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Rizzo is the man who became famous last month for the salary he was pulling down as city manager of Bell, Calif. -- $787,000 a year. Who knew that running a city of 38,000 was so difficult?

Voter outrage forced Rizzo to tender his resignation. But the joke is on taxpayers. Rizzo can now collect a pension of $650,000 a year. By the time he turns 65, his pension will rise to more than $1 million annually.

Fortunately, government salaries this lavish are the exception, not the rule. But despite what John Berry, the government's personnel chief, said in a recent statement, government employees do make more on average than comparable private-sector workers.

Federal workers perform more skilled work than most private-sector employers, so they naturally earn higher wages. The unions representing federal employees insist that their higher skills explain federal employees' higher pay.

But they do not. Even accounting for skills and education, federal employees earn substantially higher wages -- an average of 22 percent higher -- than they would in the private sector. And that's just cash earnings.

The federal government offers gold-plated benefits, too. The Federal Employees Health Benefits Program offers excellent coverage without age, health or pre-existing-condition requirements. Federal employees also get a government pension and can retire as young as 56 with full benefits.

Federal employees get fantastic leave benefits. After three years on the job they get four weeks' vacation a year, all 10 federal holidays and 13 sick days -- all paid.

If you include the value of these benefits, the average federal employee's total compensation rises to 30 percent to 40 percent above comparable private-sector workers'.

Federal employees enjoy another perk: near absolute job security. Federal employees rarely lose their jobs for poor performance. Once they have put in a year on the job, it becomes almost impossible to fire a civil servant. Recessions do not put their jobs at risk either.

If the government reduced federal compensation to private-sector rates, it would save $47 billion next year -- more than $400 per income-tax filer. Congress plans to significantly raise taxes on dividends and savings at the end of the year, as well as the top tax rates paid on small-business income. These new taxes would discourage entrepreneurs from taking the risk of starting new ventures and investors from taking the risk of funding them. Thus tax increases mean fewer jobs.

Reducing federal pay to private-sector rates would allow Congress to keep taxes lower and the economy stronger. Congress should completely reform how the government pays its employees.

Uncle Sam should move to performance-based pay based on market rates -- the same system most private employers use. The government should also bring federal benefits in line with the private sector and allow managers to fire poor performers.

These reforms are common sense. Federal employees shouldn't get more than those whose taxes fund their salaries, especially when those taxes discourage businesses from hiring. The government shouldn't put federal workers' premium pay above jobs for the unemployed.

James Sherk is a senior policy analyst in labor economics at The Heritage Foundation (heritage.org).

The Pittsburgh Tribune-Review

The requester, Drew Devitt, applied for the earmark in March for his nonprofit Thomas Paine Foundation, to develop a type of wind turbine that could be located miles offshore. A month later, he asked Sestak, D-Delaware County, to write a letter to the Department of Energy supporting the same project. This time, the letter identified Devitt's for-profit company, New Way Energy, as well as his nonprofit.

"On April 12, I signed and sent the letter forward," along with about 4,500 similar letters he signed that month, Sestak said. "In that, I made an error: that I failed to put two and two together."

The campaign of his Republican rival for Pennsylvania's Senate race, former Lehigh Valley Rep. Pat Toomey, accused Sestak of lying and trying "to funnel hundreds of thousands of taxpayer dollars" to a nonprofit with no experience in alternative energy research.

"Many questions remain about which story is the real one," Toomey's spokeswoman, Nachama Soloveichik, said.

The House Appropriations Committee rejected the earmark request. Even if the foundation had received the money, House rules allow nonprofits that get earmarks to pay for-profit companies as subcontractors for projects they're funding, Sestak said. Still, he said, he wouldn't have supported Devitt's earmark request if he knew it would go to a for-profit.

"Even in my first year (in Congress), when it wasn't a requirement, I posted every earmark I got, every appropriation I got and the names of those who got them," Sestak said. Toomey "has yet to reveal his earmarks -- millions of dollars of them. ... I challenge him to reveal all his earmarks."

Soloveichik said Toomey secured earmarks for for-profit companies during his first year in Congress, but said that wasn't against the rules when Toomey served from 1999 to 2005. She named three -- one for Naval defense research at Lehigh University, a defense-related earmark for Air Products Corp., and another to Bethlehem Steel Corp. to turn its shuttered plant into a rail terminal -- but could not provide dollar amounts for any of them.

There could be others, she said. Congress allowed members then to submit earmarks anonymously, so there's no way to search for them by a member's name, as there is now.

Devitt issued a statement saying he was up-front with Sestak's staff when he made the request.

"I am an inventor, writer, entrepreneur, and employer of people who actually make things," Devitt said. "I believe that the U.S. government has unwisely spent its funds on the purchase of foreign wind turbines that have not been placed in zones that would be the most effective at generating energy. My efforts have been to promote what I believe is a better plan for wind energy."

"(eyeshadow)The Pittsburgh Tribune-Review':http://www.pittsburghlive.com/x/pittsburghtrib/news/regional/s_697767.html

The department's Office of Professional Responsibility is investigating whether supervisors at prisons abused leave time, officials said this week.

Rep. Tom Creighton, a Lancaster Republican, said internal investigations don't carry the same credibility as those outside groups conduct. The committee on which Creighton serves oversees corrections issues.

Gov. Ed Rendell, who oversees the Corrections Department, should decide which outside agency to use, Creighton said.

"As we get a better idea of the facts of the case, that's a decision that can be made down the road, one way or the other," said Rendell spokesman Gary Tuma. "The first step would be an internal investigation. If it warrants it, we would take it to the next level. We'll make sure it is a thorough investigation."

The investigation comes to light amid exploding costs for taxpayers to house more than 51,000 inmates. The department with 16,000 employees oversees 26 state correctional institutions, a motivational boot camp and 14 community centers.

The department's budget quintupled during the past 20 years, increasing three times faster than the state's inmate population, state records show. In the 1990-91 budget year, the department cost about $371 million to run, or $16,636 per inmate. This year, the General Assembly budgeted almost $1.9 billion, or $36,404 per inmate.

The largest increases occurred during the 1990s, when annual increases as high as 23.7 percent tripled the budget in 10 years. As most state departments faced freezes, cuts and program eliminations during the past two years, the prison budget jumped 11 percent in fiscal year 2009-2010 and 4.6 percent this year. Inmate populations increased 2.7 percent and 1.3 percent during those same years.

Susan McNaughton, a spokeswoman for the department, said 11 prisons opened since 1993.

The department is believed to be reviewing leave practices in at least three institutions: Woods Run in Pittsburgh and prisons in Mercer and Chester counties. To take a day off, rank-and-file corrections officers fill out a form to seek approval from a shift commander, who holds the rank of captain or higher.

"I'm absolutely shocked," said House Judiciary Chairman Tom Caltagirone, D-Reading. "They usually run a tight ship. This was really under the radar."

The Pittsburgh Tribune-Review

The Keystone Research Center's 15th annual check-up on the status of working Pennsylvanians examined the economic challenges residents faced over the past 12 months.

"The central message of our report is we need to be focused on the jobs deficit and the middle class wage deficit, and not the federal deficit," said Stephen Herzenberg, executive director of the non-profit economic research group in Harrisburg.

Before the federal government intervened to stabilize the economy through the American Recovery and Reinvestment Act, Pennsylvania was losing nearly 30,000 jobs per month and the number was growing rapidly.

This year, the center reported, Pennsylvania has gained jobs each month on average. Still, the state's economy remains in deep trouble.

Pennsylvania would need to add roughly 300,000 jobs to boost employment enough to replace the jobs lost since the recession began and to provide enough jobs to match the growing working age population, the report said.

The report pointed out that since 1995 productivity has grown by 43 percent while the inflation-adjusted hourly wages of both college-educated and high school-educated Pennsylvania workers has barely budged.

"The jobs deficit and wage deficit have created fertile ground for frustration with government as well as anti-tax sentiment," the report states. "Yet the wage deficit is greater than the amount most Pennsylvania families pay in state and local taxes."

Anything less than stellar employment growth over the next several years will be "an unmitigated disaster for hundreds of thousands of Pennsylvania families," the report said. "A further expansion of the jobs deficit could further dampen wage growth, possibly exacerbating inequality.

"Thousands of unemployed men and women with a decade, if not more, of gainful employment risk becoming permanently detached from the labor market as their skills atrophy over long spells of unemployment."

The Pittsburgh Post-Gazette

The newspaper filed a motion on March 30 seeking access to documents filed in Ms. Orie's case that had previously never been sealed.

However, at a hearing April 8, Judge Zottola denied the motion and retroactively sealed a number of documents.

The Post-Gazette appealed to the state Supreme Court, which two weeks ago remanded the case to Judge Zottola, saying the court must "conduct whatever proceedings it deems necessary" to decide if the newspaper has the right of access to documents, specifically since a grand jury presentment was returned against Ms. Orie on April 7.

Judge Zottola has not yet scheduled any hearings on the matter.

The Pittsburgh Post-Gazette

ADP Employer Services said private companies in the United States unexpectedly cut 10,000 workers in August. Economists surveyed by Bloomberg News had estimated a gain of 15,000 jobs during the month.

It was the first monthly fall in jobs, as calculated by ADP, this year. ADP, the nation's largest payroll-processing company, also said the gains it reported in July were revised downward 5,000, to 37,000.

Its assessment contrasted with the other report, which showed that the number of planned layoffs announced by U.S. firms in August fell 17 percent from July and 55 percent from August last year. Last month's layoff total came to 34,768, outplacement firm Challenger, Gray & Christmas Inc. said.

August marked the first month-to-month drop in layoffs since April, and it was the largest decline since June 2000, Challenger Gray said.

Wednesday's statistics come as employers and workers participating in the Pennsylvania Way to Work program gear up for a rally Thursday to push for an extension of the government-subsidized jobs program, which is set to end Sept. 30.

The American Recovery and Reinvestment Act included funds to pay employers to hire people, with the expectation they would make the positions permanent when funding ended. The program has created 240,000 jobs nationally.

In Pennsylvania, about 4,200 employers have used the program to fund 12,000 jobs, 2,700 in Philadelphia.

The rally is set for 11 a.m. at Progress Plaza on North Broad Street.

The Philadelphia Inquirer

Richard S. Fuld Jr. told the Financial Crisis Inquiry Commission at a hearing that Lehman did everything it could to limit its risks and save itself in the fall of 2008.

"Lehman's demise was caused by uncontrollable market forces, and the incorrect perception and accompanying rumors that Lehman did not have sufficient capital to support its investments," Fuld testified.

Fuld accepted responsiblity for mistakes made that saddled Lehman with some $60 billion in bad investments. But he said Lehman proposed measures to federal regulators that could have saved the firm, and "each of those requests was denied."

Other financial firms later received the government assistance that Lehman was denied, Fuld said.

Lehman was "mandated" by regulators to file for bankruptcy on Sept. 15, 2008 -- the only firm ordered to do so, he said.

"Lehman was forced into bankruptcy not because it neglected to act responsibly or seek solutions to the crisis, but because of a decision, based on flawed information, not to provide Lehman with the support given to each of its competitors," said Fuld.

But Thomas Baxter, general counsel of the New York Federal Reserve, insisted that the Fed lacked the legal authority to provide the temporary financing or other aid that Lehman sought. Hundreds of billions worth of collateral assets would have been needed to secure aid of that magnitude.

"Lehman didn't have it," Baxter told the panel.

Panel chairman Phil Angelides said there appeared to be "a conscious policy decision" by the Fed not to rescue Lehman.

Lehman's bankruptcy was the biggest in U.S. history and triggered a panic in financial markets.

Fuld repeated that Lehman had reduced its risks and held adequate capital. But it fell victim to a classic run on the bank.

After the subprime mortgage bubble burst in 2007, complex investments called credit default swaps -- which insured against default of securities tied to the mortgages -- collapsed. That brought the downfall of Lehman.

U.S. government officials declined to rescue Lehman. Instead, they injected tens of billions of dollars into other financial firms.

One such firm was Wachovia, which had a huge amount of business in adjustable-rate mortgages, enticing borrowers who later defaulted on their home loans. In late September 2008, the FDIC, the Federal Reserve and the Treasury Department found that Wachovia posed a "systemic risk to the financial industry and the economy," FDIC official John Corston says in his testimony.

Aided and prodded by the government, Wells Fargo acquired the Charlotte, N.C.-based bank. The $12.7 billion deal, announced in early October 2008, created an institution with operations in 39 states and the District of Columbia.

The Pittsburgh Tribune-Review

The Office of Professional Responsibility's investigation is believed to be focusing on at least three institutions: Woods Run in Pittsburgh and prisons in Mercer and Chester counties.

"There is an ongoing investigation," spokeswoman Susan Bensinger said. "... We are not able to provide any further details."

Authorities take seriously matters such as these, Bensinger said. If "anything of a criminal nature is found," investigators would give the information to the appropriate law enforcement agencies, she said.

Roy Pinto, president of the Pennsylvania State Correction Officers Association, said he didn't know about the investigation but said the allegations are serious.

"That's fraud. No matter what rank they hold, that's fraud against the commonwealth, and it shouldn't be tolerated," Pinto said.

The union wouldn't get involved until after an investigation concluded, Pinto said.

David La Torre, spokesman for the association, said the union represents sergeants and those ranked below them, but not lieutenants. Sergeants are considered supervisors, but they cannot approve time off.

To take a day off, rank-and-file corrections officers fill out a form to seek approval from a shift commander, who holds the rank of captain or higher. If someone took days off without logging them, high-ranking officers might have been involved, Pinto said. The department's process is strict, he said.

Union members get annual raises because of their contract. Higher-ranking officers haven't received a pay raise in "quite some time," Pinto said, estimating five or six years. The officers recently lobbied for legislation that would provide annual cost-of-living increases to nonunion employees.

Corrections spokeswoman Susan McNaughton said, based on a 40-hour work week, lieutenants make $42,876 to $72,127; captains, $49,844 to $83,623; and majors, $57,752 to $96,997.

The Pittsburgh Tribune-Review

Mr. Onorato told reporters here Wednesday that the Legislature should enact a severance tax on natural gas to pay for damage to state roads and bridges caused by heavy trucks and other equipment used by gas drillers and to restore the 28 percent budget cut that the state Environmental Protection Department has suffered in the last two years.

Mr. Onorato, Allegheny County executive, also wants to use the shale gas tax revenue to replenish the state's Growing Greener program, which preserves farms and undeveloped land and restores old industrial sites called brownfields.

Mr. Onorato noted that Mr. Corbett, the state attorney general, has said he opposes any new tax or tax increase. This means, Mr. Onorato said, that state and municipal governments will have to take money from their budgets to pay for the damage caused by drilling companies and to protect greenfields.

"Tom Corbett wants taxpayers to foot the bill for protecting the environment, while I want the drillers to pay for it," Mr. Onorato said. "He has made clear that his single goal is to prevent the oil and gas companies that are making hundreds of millions of dollars a year drilling in Pennsylvania from paying their fair share."

However, Mr. Onorato did pledge opposition to increases in the state sales tax, personal income tax and gasoline tax.

Mr. Onorato refused to divulge two key details about a Marcellus Shale severance tax -- the tax rate on the gas that's pumped out from deep underground and how much money he wants the tax to generate.

Gov. Ed Rendell has talked of putting a 5 percent tax on the value of the extracted gas, plus a levy of 4.7 cents per thousand cubic feet of gas, to generate about $100 million a year.

Other officials favor a tax only on the volume of gas produced, but at a rate high enough to produce about $200 million a year.

Mr. Rendell has called on the Legislature to enact a severance tax by Oct. 1, one that will produce $70 million this fiscal year and help close a $282 million budget hole. Mr. Onorato said he wouldn't use the severance tax money to balance the state budget.

He claimed Mr. Corbett's opposition to a shale gas tax may be rooted in the large financial support he's gotten from the industry since 2001. Mr. Onorato said that a citizens lobby called Common Cause disclosed in May that Mr. Corbett received $361,000 from energy companies while Mr. Onorato got $59,000.

Mr. Onorato's call for a shale tax is a change from what he said at a Democratic gubernatorial candidates' meeting in January, when he was undecided about the levy.

Corbett spokesman Kevin Harley said Mr. Onorato has changed his mind about the shale tax because of the views of "his mentor, Ed Rendell."

"Tom Corbett is opposed to raising new taxes. Lowering taxes increases job growth and expands the economy," Mr. Harley said.

The Pittsburgh Post Gazette