Senator Maria Cantwell has declared that she “will do everything I can to strengthen and protect the Social Security program.”
The Washington Democrat made this commitment October 4 in a letter to Social Security Works Washington and to the Puget Sound Alliance for Retired Americans.
Without mentioning the deficit reduction commission by name, Cantwell said: “Changes to the Social Security program – how it is financed, how benefits are calculated, or decisions about retirement age – should be designed to preserve and strengthen the financial integrity of the program, and should not be a part of the deficit reduction decisions.”
Cantwell expressly hailed “the efforts of Social Security Works Washington and the Puget Sound Alliance for Retired Americans” for their efforts “to protect and strengthen Social Security for current and future generations.”
The Senator’s letter was in response to a request from Social Security Works Washington and PSARA that she join Senator Patty Murray, Representative Jim McDermott, and Eighth District Congressional candidate Suzan delBene in a firm pledge to reject any changes in Social Security that would emasculate the program in the name of tackling the federal budget deficit.
“Social Security is a promise to American workers and their dependents, and changing the rules in the middle of the game by eroding benefits or delaying the retirement age undermines that promise,” Senator Cantwell wrote.
Friday, November 5, 2010
Means testing: Here’s what’s wrong with it
By Nancy Amidei and Will Parry
“Means testing” Social Security is a slick, seductive idea being promoted by Social Security’s enemies, supposedly to address the federal budget deficit. But like proposals to raise the Social Security retirement age, means testing has nothing to do with the deficit, and everything to do with emasculating Social Security.
So how would means testing apply to Social Security? It’s simple: Continue to require everybody to contribute to the Trust Fund from their paychecks, but abandon the established practice of paying benefits based on those contributions. Instead, pay benefits based on “need.” That is, reduce or eliminate benefits for those with incomes above a certain level.
Note that means testing, whatever its form and whatever its rationale, betrays two basic principles of Social Security: First, that benefits be universally available; and second, that a benefit be an earned right. Everyone who works and pays into the system is entitled to a benefit. It’s always worked that way.
That’s why the Puget Sound Alliance for Retired Americans and its partners in the Social Security Works/Washington coalition have explicitly rejected means testing: “Principle No. 3: Social Security is an insurance policy, and as such should not be means tested.”
In a survey of nearly 1,500 people last year, hefty majorities said they had no problem with having to pay Social Security taxes. Why the popular support? It’s the program’s universality. People know that that they will receive a monthly Social Security check when they become eligible.
It’s a well understood principle in Washington, DC, that “programs for poor people tend to become poor programs.” Consider a means tested program like TANF (Temporary Assistance to Needy Families). Only poor people qualify. Eligibility is strict. And the benefits are temporary and meager.
Grotesquely inadequate as it is, TANF is always on the chopping block when government budgets get tight. The wealthy and the powerful do not spring to the defense of TANF. Why should they? They’re means-tested totally out of the program.
In summary, to means test Social Security is to place it on the proverbial slippery slope, its funding without powerful champions, inevitably degenerating into a program no longer recognizable as Social Security, sooner or later to become simply an under-funded twin to TANF. The enemies of Social Security want the program to wither away and die. That’s why they churn out slick arguments for means testing.
(Nancy Amidei is a member of PSARA.)
“Means testing” Social Security is a slick, seductive idea being promoted by Social Security’s enemies, supposedly to address the federal budget deficit. But like proposals to raise the Social Security retirement age, means testing has nothing to do with the deficit, and everything to do with emasculating Social Security.
So how would means testing apply to Social Security? It’s simple: Continue to require everybody to contribute to the Trust Fund from their paychecks, but abandon the established practice of paying benefits based on those contributions. Instead, pay benefits based on “need.” That is, reduce or eliminate benefits for those with incomes above a certain level.
Note that means testing, whatever its form and whatever its rationale, betrays two basic principles of Social Security: First, that benefits be universally available; and second, that a benefit be an earned right. Everyone who works and pays into the system is entitled to a benefit. It’s always worked that way.
That’s why the Puget Sound Alliance for Retired Americans and its partners in the Social Security Works/Washington coalition have explicitly rejected means testing: “Principle No. 3: Social Security is an insurance policy, and as such should not be means tested.”
In a survey of nearly 1,500 people last year, hefty majorities said they had no problem with having to pay Social Security taxes. Why the popular support? It’s the program’s universality. People know that that they will receive a monthly Social Security check when they become eligible.
It’s a well understood principle in Washington, DC, that “programs for poor people tend to become poor programs.” Consider a means tested program like TANF (Temporary Assistance to Needy Families). Only poor people qualify. Eligibility is strict. And the benefits are temporary and meager.
Grotesquely inadequate as it is, TANF is always on the chopping block when government budgets get tight. The wealthy and the powerful do not spring to the defense of TANF. Why should they? They’re means-tested totally out of the program.
In summary, to means test Social Security is to place it on the proverbial slippery slope, its funding without powerful champions, inevitably degenerating into a program no longer recognizable as Social Security, sooner or later to become simply an under-funded twin to TANF. The enemies of Social Security want the program to wither away and die. That’s why they churn out slick arguments for means testing.
(Nancy Amidei is a member of PSARA.)
Jo Jacobson new staffer
Jo Jacobson, a retiree with more than 35 years in public education, has been hired by the Washington State Alliance for Retired Americans as their staff person for field mobilization.
Jacobson has taught every K‐12 grade and in community college. Her rich resume also includes work as a school counselor; a private therapeutic counseling service; and service as executive director of Pierce County Careers Connection.
“She is strongly committed to fight for issues that affect, not just retired Americans, but all Americans,” WASARA President Mike Warren said.
The Puget Sound ARA joins WASARA in warmly welcoming Jo Jacobson to the Alliance.
Jacobson has taught every K‐12 grade and in community college. Her rich resume also includes work as a school counselor; a private therapeutic counseling service; and service as executive director of Pierce County Careers Connection.
“She is strongly committed to fight for issues that affect, not just retired Americans, but all Americans,” WASARA President Mike Warren said.
The Puget Sound ARA joins WASARA in warmly welcoming Jo Jacobson to the Alliance.
Wal-Mart target of discrimination suit
By Rap Lewis
Nine years after it was filed, the largest employment discrimination suit in U.S. history, affecting more than one million women currently or formerly employed by Wal-Mart, is headed for the Supreme Court.
If the Supreme Court accepts the case, it will decide, not whether discrimination occurred, but whether the women can sue as a class, rather than being compelled to sue as individuals or in small groups. The company argues that employees charging discrimination should sue one at a time.
Brad Seligman, an attorney for the women, challenged Wal-Mart’s position.
“The ruling upholding the class in this case is well within the mainstream that courts at all levels have recognized for decades,” Seligman said.
“Only the size of the case is unusual, and that is a product of Wal-Mart’s size and the breadth of the discrimination we documented. There is no ‘too big to be liable’ exception in civil rights laws.”
In April, the federal Court of Appeals for the Ninth District in San Francisco ruled 6-5 that the suit could proceed as a class action. The company appealed. If the Supreme Court agrees with the appeals court majority, the case could provide judicial grounds for similar class actions in the future.
If the Supreme Court rejects Wal-Mart’s position, the case will revert for trial as a class action before U.S. District Judge Vaughn Walker.
If the pattern of discrimination is established in Judge Walker’s court, Wal-Mart could be confronted with $1 billion or more in damages, Steven Greenhouse reported in The New York Times. The women are seeking damages for every year since 1997.
The suit, Dukes v. Wal-Mart, gets its name from Betty Dukes, a spunky Wal-Mart greeter who experienced years of frustration on the job, culminating in an argument with managers that led to a humiliating demotion and a pay cut. In 2001, Dukes and six other women filed the class action suit that is now before the Supreme Court.
When the lawsuit was filed, Dukes was being paid $8.44 an hour, despite nine years of service. When she began being covered in the media, Wal-Mart raised her pay nearly 50% within a year.
Dukes’ lawsuit alleges that Wal-Mart has violated the 1964 Civil Rights Act, which made it illegal for employers to discriminate on the basis of race, creed or gender. It charges that the company systemically pays women less than their male counterparts and promotes men more rapidly than women.
Experts retained by the plaintiffs said they found such patterns of discrimination at all 46 Wal-Mart regions.
It was not the first time discrimination was an issue. As early as 1995, Wal-Mart itself hired a major law firm to explore its vulnerability to such a lawsuit. The law firm found wide gender disparities in pay and promotion at Wal-Mart and Sam’s Club stores and urged the company to take remedial measures.
The law firm’s findings were similar to those found years later by the plaintiffs’ main expert, Richard Drogin, an emeritus statistics professor at California State University, who examined payroll data from 1996 to 2002.
Drogin found that among hourly workers in 2001, women earned about $1,100 a year less than men. Among salaried workers, he found that women earned $14,500 less than men. He also found that in 2001, 65% of Wal-Mart’s workforce was female, compared with only 33% of its managers.
Nine years after it was filed, the largest employment discrimination suit in U.S. history, affecting more than one million women currently or formerly employed by Wal-Mart, is headed for the Supreme Court.
If the Supreme Court accepts the case, it will decide, not whether discrimination occurred, but whether the women can sue as a class, rather than being compelled to sue as individuals or in small groups. The company argues that employees charging discrimination should sue one at a time.
Brad Seligman, an attorney for the women, challenged Wal-Mart’s position.
“The ruling upholding the class in this case is well within the mainstream that courts at all levels have recognized for decades,” Seligman said.
“Only the size of the case is unusual, and that is a product of Wal-Mart’s size and the breadth of the discrimination we documented. There is no ‘too big to be liable’ exception in civil rights laws.”
In April, the federal Court of Appeals for the Ninth District in San Francisco ruled 6-5 that the suit could proceed as a class action. The company appealed. If the Supreme Court agrees with the appeals court majority, the case could provide judicial grounds for similar class actions in the future.
If the Supreme Court rejects Wal-Mart’s position, the case will revert for trial as a class action before U.S. District Judge Vaughn Walker.
If the pattern of discrimination is established in Judge Walker’s court, Wal-Mart could be confronted with $1 billion or more in damages, Steven Greenhouse reported in The New York Times. The women are seeking damages for every year since 1997.
The suit, Dukes v. Wal-Mart, gets its name from Betty Dukes, a spunky Wal-Mart greeter who experienced years of frustration on the job, culminating in an argument with managers that led to a humiliating demotion and a pay cut. In 2001, Dukes and six other women filed the class action suit that is now before the Supreme Court.
When the lawsuit was filed, Dukes was being paid $8.44 an hour, despite nine years of service. When she began being covered in the media, Wal-Mart raised her pay nearly 50% within a year.
Dukes’ lawsuit alleges that Wal-Mart has violated the 1964 Civil Rights Act, which made it illegal for employers to discriminate on the basis of race, creed or gender. It charges that the company systemically pays women less than their male counterparts and promotes men more rapidly than women.
Experts retained by the plaintiffs said they found such patterns of discrimination at all 46 Wal-Mart regions.
It was not the first time discrimination was an issue. As early as 1995, Wal-Mart itself hired a major law firm to explore its vulnerability to such a lawsuit. The law firm found wide gender disparities in pay and promotion at Wal-Mart and Sam’s Club stores and urged the company to take remedial measures.
The law firm’s findings were similar to those found years later by the plaintiffs’ main expert, Richard Drogin, an emeritus statistics professor at California State University, who examined payroll data from 1996 to 2002.
Drogin found that among hourly workers in 2001, women earned about $1,100 a year less than men. Among salaried workers, he found that women earned $14,500 less than men. He also found that in 2001, 65% of Wal-Mart’s workforce was female, compared with only 33% of its managers.
Poverty rising in state
New Census data indicate that poverty in Washington state has increased substantially during the recession, with an especially disturbing rise in poverty among children, and with catastrophic poverty rates in the African American, Native American and Latino communities.
The state’s overall poverty rate rose from 11.4% in 2007 to 12.3% in 2009. Among the state’s children, the poverty rate grew from 14.5% to 15.8%.
The Census also reported 2009 poverty rates of 24.8% among Latinos, 24.4% among Native Americans, and 24.3% among African Americans.
The median annual income in the state fell by nearly $1,000, and food stamp usage (now called the Supplemental Nutrition Assistance Program, or SNAP) rose by 51% between 2007 and 2009.
In the nation as a whole, 43.6 million people – one in every seven Americans – were in poverty in 2009, up from 39.8 million in 2007. It was the largest increase in nearly three decades. Everywhere, communities of color continue to be hit hardest.
Even with the mitigating effect of Social Security, poverty among older Americans is about 9%. The poverty rate among children in Washington State is now at 15.8%, 10% above the rate a year ago.
The state’s overall poverty rate rose from 11.4% in 2007 to 12.3% in 2009. Among the state’s children, the poverty rate grew from 14.5% to 15.8%.
The Census also reported 2009 poverty rates of 24.8% among Latinos, 24.4% among Native Americans, and 24.3% among African Americans.
The median annual income in the state fell by nearly $1,000, and food stamp usage (now called the Supplemental Nutrition Assistance Program, or SNAP) rose by 51% between 2007 and 2009.
In the nation as a whole, 43.6 million people – one in every seven Americans – were in poverty in 2009, up from 39.8 million in 2007. It was the largest increase in nearly three decades. Everywhere, communities of color continue to be hit hardest.
Even with the mitigating effect of Social Security, poverty among older Americans is about 9%. The poverty rate among children in Washington State is now at 15.8%, 10% above the rate a year ago.
Who has the right to foreclose?
Let’s review: a collapsed housing market and sustained high unemployment have left millions of homeowners falling behind on mortgage payments. Until early September, home foreclosures and seizures continued at a record pace. But who, if anyone, has the right to seize these homes? Based on the discovery of apparently flawed foreclosure documents and likely criminal industry procedures, the answer is very unclear.
Legal analysts see one gigantic problem: How do you foreclose on a home when you can’t figure out who owns it? Since the mid-1990s, original mortgages have been sliced and diced so many ways as part of a “derivatives” investment package that legal ownership is often unrecognizable.
As if that weren’t enough, many of those who sign off on foreclosures are so-called “robo-signers” tied to a computerized program that is often identified in proceedings as the owner of record. Roughly 65 million homes are potentially affected. Employees at some lender banks have also admitted to signing off with absolutely no review.
As the public learned all this, it also got wind of The Interstate Recognition of Notarizations Act, which would have forced state courts to ignore many of the most commonly cited flaws, potentially streamlining and accelerating the already record pace.
The Act, first passed by the House in April of this year, sat quietly in the Senate Judiciary Committee until the day before Congress recessed for its midterm-election break. On September 27, with little attention or public debate, the bill was unexpectedly brought to the Senate floor and passed. A little over a week later, President Obama broke with his own party's leadership and announced that he’d veto the legislation.
Then, in mid-October, fifty-one Attorneys-General (including D.C.) simultaneously launched investigations into allegations that flawed documents were used in hundreds of thousands of foreclosures. Critics found it hard to imagine manufacturing $14 trillion worth of mortgage-backed securities and other games of mathematical chance in five years without cutting a lot of corners.
Within days, major lenders announced actions ranging from a temporary nation-wide moratorium on foreclosures to promises to hire “outside” reviewers or to review for potential defects even though lenders “had discovered no problems.” By month’s end, Bank of America had reinsituted foreclosures in 23 states, amending its declaration of “not one case” of error to read “a tiny number,” generally “misspellings and omissions.”
Sadly, the White House warned of the “unintended consequences to a broader moratorium.” Treasury Secretary Geithner cited “too many people taking on debt they couldn’t handle,” plus “Don’t hurt the recovery!” and “the Wisdom of Markets Forces” as reasons to oppose an extended moratorium while neglecting to show how to detect and quantify people who were “foolishly overextended.” He also failed to note that “the recovery” is 25-30% fueled by sales of foreclosed properties, or that the Free Market allowed banks to launch this “runaway train.”
Some prominent economists believe Geithner’s reluctance to back a moratorium is based on the fact that the government owns or is backing trillions of dollars in assets that no one wants, predicated on the same or similar suspicious loans that defaulted during the last Bush years, when the White House did nothing to stop the wave or force banks to restructure.
If foreclosed homes couldn’t be sold because of fraudulent paperwork or had to wait for more detailed inspections, imagine how difficult selling assets stuffed with faulty loans might be.
If it’s tough to find a title for a foreclosed home, think how tough it is to extract the related loan from a pyramid of securities sitting on top of it.
If a foreclosed property isn’t selling, it’s not recovering any money back to any asset waiting for it. What that can do to the value of toxic assets living at the Fed and the Treasury Department is simple: kill it.
Geithner’s stance is a reminder that business as usual has resumed. Candidate Obama advocated a foreclosure moratorium, as did his opponent. So did newly sworn-in President Obama. That was when things were still bad for the banks and the markets. Then profits, bonuses and stock prices got stronger. So did the power of the TooBigToFails.
The response from the Right is even worse. The GOP is mum, but its media surrogates (esp. The Wall Street Journal editorial page) have dismissed the lack of proper documents as a triviality. Paul Krugman put it best: In effect, they’re saying that if a bank says it owns your house, we should just take its word. To me, this evokes the days when noblemen felt free to take whatever they wanted, knowing that peasants had no standing in the courts. But then, I suspect that some people regard those as the good old days.
In 2000, then-Treasury Secretary--and now soon-to-be-departed White House economic guru Lawrence Summers--declared that the keys to avoiding financial crisis were “well-capitalized and supervised banks, effective corporate governance and bankruptcy codes, and credible means of contract enforcement.”
Back to Professor Krugman: The accounting scandals at Enron and WorldCom dispelled the myth of effective corporate governance. The idea that our banks were well capitalized and supervised sounds like a sick joke. And now the mortgage mess is making nonsense of claims that we have effective contract enforcement — in fact, the question is whether our economy is governed by any kind of rule of law.
Legal analysts see one gigantic problem: How do you foreclose on a home when you can’t figure out who owns it? Since the mid-1990s, original mortgages have been sliced and diced so many ways as part of a “derivatives” investment package that legal ownership is often unrecognizable.
As if that weren’t enough, many of those who sign off on foreclosures are so-called “robo-signers” tied to a computerized program that is often identified in proceedings as the owner of record. Roughly 65 million homes are potentially affected. Employees at some lender banks have also admitted to signing off with absolutely no review.
As the public learned all this, it also got wind of The Interstate Recognition of Notarizations Act, which would have forced state courts to ignore many of the most commonly cited flaws, potentially streamlining and accelerating the already record pace.
The Act, first passed by the House in April of this year, sat quietly in the Senate Judiciary Committee until the day before Congress recessed for its midterm-election break. On September 27, with little attention or public debate, the bill was unexpectedly brought to the Senate floor and passed. A little over a week later, President Obama broke with his own party's leadership and announced that he’d veto the legislation.
Then, in mid-October, fifty-one Attorneys-General (including D.C.) simultaneously launched investigations into allegations that flawed documents were used in hundreds of thousands of foreclosures. Critics found it hard to imagine manufacturing $14 trillion worth of mortgage-backed securities and other games of mathematical chance in five years without cutting a lot of corners.
Within days, major lenders announced actions ranging from a temporary nation-wide moratorium on foreclosures to promises to hire “outside” reviewers or to review for potential defects even though lenders “had discovered no problems.” By month’s end, Bank of America had reinsituted foreclosures in 23 states, amending its declaration of “not one case” of error to read “a tiny number,” generally “misspellings and omissions.”
Sadly, the White House warned of the “unintended consequences to a broader moratorium.” Treasury Secretary Geithner cited “too many people taking on debt they couldn’t handle,” plus “Don’t hurt the recovery!” and “the Wisdom of Markets Forces” as reasons to oppose an extended moratorium while neglecting to show how to detect and quantify people who were “foolishly overextended.” He also failed to note that “the recovery” is 25-30% fueled by sales of foreclosed properties, or that the Free Market allowed banks to launch this “runaway train.”
Some prominent economists believe Geithner’s reluctance to back a moratorium is based on the fact that the government owns or is backing trillions of dollars in assets that no one wants, predicated on the same or similar suspicious loans that defaulted during the last Bush years, when the White House did nothing to stop the wave or force banks to restructure.
If foreclosed homes couldn’t be sold because of fraudulent paperwork or had to wait for more detailed inspections, imagine how difficult selling assets stuffed with faulty loans might be.
If it’s tough to find a title for a foreclosed home, think how tough it is to extract the related loan from a pyramid of securities sitting on top of it.
If a foreclosed property isn’t selling, it’s not recovering any money back to any asset waiting for it. What that can do to the value of toxic assets living at the Fed and the Treasury Department is simple: kill it.
Geithner’s stance is a reminder that business as usual has resumed. Candidate Obama advocated a foreclosure moratorium, as did his opponent. So did newly sworn-in President Obama. That was when things were still bad for the banks and the markets. Then profits, bonuses and stock prices got stronger. So did the power of the TooBigToFails.
The response from the Right is even worse. The GOP is mum, but its media surrogates (esp. The Wall Street Journal editorial page) have dismissed the lack of proper documents as a triviality. Paul Krugman put it best: In effect, they’re saying that if a bank says it owns your house, we should just take its word. To me, this evokes the days when noblemen felt free to take whatever they wanted, knowing that peasants had no standing in the courts. But then, I suspect that some people regard those as the good old days.
In 2000, then-Treasury Secretary--and now soon-to-be-departed White House economic guru Lawrence Summers--declared that the keys to avoiding financial crisis were “well-capitalized and supervised banks, effective corporate governance and bankruptcy codes, and credible means of contract enforcement.”
Back to Professor Krugman: The accounting scandals at Enron and WorldCom dispelled the myth of effective corporate governance. The idea that our banks were well capitalized and supervised sounds like a sick joke. And now the mortgage mess is making nonsense of claims that we have effective contract enforcement — in fact, the question is whether our economy is governed by any kind of rule of law.
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