Firm Hired to Overhaul California's State Government Payroll in 'Over its Head' and 'May Be Unable to Reach its Goal'

It's utterly asthounding, the amount of money burned up by the endlessly voracious bureaucratic entitlement state. But California keeps throwing up example after example. One of these days it's going to be a bunch of road warriors out here. We're just counting down to the fiscal apocalypse.

At the Los Angeles Times, "Overhaul of California government payroll system at risk of collapse":

SACRAMENTO — One of the state's biggest technology endeavors, a $371-million overhaul of the government payroll system, is beset with problems and "in danger of collapsing," according to the state controller's office.

The company hired for the project is in over its head and may be unable to deliver on its promise to update a payroll system so old that even simple salary adjustments can tie it in knots, the controller's chief administrative officer said in a letter.

The state has spent at least $254 million so far on contractors, staff salaries, software and more for the system upgrade, which is five years overdue and has nearly tripled in cost since lawmakers authorized it in 2005.

"The project … is foundering and is in danger of collapsing," administrator Jim Lombard wrote to the contractor, SAP Public Services, in October. Lombard said the new system is not capable of processing "any portion of the state payroll population, let alone the full population of approximately 240,000 employees."

An SAP spokesman, Andy Kendzie, said the company is meeting its contractual obligations.

"Considering the project's complexity, and the many requirements involved in payroll processing, there have been some challenges," Kendzie said in a statement. "Despite these, SAP remains committed to the overall success of the project."

Technology quagmires have become a hallmark of California state government, with delays and cost overruns common...

Do tell.

Go finish reading at that top link.

Not to worry about yesterday's failed Mayan apocalypse prophecy. The ethnic wizards of our once-Golden State will be sure to see that puppy through!

Obama's Fiscal Cliff: It's Nothing But a Power Play

From Charles Krauthammer, at the Washington Post":

Let’s understand President Obama’s strategy in the “fiscal cliff” negotiations. It has nothing to do with economics or real fiscal reform. This is entirely about politics. It’s Phase 2 of the 2012 campaign. The election returned him to office. The fiscal cliff negotiations are designed to break the Republican opposition and grant him political supremacy, something he thinks he earned with his landslide 2.8-point victory margin on Election Day.

This is why he sent Treasury Secretary Tim Geithner to the Republicans to convey not a negotiating offer but a demand for unconditional surrender. House Speaker John Boehner had made a peace offering of $800 billion in new revenue. Geithner pocketed Boehner’s $800 billion, doubled it to $1.6 trillion, offered risible cuts that in 2013 would actually be exceeded by new stimulus spending and then demanded that Congress turn over to the president all power over the debt ceiling.

Boehner was stunned. Mitch McConnell laughed out loud. In nobler days, they’d have offered Geithner a pistol and an early-morning appointment at Weehawken. Alas, Boehner gave again, coming back a week later with spending-cut suggestions — as demanded by Geithner — only to have them dismissed with a wave of the hand.

What’s going on here? Having taken Boehner’s sword, and then his shirt, Obama sent Geithner to demand Boehner’s trousers. Perhaps this is what Obama means by a balanced approach.

More at that top link.

Social Security Will Boost Debt by 18 Percent of GDP in Just Twenty Years

At IBD, "Social Security to Up Debt By 18% of GDP In 20 Years":

Since 2007, Social Security has gone from running an $81 billion annual cash surplus to an estimated $58 billion deficit.

Yet despite that $139 billion swing toward red ink, Democrats insist that Social Security hasn't added a penny to the deficit and, therefore, should be off the table in fiscal cliff negotiations.

In reality, Social Security's deteriorating finances explain 15% of the $900 billion-plus increase in the overall budget deficit over the past five years.

Even more striking, Social Security's cash deficit will balloon to $155 billion by 2022, the Congressional Budget Office projects. That rise amounts to more than one-third of the overall deficit increase over the coming decade if current tax and spending policies stay in place.

IOU Accounting

So how can liberals argue that Social Security doesn't cause deficits? The $2.7 trillion Social Security trust fund doesn't hold any resources to help the government afford benefits. Instead, it represents a Treasury promise to cover any cash shortfall until the trust fund's special bonds, really government IOUs, are all spent.

That makes the retirement program's cash shortfall a problem for Treasury, but not Social Security itself, liberals can argue.

Yet either way, the impact on the government's bottom line is the same.

On its current path, Social Security's cash shortfall would raise public debt by 18% of GDP through 2032 — just before the trust fund is exhausted — an IBD analysis based on the 2012 Social Security Trustees report finds.

In 20 years, if Social Security is left unreformed, its cash deficit will hit 1.4% of GDP. On top of that, the extra interest due on the debt incurred by redeeming all of Social Security's trust fund bonds would amount to another 1% of GDP.

Bottom line: Social Security alone would increase the deficit by 2.4% of GDP, making it too big to ignore.

Because health care is by far the biggest driver of long-term budget deficits, there's no reason to think that the non-Social Security part of the budget will have money to spare to cover such a big Social Security deficit.

There also are important reasons to reform Social Security beyond fiscal prudence. When President Clinton put Social Security at the top of his agenda in 1998, he told Congress that reform wasn't just about saving money but also providing more support to lift low lifetime earners and elderly widows out of poverty. Such efforts have been stymied by political stalemate.

How about adults at the halfway point of their careers who face the prospect of retiring after the Social Security trust fund is depleted?

An IBD analysis finds that an average earner (about $43,000 a year) with 20 years left until retirement would have to set aside more than 5% of wages each year to make up for a nearly 25% automatic benefit cut under current law. That assumes Treasury returns and a lifetime annuity.

The government should let these workers know if they need to do more saving before it's too late.

RTWT.

When Work is Punished

From Tyler Durden, "The Tragedy of America's Welfare State."

Exactly two years ago, some of the more politically biased progressive media outlets (who are quite adept at creating and taking down their own strawmen arguments, if not quite as adept at using an abacus, let alone a calculator) took offense at our article "In Entitlement America, The Head Of A Household Of Four Making Minimum Wage Has More Disposable Income Than A Family Making $60,000 A Year." In it we merely explained what has become the painful reality in America: for increasingly more it is now more lucrative - in the form of actual disposable income - to sit, do nothing, and collect various welfare entitlements, than to work. This is graphically, and very painfully confirmed, in the below chart from Gary Alexander, Secretary of Public Welfare, Commonwealth of Pennsylvania (a state best known for its broke capital Harrisburg). As quantitied, and explained by Alexander, "the single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045."

And Check Instapundit as well from some video, "It’s as if there’s some kind of Dependency Agenda at work here."