“In The GOP, Every Day Is A Bank Holiday”: The Republican College Loan Plan Would Help Banks, Hurt Families
Big banks are doing better than ever. Sunday, New York Times financial columnist Gretchen Morgenson wrote that 2013 has been a very good year for the financial industry. The KWB Bank Index which tracks the stock prices of 24 leading banks has risen 30 percent this year and it’s at its highest level since 2008.
With the banks doing so well, why are House Republicans pushing so hard to make banks even more money on the backs of kids from working families who want to attend college? The answer is that every day in the Republican Party is a bank holiday.
House Republicans took a step last week to boost the fortunes of their banker backers even higher. The GOP House majority proposed changes for the college student loan program which is scheduled to expire July 1. The Republicans would allow the interest on student loans to double. This will mean even higher profits for the GOP’s banker backers. But it will end the hopes and dreams that thousands of young Americans and their families have for their future in the cut throat world economic competition.
President Obama made his case to stop the interest rate increases in a speech last Friday. The president supports a Senate Democratic plan that would freeze interest rates for 79 million students at 3.4 percent for 2 years. Congressional Republicans want to tie the interest rate to the cost of a 10 year Treasury note. The nonpartisan Congressional Budget Office estimates the House Republican plan would push interest rates to 5.0 percent next year and to 7.7 percent by 2018.
If Republicans get their way, increased interest rates for 79 million college students will mean a big payday for the financial industry next year and a another step down for middle income families. Millions of college grads are already up to their armpits in debt. The Republican plan would make it even harder for young college graduates to get up from under the crushing debt that they already face.
Chinese president Xi Jinping will be in the U.S. this week. His visit should focus the United States on what it needs to do to compete economically with the emerging industrial tiger.
The United States has fallen to 10th in the world in the percentage of people with a college degree. That may be why it’s much easier for people to advance economically in Western Europe than it is in the U.S. The Republican plan will push us down even further on the education ladder and give our economic competitors in the world a leg up. If we want to compete effectively internationally, we should do everything we can to get more young people into college instead of making it more difficult for them to attend college. College is the ticket young Americans need to punch to get the training they need to compete with China and other engines of international economic growth.
The U.S. should build on its strengths. We still have the best higher education system in the world. Hundreds of thousands of international students are currently enrolled in American colleges and universities to get the best college education in the world. We would be a lot better off if American students could afford to attend them too.
The GOP plan to boost banks at the expense of kids in working families mirrors the trends in the American economy at large. The Dow Jones Index, which measures the fortunes of corporate America on Wall Street, has hit record highs several times this year. While profits for corporate America have mushroomed, real income for middle class families has been stagnant. The Republican student loan program will accelerate an unfortunate trend that has enriched Wall St. and improvised middle class families who are working overtime just to meet ends meet.
By: Brad Bannon, U. S. News and World Report, June 4, 2013
“The Naysayers Are In Control”: A Well-Paying Job Is More Effective Than A Lecture
More and more mothers, whether they wear a wedding ring or not, are becoming their family’s breadwinner.
An analysis of 2011 U.S. Census data found that 40 percent of households rely on mom as the primary or sole breadwinner. That’s a massive increase from 1960, when the figure was a mere 11 percent.
This trend won’t shock a lot of Americans. They already see it within their own homes or those of their neighbors. Plenty of mommies are better educated and better compensated than their husbands, and a growing numbers of daddies gladly accept that it is their duty, too, to change diapers and do carpool duty.
But here is the more sobering tale within the data: Nearly two-thirds of these “sole or primary” breadwinning women fit that description because they are the only one working in their household. These are primarily the single mothers. And they tend to be far less educated, and to be black or Hispanic. Their median household income was $23,000.
Compare that to the families studied where it was a married woman who earned more than her mate. Those homes had a median income of $80,000, well above the national median for all households of $57,100.
The most relevant message behind the study is not so much about marriage as about the growing economic divide in this country. If we understand that, we might just agree on policies that can address the problem.
Demographically, these single mothers are a growing and younger percentage of the population. They are the nation’s future, and it’s not a promising one.
Yet it is virtually impossible to bring up the topic of single mothers, whether in Congress or at the dinner table, without inviting a howling lecture. Everybody’s got a convenient scapegoat to blame, and their certitude of their own uprightness permits them to do absolutely nothing to change the status quo. Except to call for more discipline imposed on the already unfortunate.
Attitudes about poorer families feed into the politics of welfare reform, food stamp allocation, education grants, fair wage policy and childcare subsidies.
Concern, when it’s genuine, is not misplaced. Moralizing doesn’t help.
It’s not the fact that these women are unmarried with children that drives their household poverty. It’s their lack of education and too few jobs, including for the equally under-educated men who are most likely to marry them.
Low-income families are more likely to divorce. Arguments and stress about money, after all, are often a contributing factor in divorce.
Those who wish to promote marriage often miss a truth about poorer mothers. The single mother without a college degree, and perhaps more so one without a high school diploma, might be making the best choice for her children by continuing to stay single. College-educated men aren’t exactly searching low-income areas to find a suitable spouse. The men who are more readily available to many of these single mothers — the men they may have already partnered with to father their children — tend to be of similar if not lower education levels.
And less-educated men have seen their real wages shrink along with job opportunities in the last 40 years, as Stephanie Coontz, director of research and public education at the Council on Contemporary Families, has pointed out.
Coontz also observes that stable single-parent households are better for children’s development than domestic situations in constant flux due to their mother’s relationships, or homes where there is constant parental conflict.
People who are better-educated and who have firm employment opportunities are more likely to marry and stay married.
A study published last year in the Journal of Marriage and Family found that low-income people value marriage as an institution and share thoughts about romance similar to people in higher income brackets.
Researchers at UCLA found that “low-income respondents were more likely than affluent couples to report that their romantic relationships were negatively affected by economic and social issues such as money problems, drinking and drug use.”
The low-income respondents actually held more negative views about divorce than their wealthier counterparts.
So let’s not pontificate about marriage or make false assumptions about mothers raising kids who aren’t living with a spouse.
Ordinary people in this country need to be able to find stable, legal employment that pays wages that make it possible to raise a family in a safe, nurturing environment. We have the ability to make that happen through education and training programs, minimum-wage legislation, trade policy, fiscal policy and other means.
If we ever resolve to turn the tide that is swamping Americans of modest means, we’ll inevitably find that some policy gambits succeed and others are bound to fail. Have you noticed, though, that our political class isn’t even trying?
The naysayers are in control. Their message is that nothing can be done. They also happen to be the loudest moralizers.
We know where that will lead us, because we’re already there.
By: Mary Sanchez, The National Memo. June 3, 2013
“Keeping The Outcry At Manageable Levels”: The Perverse Policy Math Of The GOP’s Sequester
So we’re 10 weeks in, and the GOP’s sequester strategy is coming into sharper focus. If a cut affects Americans residing at the higher end of the socioeconomic ladder, move heaven and earth to make it right. But if it affects folks who may have less means … crickets.
So while everyone knows about the heroic efforts of Republicans to rein in flight delays and restart White House tours, we hear a lot less about those who are losing the assistance they need to send their kids to school, eat a hot meal or just make it until they find their next job.
And one is left to wonder: How did a country like America ever get here? The answer is that it’s all part of the GOP’s long game against government.
It starts with a perverse kind of policy math that says if a government cut creates an inconvenience we should do something about it. But if a cut takes away something that’s critical to your survival today or the life trajectory of your kids, well, you’re out of luck.
And the way the sequester plays out – moving slowly across the land, knocking a handful of people out of Head Start here, reducing unemployment checks there – is the perfect way to effectuate a plan as brutal as the one Republicans conceive. Spreading out the impacts keeps the outcry at manageable levels, and ensures that there is no one critical mass of objectors – until it’s too late.
And in the mean time, the GOP gets what it’s long wanted: The slow withdrawal of government from the day-to-day lives of ordinary people. Government will continue to do many expensive things if the sequester plays out as intended: protect the country; administer justice; subsidize some industries and not others. But it will be out of the “help people go as far as their hard work and talent will take them” business. That just won’t be its role anymore.
We can certainly have a society that operates that way. There’s no rule against it. But what will America look like if the GOP gets it way?
On the one hand the amount of taxes some pay should go down. And those who are fortunate enough to be born into good life circumstances will have less competition to fear from those who are less well off – they simply will have less ways to get into a position to compete. Presumably that means wealth continues to collect at the upper ends of the socioeconomic structure, while more families fall to the bottom.
That’s not how the GOP would describe their approach, of course. But at some point we have to move past hysterical rhetoric about big government and get to the nuts and bolts of the policies they are attempting to effectuate under that banner. Now would be a good time to have that discussion.
It’s not only happening on the federal level. Texas Gov. Rick Perry has made headlines by calling on his state’s universities to find a way to provide a college education for $10,000. Now I suppose we could conclude that the governor really is concerned about people who can’t afford a more expensive education, though there’s little in his record to support that notion. More likely, this is his semester sequester. Rather than finding ways for less wealthy students to get the same quality education as their more well heeled counterparts, Perry’s putting the onus on the universities to dumb down their educational offerings for a less wealthy track.
All of this, of course, turns the way most of us think about government entirely on its head. When elected officials run for office, they do so by articulating a philosophy about how to address the problems we face – as a community, town, city or country. We vote for them when we conclude their prescriptions fit with the way we would like to see the problems we care about approached. Over the history of this country, that process – electing people who’s views align with our own – has resulted in the construction of a state that is more muscular in some areas, less so in others.
Another way of saying: Head Start didn’t just emerge like some kind of algae bloom on the national treasury. We, citizens, saw a problem, that disadvantaged kids weren’t getting a very good education. We asked our representatives to do something about it. Head Start was one of the solutions they came up with. If public polling is any indication, we like it. And if research is any guide, it works.
But the sequester means Republicans don’t have to debate the merits of Head Start. Instead, they keep the debate squarely in the frame that suits them best: that government is too big, it doesn’t work, we can slash away and no one will be the worse for it. But of course they will.
So where does this all end up? My guess is programs that people rely on sustain deep cuts, which becomes an argument to cut them even more: Look! Their performance is inexplicably worsening! And in some cases we get back to a place approximating where we were when the programs were first initiated. Over time, news reports and research bubbles up showing the deplorable circumstances under which some folks live, go to school, etc. Stirred by our conscience and the better angels of our nature we decide something has to be done. And we turn to government. Because that’s what its there for.
And at that moment, a cycle of absurd sequester stupidity will have finally run its course.
By: Anson Kaye, U. S. News and World Report, May 2, 2013
“The Stealth Sequester”: Americans Are Starting To Feel The Pain, They Just Don’t Know It Yet
So far, the much-dreaded “sequester” – some $85 billion in federal spending cuts between March and September 30 – hasn’t been evident to most Americans.
The dire warnings that had issued from the White beforehand – threatening that Social Security checks would be delayed, airport security checks would be clogged, and other federal facilities closed – seem to have been overblown.
Sure, March’s employment report was a big disappointment. But it’s hard to see any direct connection between those poor job numbers and the sequester. The government has been shedding jobs for years. Most of the losses in March were from the Postal Service.
Take a closer look, though, and Americans are starting to feel the pain. They just don’t know it yet.
That’s because so much of what the government does affects the nation in local, decentralized ways. Federal funds find their way to community housing authorities, state unemployment offices, local school districts, private universities, and companies. So it’s hard for most Americans to know the sequester is responsible for the lost funding, lost jobs, or just plain inconvenience.
A tiny sampling: Brandeis University in Waltham, Massachusetts is bracing for a cut of about $51 million in its $685 million of annual federal research grants and contracts. The public schools of Syracuse, New York, will lose over $1 million. The housing authority of Joliet, Illinois, will take a hit of nearly $900,000. Northrop Grumman Information Systems just issued layoff notices to 26 employees at its plant in Lawton, Oklahoma. Unemployment benefits are being cut in Pennsylvania and Utah.
The cuts — and thousands like them — are so particular and localized they don’t feel as if they’re the result of a change in national policy.
It’s just like what happened with the big federal stimulus of 2009 and 2010, but in reverse. Then, money flowed out to so many different places and institutions that most Americans weren’t aware of the stimulus program as a whole.
A second reason the sequester hasn’t been visible is a large share of the cuts are in programs directed at the poor – and America’s poor are often invisible.
For example, the Salt Lake Community Action Program recently closed a food pantry in Murray, Utah, serving more than 1,000 needy people every month. The Southeast Alaska Regional Health Consortium is closing a center that gives alcohol and drug treatment to Native Alaskans.
Some 1,700 poor families in and around Sacramento, California are likely to lose housing vouchers that pay part of their rents. More than 180 students are likely to be dropped from a Head Start program run by the Cincinnati-Hamilton County (Ohio) Community Action Agency.
Most Americans don’t know about these and other cuts because the poor live in different places than the middle class and wealthy. Poverty has become ever more concentrated geographically.
A third reason the sequester is invisible is many people whose jobs are affected by it are being “furloughed” rather than fired. “Furlough” is a euphemism for working shorter workweeks and taking pay cuts.
Two thousand civilian employees at the Army Research Lab in Maryland will be subject to one-day-per-week furloughs starting on April 22, for example, resulting in a 20 percent drop in pay. The Hancock Field Air National Guard Base is furloughing 280 workers. Many federal courts are now closed on Fridays.
Furloughs spread the pain. The hardship isn’t as evident as it would be if it came in the form of mass layoffs. But don’t fool yourself: A 20 percent pay cut is a huge burden for those who have to endure it.
Bear in mind, finally, the sequester is just starting. The sheer scale of it is guaranteed to make it far more apparent in coming months.
Some 140,000 low-income families will lose their housing vouchers, for example. Entire communities that depend mainly on defense-related industries or facilities will take major hits.
If you thought March’s job numbers were disappointing, just wait.
With the sequester, America has adopted austerity economics. Yet austerity economics is the wrong medicine at exactly the wrong time. Look what it’s done to Europe.
By: Robert Reich, The Robert Reich Blog, April 8, 2013
“The Snake Is Eating Fluffy In Little Bites”: The Press Is Missing The Sequester’s Evil Genius
Love it or hate it, there’s a certain genius to the sequester. No, it’s not the notion of including cuts aimed at offending folks on both sides of the ideological spectrum. Nor is it its purported ability to force a budget deal. No, the genius is in the seven months it will take to unfold.
Why? Because $85 billion in budget cuts should cause outrage from coast to coast. But spread it out over seven months, and you might just get away with it.
Take a look at what’s happening in Indiana. The Associated Press reports that Head Start programs in Columbus and Franklin Counties have “resorted to a random drawing” to figure out which three dozen kids to drop from their early childhood education program because of sequester budget cuts. Those will be the first children to lose what is anticipated to be about 1,000 slots statewide.
It’s one of the opening skirmishes in a slow rolling war of attrition that will eventually play out across the country. The 600 families who’ve already learned they’re losing rental assistance in King County Washington. The 418 who’ve lost their jobs at an Army Depot in Pennsylvania. The Kentucky hospital that fired 28 workers.
None of these examples, on their own, are enough to garner national headlines. At least at this early stage, it can be hard to get your head around the impact of a policy that costs thirty jobs here, kicks another hundred people out of a program there, dribs and drabs of misfortune that can easily get lost in the shuffle.
Eventually, of course, the depth of the sequester cuts will add up to major setbacks for countless Americans across the country. But by then, Republicans hope the waters will be sufficiently muddied, the connection between pain and the sequester sufficiently attenuated in the public’s mind, the cuts themselves sufficiently entrenched that mounting an effort to roll them back will fall to nothing. Genius.
Now, as it happens, there’s an entity well-positioned to foil the Republican plan: It’s the media. And a media committed to methodically reporting not only the day-to-day impact of the sequester on ordinary lives, but also the big picture of what the little examples are adding up to would do us all a real service.
Instead we get this: An examination by ThinkProgress found that the suspension of White House tours “were mentioned 33 times as often (Fox News had 163 segments, CNN had 59, and MSNBC had 42)” on cable news “as mentions of other sequester impacts hitting the poor. Any discussion of sequestration’s steep cuts to housing assistance, food stamps, and Head Start early education was virtually nonexistent on all 3 networks in the same time frame.” And as you’ve no doubt seen, it’s not just cable. White House tours have been everywhere, from the Washington Post editorial pages to the nether reaches of talk radio.
So when Michigan Republican Rep. Candice Miller urges the President to “stop trying to justify the unjustifiable,” or Kansas Republican Sen. Jerry Moran says, “We can and must be smarter with our spending decisions and make cuts in ways that do not intentionally and unnecessarily inflict hardship and aggravation upon the American people,” or when South Dakota Republican Sen. John Thune asserts that White House tours are “not the kind of duplicative and wasteful spending that we should be looking to target,” the media plays right along. This despite the fact that by any rational analysis, the cut that unjustifiably inflicts hardship on the American people is the one that denies underprivileged children an entrée to critical early education services.
Seriously. What must you think of the government if, after taking a full view of the sequester, you hone in on the suspension of White House tours as the element deserving of such disproportionate attention? That the other programs really aren’t very significant at all. For Republicans, that’s really the point. We might have expected the media to take a more critical view of the matter. No such luck.
Look, I like a good White House tour as much as the next person. And if you have a child who was looking forward to one, that can be a hard thing. But I think I may have a solution: tell them why they can’t go, and be ready with an alternative thing to do. There are lots of other fun and educational activities in Washington, after all.
Here’s a harder question: what do we say to the Indiana Head Start mother who told the AP that “[my son] loves school…I don’t know how I’m going to tell him he’s not going back.”
I’ve come to think of the sequester in the following (admittedly gruesome) way: it’s something like a snake eating a hamster. If it gobbles up fluffy all in one bite, you can see that hump moving all the way down the line as the snake digests his delectable treat. Hard to miss. But if snake eats fluffy one little bite at a time, the hamster’s still dead, and nobody notices. Unless someone calls the snake out.
Hey media: your move.
By: Anson Kaye, U. S. News and World Report, March 21, 2013
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