourself by lying and saying he did nothing and was just touting his record and stances on labor over the years.
Comment by Anonymous Tuesday, Dec 8, 09 @ 5:04 pm
Finally, the Supreme Court is addressing that stupid “honest services” nonsense. Good lord, 99.9% of the workforce of the City of Chicago, Cook County and state of Illinois could be prosecuted under that junk–private sector employees also. I always tried to get a better feel for that charge, I always figured it had already passed a good challenge since it was used so much, I guess I was wrong. Its time to throw that turkey out.
same thing for Quinn. too much borrowing and bad fiscal policy=low bond rating. But Republicans, don’t think you’re much better. The Dems have proposed little; the GOP has proposed nothing as Rich has correctly pointed out in several posts.
Comment by this old hack Tuesday, Dec 8, 09 @ 5:18 pm
Wow. Is that Will County Woman posting under Anonymous beginning with 4:25pm on? Sure sounds like her.
Comment by Anonymous Tuesday, Dec 8, 09 @ 5:27 pm
===”It was Moody’s and the others that gave AAA ratings to the subprime mortgage securities. The resultant financial meltdown when those securities turned out to be junk is the prime reason for the recession, unemployment and crash in state and federal revenues.”===
We’re dealing with “reformed sinners” here - remember, these folks are now trying to find a way to stay in business, because there’s still lots & lots of credit issues to be dealt with which these different rating agencies were/are in up to their eyeballs (think of commercial real estate loans/value as an excellent example).
All Moody’s is trying to do is to get ahead of what they see as one more very potential problem area, which is the entire local/state government tax exempt bonded indebtedness. The concept of having an entire series of states defaulting on outstanding bonded indebtedness due to budget failures scares the crap out of the rating folks for good reason - it could be the end of all of them.
Nothing like having to try to do business with a bunch of reformed sinners….
Comment by Judgment Day Is On The Way Tuesday, Dec 8, 09 @ 5:34 pm
==It was Moody’s and the others that gave AAA ratings to the subprime mortgage securities.==
Suddenly Moody’s has figured out that yes, it is possible to go bankrupt if certain conditions are not met. Real estate values can decline and state governments can go bankrupt.
Surely the sparkling risk of the City of Chicago can shoulder new borrowing. Is that not why the parking meters and the Skyway were leased?
Tick tock Mr. Speaker.
Comment by Brennan Tuesday, Dec 8, 09 @ 5:38 pm
I don’t pretend to be the smartest or most articulate poster on this site.
But. Truly.
I have not heard any good, easy way out of this mess. There is none I guess. I’m a cynic as are many people who post here, IMHO.
Has anyone heard, any good ideas?
The best I can think of is, reduce spending as much as possible (14% is a start) but there has to be an increase in taxes. I’d accept a temp. tax. Really. this is serious. sorry for this less than brillant post.
Comment by Ill_will Tuesday, Dec 8, 09 @ 5:56 pm
–Surely the sparkling risk of the City of Chicago can shoulder new borrowing. Is that not why the parking meters and the Skyway were leased?–
Interestingly enough, the city-issued Skyway revenue bonds were in default for 20 some years. If I recall correctly, the state cured the defaults in the 90s as a result of some master end-of-session Christmas tree that included a McCormick Place expansion and some coal scrubbers down south.
Comment by wordslinger Tuesday, Dec 8, 09 @ 6:14 pm
Back during the 2004 Senate Race, the Illinois AFL-CIO endorsed Hynes over Barack and that didn’t seem to matter at the end of the day. Working people heard Barack’s message and went their own way. I don’t see how this non-endorsement can be a win for Hynes since he has had a 12 year relationship with the organization. They are just telling these two to take it outside but make up at the end of the day.
Comment by Irish Eyes Tuesday, Dec 8, 09 @ 6:20 pm
p.s. Given this new budget news, when are social service providers going to finally get paid?? Some of us still have to christmas shop before all the Zhu Zhu’s are gone.
Comment by Irish Eyes Tuesday, Dec 8, 09 @ 6:23 pm
Quinn not getting an endorsement is a “stinging rebuke”? Doesn’t seem that way to me. The AFL-CIO didn’t endorse anyone, making this a wash. Quinn already has the endorsement of the Service Employees Union, which is the largest in the state. Quinn’s track record is better than Hynes’ in this case. He’ll be fine.
Comment by LakeviewLady Tuesday, Dec 8, 09 @ 6:31 pm
Oh, Irish Eyes. Do you remember our little back and forth about UFCW 1546 endorsing Hynes? That endorsement was announced last Thursday (along with 2-3 others). Then the IFT (read: $$$, vols & votes) announces its support for Hynes. And now Quinn can’t even muster a simple majority of support among the unions? Good showing, there. This just goes to show how thin Quinn’s support is among labor (and the general public). They never wanted him as governor, but some must feel that ‘he’s behind the wheel (for the next 13 months), so we might as well hitch a ride’. Every day he’s in office he loses more support. Uncle Mo just stopped by the Hynes house for the holidays and word is he’s staying until February.
Comment by Rubbernecker Tuesday, Dec 8, 09 @ 7:00 pm
Quinn + labor = board appointments/reappointments
follow the names of the labor leaders supporting Quinn (that includes family members)
Comment by Ty Webb Tuesday, Dec 8, 09 @ 10:28 pm
@ Rich Miller
I apologize. Shouldn’t have used the term “Badgered.”. I stand by my comment that Hynes likes to buy Carrigan lunch though.
Comment by Burrito Bandit Wednesday, Dec 9, 09 @ 9:59 am