The Debt Ceiling Debate: Lower the Heat, Pay the Bill, Deal with the Deficit
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Attorney and Scarsdale resident David M. Brodsky is part of the No Labels organization which is seeking to conduct and encourage rational dialogue, not extremist labeling, about important issues in our country, including dealing with the deficit and debt. One of the founders and leaders of No Labels is former U.S. Comptroller General David Walker who wrote the column below that originally appeared in The Connecticut Post on Sunday April 24th, is reprinted here on Brodsky’s request with Walker’s permission.
Now that the level of federal funding for the 2011 fiscal year has been resolved, there has been an increasing amount of attention on Congress’ upcoming vote to increase the federal debt ceiling limit. The debt ceiling is the legal limit that is set, and periodically re-set, on how much public and intra-governmental (e.g. Social Security and Medicare) debt the U.S. government can incur. It is critically important for Americans to understand the facts behind this debate in order to ensure a sensible solution.
While federal law provides for the continuation of essential government operations even if the government has not decided on a budget or funding levels for a fiscal year, such a provision does not exist in connection with the debt ceiling limit. Therefore, if the federal government hits the debt ceiling limit during a time of large deficits, which is the case today, dramatic and draconian actions will have to be taken in order to ensure that additional debt is not incurred. This would likely include a suspension of payments to government contractors, delays in tax refunds, and massive furloughs of government employees. In addition, since the Social Security program is now paying out more than it takes in, it could even mean delaying payment of Social Security benefits to tens of millions of Americans.
In essence, raising the debt ceiling is simply recognizing the federal government’s past fiscally irresponsible practices. But while failure to raise the debt ceiling is not a viable option given our current fiscal state, we must take concrete steps to address the government’s lack of fiscal responsibility. We must also do so in a manner that avoids triggering a massive disruption and a possible loss of confidence by investors in the ability of the federal government to manage its own finances. Such a loss of confidence could spur a dramatic rise in interest rates that would further increase our nation's fiscal, economic, unemployment and other challenges.
The recent decision by S&P to downgrade the long-term outlook on U.S .debt is just another market signal that elected officials must begin to work together to put our federal finances in order before the markets force it to. Other recent signals have included the reduced appetite of foreign investors for longer-term U.S. debt and PIMCO's decision to divest its U.S. debt holdings. In fact, the only player with any real appetite for longer-term U.S. debt in recent months has been the Federal Reserve – and such involvement on their part essentially amounts to government self-dealing. Such self-dealing serves to help the economy in the short-term while increasing longer-term risks and potentially delaying needed fiscal reforms.
In order to begin to restore fiscal sanity, Congress should increase the debt ceiling limit in exchange for one or more specific steps designed to send a signal to the markets, and the American people, that a new day in federal finance is dawning. To be credible, any such action must go beyond short-term spending cuts for the 2012 fiscal year.
One possible step could include agreeing on a set of statutory budget controls that would come into effect in fiscal 2013. Such controls should include specific annual debt/GDP targets with automatic spending cuts and temporary revenue increases in the event the annual target is not met. In my view, a ratio of three parts spending cuts, excluding interest savings, to one part revenue would make sense.
This debt/GDP target concept, which I have been advocating both publicly and privately in recent months, gained additional momentum last week when President Obama endorsed it in his April 13 fiscal speech. It also seems to be gaining some momentum in Congress. It just may be a nonpartisan approach that can gain bipartisan support in order to help ensure that our elected officials do not play "chicken" with the nation's debt ceiling limit as they did in resolving federal funding levels for fiscal 2011. After all, playing "chicken" with the debt ceiling would be like playing with a tactical nuclear weapon. If it explodes, it would come with a huge amount of collateral damage, including harming U.S. credibility.
As we all know, both political parties bear some responsibility for our current fiscal state. As a result, Congressional leaders from both political parties and the President should work together to do what is right for America. In doing so, they should refrain from inflammatory partisan and personal attacks that could taint the water for a political compromise.
Hopefully, Congress and the President will agree on an appropriate basis for extending the debt ceiling limit before we approach the 11th hour. How they resolve this issue will likely be the most important fiscal decision they make before the 2012 elections. For the sake of our future and our families, let us hope that they choose prudence over politics.
By: Hononorable David M. Walker, No Labels Co-Founder and former U.S. Comptroller General of the United States (1998-2008)
Calling Teen Writers
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The Scarsdale Public Library's Teen Advisory Board is proud to announce a Teen Writers' Conference expressly for middle and high school students in Westchester County. It's not too late to sign up for this free event- the registration deadline has been extended to Friday, April 29! Now, older students will have the chance to attend workshops with professional writers and share some of their own work – as younger students do at the Young Writers' Workshop. Each professional writer will discuss his genre and work before leading an activity to challenge the young writers and help them to improve. Workshops include taste testing, humor writing, sports writing, and journalism, to name a few. Students will take two 1-hour workshops followed by a half-hour reception at the end during which interested students will be able to speak one-on-one with the writers.
The Teen Writers' Conference will be held on Friday, May 13 from 5:00-7:30 pm at Scarsdale High School. Writers will include Todd Strasser, Alice Coleman, Sheela Chari, Marilyn Johnson, Carrie Gilpin, Barbara Josselsohn, Henry Fountain, Todd Sliss, Brian Brown, and Michael Cain, all experts in their fields of writing. In high school and middle school, large amounts of writing are required from teens, both for school and extracurricular activities. The informal setting of the workshops will allow teen writers to improve without the stress of having to hand an assignment in on time. Whether you are interested in journalism or novel writing, the Teen Writers' Conference is a great opportunity if you love to write or just want to improve!
Students can pick up and drop off a registration form at the front desk of the Scarsdale Middle School library, Scarsdale High School library, or Scarsdale Public Library. They may also read through the program guide here and email [email protected] with their four workshop choices along with their name, grade, email, and phone number.
Please email [email protected] for more information about the event or joining the Teen Advisory Board.
Thinking of Selling Your Home...Read this First
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Although Scarsdale’s real estate market has held up much better than most, it is still a tough time to sell a house. Recently, the Building Department in Scarsdale, with little if any public discussion, instituted a policy change which will make the process of selling a home much more difficult and costly for many residents. The change relates to how a seller of an older home complies with its obligation to deliver a certificate of occupancy for the property or other evidence that such a certificate is not required.
The typical contract of sale to sell a home makes it a condition of the buyer’s obligation to close that the seller deliver a certificate of occupancy (or certificate of compliance) or evidence that none were required covering the building and all other buildings on the property authorizing their use as a single family residence.
Many homes in Scarsdale were constructed prior to the date in 1923 that the Village required the issuance of certificates of occupancy for all new construction. In the past, the owner complied with its obligation by obtaining a letter from the Village, commonly referred to as a Pre-Date Letter, in which the Village stated that according to Village records the house was constructed prior to the date that certificates of occupancy were issued. The process was quite simple; a request was made, a nominal fee paid, and the Village issued the letter.
Purchasers, their lenders, and their respective attorneys universally accepted the Pre-Date Letters without questioning whether certificates of occupancy or compliance should have been issued for subsequent renovations made to the Premises. The vast majority of homes in Scarsdale built prior to the issuance of certificates of occupancy have been renovated since the original construction. Unfortunately many of these renovations were performed without obtaining the required permits and certificates of occupancy for the work. A Pre-Date letter was never intended to be a certification by the Village that the renovations were performed in accordance with law.
As a result of this misunderstanding, the Village has adopted a new policy with respect to the issuance of Pre-Date letters. Under this policy, the Building Department will inspect the house following a request for a Pre-Date Letter. . If the inspector determines that renovations were made without proper permits, the homeowner is required to “legalize” the renovation -- that is to file plans, obtain a permit and certificate of occupancy for the renovation.
This is a very costly proposition, particularly when it relates to the legalization of finished basements and attics. In many cases these renovations were performed years ago by prior owners, and requiring compliance with current code is expensive. In some cases, the current owners purchased the house relying on the Pre-Date letter, and are now being told that they must spend thousands of dollars to obtain certificates of occupancy for renovations made before their ownership.
This often arises in the course of selling the house when there are significant time constraints. In once case, an owner who had purchased a house in 1993, relying on a Pre-Date letter, could not obtain a new Pre Date letter without legalizing a finished basement and mud room enclosure, both of which existed when they purchased the home. Legalizing the finished basement required obtaining a ceiling height variance from the State (a process that takes up to 4 months) and the total cost of bringing the renovations up to code exceeded $40,000.
This drastic change in Village policy seemed to have occurred without any public hearing and, in fact, without any written notification of the new policy. Only after several local real estate agents and attorneys raised this issue did the Village publish the new policy in November 2010. The policy is now available on the Village website under Hot Topics.
As of this date, however, it is unclear how the new procedure will be enforced. For instance, would it be fair to require a homeowner to “legalize” an attic that was clearly renovated many years ago by complying with current building code that requires the installation of a fire suppression system? Generally, decisions as to what must be done to legalize an existing renovation have been left to the discretion of the Building Department Inspector.
I suggest that anyone thinking about selling an older home that was built prior to the issuance of certificates of occupancy contact the Village Building Department prior to putting the home on the market to determine exactly what will be required to obtain a new Pre-Date Letter.
Keith E. Schutzman has been practicing real estate law for over 25 years. The majority of his practice is residential transactions in Scarsdale and vicinity. He lives and works in Scarsdale, and has been a resident of Greenacres for 18 years with his wife and their three boys who attend the Scarsdale public schools. Mr. Schutzman has been active in community affairs and coaching for many years. His comments about residential real estate have been sought out and quoted in major publications, including the New York Times and Money Magazine. Contact him at 914-713-0001 or by email at: [email protected]
A Month of Special Evenings in Edgemont
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April is always an exciting time at Edgemont schools. Both elementary schools open their doors for their traditional open house evenings and parents are invited to visit their children's classrooms, browse books in the library, check out the hallway displays and catch a glimpse of life inside the Edgemont elementary schools. The Open Houses always prove to be great, though crowded evenings.
Greenville's Open House evening was held on Thursday, April 7th and this Thursday it will be Seely's turn to open its doors. Families can see what projects their child's class is currently working on. They can also visit the classrooms of their child's upcoming grade next year to catch a preview of what is to come. Many of the teachers also attend the open houses and happily show off student folders to the parents. In addition to visiting the classrooms, parents can hear the jazz band perform in the gym while looking at a school-wide art fair featuring artwork from every single classroom. The Greenville 5th and 6th grade commercials project were shown in the school's music room this year. In the past there has also been a "speed stacking cup" contest moderated by the PE teachers. Some grades use the night for meetings to discuss events such as the upcoming 4th Colonial Fair or the 5th grade Washington DC trip.
On Wednesday, April 13th, the junior/senior high school hosts its third annual Teacher Idol Event which uncovers the hidden talents of a very gifted staff. It is a fun-filled evening when the teachers, and even the administrators, take to the Edgemont stage and perform for the student judges. The event, sponsored by the high school's student government, always fills the auditorium to capacity. What teen would not want to see math teachers take the stage or hear the assistant principals sing a duet? All proceeds from the evening are donated to the Nancy Rose Tannenbaum Scholarship Fund. Last year some popular performances included "Me and Julio Down by the Schoolyard" by the teachers in the Social Studies department and "Already Gone" by the teacher's band called 9th Period.
Finally on the evening of April 6th families of incoming kindergarteners were invited to the annual kindergarten orientation. The evening provided a great opportunity for the incoming families to meet the kindergarten teachers at both schools as well as the principals and learn a little about what they can expect next year. Families heard all about the extended day program and the academic philosophy of the teachers, as well as the rotating snack schedule. Parents also had the opportunity to sign up for various PTA committees. If you have a child eligible for enrollment in kindergarten in September and have not yet registered him or her, please contact the school registrar at [email protected] for more information. All in all, a great month of special evenings in the Edgemont schools.
Caroline Tzelios is a "stay at home" mom of three kids who never stays at home. She has spent the past twelve years volunteering in the Edgemont Schools and recently completed her two year term as PTSA co-president of Edgemont High School and is the current co-chair of Edgemont's PISA Theater Committee.
Meet the Nominees
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The Scarsdale School Nominating Committee has selected residents Sunil Subbakrishna and Jonathan Lewis to run for the Scarsdale Board of Education.These men have backgrounds in technology and finance, both important issues facing the schools now and in the future.
We had a chance to catch up with both of them.
Born in Bangalore, India, Sunil Subbakrishna came to the States at age two when his father’s studies brought him to Chicago. He returned to India with his family at age six, only to come back to the U.S. when he was twelve when he settled settled in Evanston, Illinois with his family.
Sunil received a BA in Music from the Washington University in St. Louis as well as one in Electrical Engineering and Computer Science at the University of Illinois. He then went on to receive an MBA from the University of Chicago in Finance.
Moving to Scarsdale in 1994, just before his oldest started kindergarten, Sunil has a son who went through the Scarsdale schools and is about to graduate Columbia University. He also has a daughter in the eighth grade. Education has always been a big part of his family’s life and that is why he wants to be on the board.
“Like a lot of people, the schools are why we moved here. It’s evident that this community values education. It’s more than just a tax check. It’s important that people are involved and care about the quality of the education and ensure the schools stay excellent.”
Sunil has his own management consulting firm. Before that he worked for several large financial companies including JP Morgan and UBS who placed him in Zurich. In these roles he combined his knowledge of technology and finance, something he plans to focus on as a member of the Board of Education.
As he explains,"I feel like we are at a point now where there is a lot of change in technology. It's a lot of what I consult on and how we can use it (technology) to best stay competitive. That change we are seeing is happening in our schools. It's not just technology involving teaching, but also using technology to include parents in the overall education system. In Scarsdale schools, as a parent, I think they have done a good job adapting and using new technology and are probably stronger than most schools. This is like- think of this - like an Ecosystem. We should make it so evèryone in the ecosystem that is our school can interact with one another."
And while he believes it’s not appropriate to comment on specific issues facing the district at the moment, he can speak broadly to the issues facing Scarsdale schools including class size, tax caps and the looming budget crisis. “These are all issues that will require trade offs. Smaller class sizes will require hiring more teachers and we will have to look at what that means in financial terms. The board will have to be one that is willing to listen and make tough decisions in terms of those trade offs and I think that will be indicative of what we will see on the board in the next few years. Going forward the board will have to find a balance between taxing people and providing quality services.”
For the past few years Subbakrishna has been on the Advisory Council on Technology for Scarsdale Village. On the Council, he helped to guide the Village Treasurer in obtaining a new accounting system program. His advice was key in the town's decision.
Jonathan Lewis was born in Greenwich Village in the late 1960s, but was raised in Great Neck, New York. His roots in school issues go way back. In his senior year of high school, he was a student delegate to the Great Neck Board of Education. Lewis earned a BA at the University of North Carolina at Chapel Hill where he focused on History and International Studies. He was recruited to play trumpet at Chapel Hill as well.
Upon graduation, Jonathan went on to earn an MBA in finance and management of organizations at Columbia University and an MA in history at New York University.
While getting his Masters in Foreign Policy, Jonathan was introduced to Richard Bissel a key figure in the conception and implementation of the Marshall Plan, as well as CIA Deputy Director for Presidents Eisenhower and Kennedy. The two developed a friendship and Jonathan co-authored his memoir, Spy Capitalism which was published by Yale University Press. Working closely with Bissel he says that he grew to understand what makes for good and bad policy decisions. Lewis says that his academic work in this area and knowledge of policy will help him on the board.
He and his wife moved to Scarsdale in large part due to the reputation of the schools, and he has been impressed with the quality of the education. He says that as a potential board member, maintaining this level of excellence will be a challenge in light of the economy.
“My daughter, Hannah, is in the fifth grade at Edgewood Elementary School and my son Steven, is in the ninth grade at the high school. Edgewood has been a great place for both of my children. The school has a warm, community spirit and there are many avenues for children to get involved in sports, explore new ideas and express themselves through the arts. I’ve been very impressed with the careful way the school district prepares families and students for the transitions from elementary school to middle school and then on to high school. Steven had a great experience in the middle school and was well prepared for the start of high school this year.
The quality of the teaching is excellent, and the district remains a thought leader in considering new ways to approach education. The ever-present challenge, which all districts face, will be maintaining this level of excellence in an era of diminished prosperity. Our challenge will be to preserve the qualities and programs that are at the heart of a Scarsdale education while being mindful of the economic challenges we all face as taxpayers.”
Lewis co-founded Samson Capital Advisors seven years ago, where he currently is a member of the executive committee and the chair of the investment committee. He compares building a business to some of the challenges faced by the board.
“When we began business in 2004, we had no clients, and no employees. Today, we manage about $7 billion in conservative investment strategies for private clients, foundations, and not-for-profits and we have over 30 employees and working partners. Building a successful business, creating jobs, and serving clients well has been exciting. As a partner in a privately held company, I am particularly sensitive to the importance of managing our cost structure prudently so that we can build a healthy organization and deliver on the value proposition our clients expect. I would bring this knowledge of business and management to the school board to help insure our district maintains its reputation for prudent financial management during these difficult economic times.
Jonathan explains that education has always been an important part of his life as is community service.
“Through all of my volunteer activities, wherever I have lived, I have tried to do my part for my community. I believe my background as an entrepreneur and academic will help me make a positive contribution to our school district and community. I have a life-long commitment to education and education policy from being a student delegate to the Board of Education in Great Neck when I was growing up, to my work for Yale University Press, teaching at the Scarsdale Young Writers' Conference for many years, and my work with the Phi Beta Kappa foundation.”
Earlier this year, on behalf of Phi Beta Kappa he helped stage an event in Scarsdale that brought educators from Princeton, Columbia, and Yale to a meeting that also included Superintendent McGill and Jill Spieler. The discussion was about the value of the liberal arts and how school districts, universities and Phi Beta Kappa can work together to find a new ways to promote and protect the liberal arts at the high school and college level.
And since, running a business, writing books, and doing community service isn’t enough, Jonathan Lewis has found some time to exercise. When asked to tell us something people would be surprised to learn about him he said:
“For the past five years I have done one to two sprint triathlons a year. Sprint triathlons are short distance events: a half a mile swim in the Long Island Sound, cycling six to tweleve miles, running a few miles. For anyone who has seen me jog in the neighborhood, they can be pretty sure “sprint” is a misnomer in my case. I have a fun time participating, love the swim in the open water, and just like to finish. Knowing that I have an event or two over the summer motivates me to exercise, particularly so I can have a decent finish with my family waiting at the end of the race!"
Jen is a freelance journalist who has covered the economy and markets for over a decade at a major financial news outlet. She lives in Scarsdale with her husband and 2 children. Jen has yet to bake a successful batch of cookies.
