Sen. Elizabeth Warren (D-Mass.) introduced a bill today to allow borrowers to refinance their outstanding student loan debt. The Bank on Students Emergency Loan Refinancing Act is an excellent step toward easing the crushing $1.2 trillion student loan debt borne by graduates and reducing barriers to higher education for working families. Average college seniors in 2012 had a balance of $30,000 facing them as they graduated. Many borrowers find themselves making payments well after the end of the standard 10-year repayment period.
Unlike most forms of debt, student loans cannot be refinanced; the borrower is locked into an interest rate from the day he or she signs the promissory note—usually as a teenager—until the debt is paid in full. And unlike most forms of debt, borrowers are unable to take advantage of lower interest rates to reduce their monthly payments and total amount of interest paid.
The question we should be asking is why the government works so hard to carefully regulate growth with variable interest rates while allowing this massive pool of government-backed loans to remain at a fixed rate, trapping millions of workers in debt and unable to buy homes and cars?
Here’s one answer: The government is profiting from the federal student loan program. It’s raking in billions of dollars every year. The Congressional Budget Office estimates that by 2025, $127 billion in profit will be made off the backs of working families paying interest on student loans. In fact, some Republican members in the House have proposed student loan revenues be used to pay down the deficit. It shouldn’t come as a surprise that those same politicians lobbied successfully to tie student loans to market rates (which will make students loans more difficult to pay off as the economy improves). And these are the same politicians who fight to preserve massive corporate tax subsidies that make it more profitable for companies to send jobs overseas. Simply put, they are using the debt peonage of students to pay for billion-dollar corporate giveaways.
Corporations don’t need help from America’s taxpayers to boost their record profits. Fittingly, the Warren refinance bill addresses a major part of the tax giveaway to the wealthy and powerful by implementing the “Buffett Rule” to pay for the reduced profits. Under the Buffett Rule, many of the tax loopholes that let millionaire and billionaire CEOs reduce their taxes to almost nothing would be closed, requiring them to pay tax rates at least as high as their secretaries.
For student loan borrowers, though, it’s a different story. Unemployment, especially for young workers, remains unacceptably high at 10.6% for 20- to 24-year-olds. Wages are stagnant—and for young workers, wages are falling in relation to the rest of the population. Our struggling economy is producing mostly low-paying service-sector jobs that offer no room for growth. In fact, 42% of those earning the minimum wage have some college education, and 8% hold a bachelor’s degree or higher.
Congress’ decision to favor corporations over students is appalling. The Warren refinancing bill helps to undo some of the damage this decision has done to students and working families. Allowing borrowers to refinance their student loans puts them one step closer toward achieving the American Dream: They’ll be able to put a down payment on a home, fund their retirement and fund their own children’s education.
Along with increased funding on instruction and student services in order to lower the actual cost for public two- and four-year colleges and technical schools, the Warren refinance bill is a terrific step toward a comprehensive policy to make post-secondary education and training available to those who want it.
Reposted from AFL-CIO NOW
Tags: Buffett Rule, Corporate Accountability, Elizabeth Warren, Student Debt, student loans, unemployment, young workers
Privatization of services has long been a favorite “solution” of right-wing extremists looking to profit off of taxpayer funds. In attempts to sell the government service provision to private companies, many promises are made about the cost-effectiveness and superior quality product that can be offered by the private sector. But most of those promised benefits fail to materialize. Here are 10 lessons that government officials should learn before considering the privatization of services based on the experience of Chicago’s privatized parking meters (and other examples), as outlined in a recent Atlantic article:
1. It could cost you more than you think: Chicago residents saw parking meter rates rise as much as fourfold after meters were leased to a private company.
2. Things that worked before might stop working right: New electronic meters were installed in Chicago, but many of them didn’t give receipts or failed to work.
3. You could lose current benefits: Free parking on Sundays in the city was eliminated.
4. Constituents could get really upset: Once the parking meter system in Chicago began experiencing problems, the people began having protests and threatened a boycott of the lease.
5. You may not be able to change things back: The lease for the Chicago parking meters was 75 years long in exchange for $1.2 billion in up front revenue. Getting out of that lease could be very costly.
6. Revenue could be depressed: An inspector general found that the city of Chicago should’ve gotten nearly $1 billion more than it did from the private company.
7. Even if things get better, costs could go up: Hidden clauses in the Chicago contract require the city to reimburse the company for lost revenue, and the city was on the hook for a host of other costs, including construction, distribution of parking permits for people with disabilities and other possibilities.
8. Lowered costs could mean undercutting public workers: John D. Donahue, a privatization expert at the Kennedy School of Government at Harvard, says that cost savings are often achieved by undercutting public-sector wages and pensions.
9. Private companies often don’t take into account the same moral arguments that government does: Privatized prisons are the perfect example here, where the profit motive drives companies to demand that governments lock more citizens up.
10. Oversight, accountability and transparency are weakened or eliminated: While government activity is covered by laws that open up much of what an agency does to public scrutiny, most privatization contracts don’t include such measures and it becomes more difficult to know what companies are doing with taxpayer money and hold them accountable when they fail to produce adequate results.
Tags: Chicago, Corporate Accountability, Illinois, privatization
Bob Casey, senior senator from Pennsylvania, is urging Governor Tom Corbett to end his attempts to enact that state’s controversial voter suppression law.
“At every turn Pennsylvania’s Voter ID law has been rejected by the courts,” Casey wrote to Corbett’s office, “Continuing this appeal will only continue to cast a cloud of uncertainty over residents who are rightly concerned that this law will prevent them from exercising their right to vote.”
The letter comes three days after a Commonwealth Court judge denied the Corbett administration’s request to reconsider their January decision that struck down the law.
The Pennsylvania law, based on an ALEC model bill and championed by ALEC member legislators like Rep. Daryl Metcalfe, required that voters must show specific kinds of photo identification to cast a ballot. The legislature passed the bill in March 2012 knowing that 750,000 Pennsylvanians, many of them seniors, minorities, and low-income workers, did not have this type of ID.
While Gov. Corbett and his allies in the legislature pushed enormous cuts to education and public services, the state spent $7 million in a bungled, widely mocked attempt to enact the new voting restrictions.
After the law passed in March 2012, Working America members and organizers were able to reach estimated 642,000 Pennsylvanians with information about what they would need to vote. This year, our members are mobilizing in North Carolina to educate their community about that state’s new stringent voting restrictions; which, not coincidentally, is also based on an ALEC model and promoted by ALEC member legislators.
We don’t yet know if the Corbett administration will appeal the ruling and take the case to the Pennsylvania Supreme Court. But we hope he decides instead to follow the advice of Sen. Casey and thousands of others who want the governor to focus on creating more jobs, not fewer voting rights.
Photo by Senator Robert P. Casey, Jr. on Facebook
Tags: ALEC, Bob Casey, Corporate Accountability, North Carolina, Pennsylvania, Tom Corbett, voting rights
On April 29, 2014, restrictive voting laws in both Wisconsin and Pennsylvania were dealt major blows.
In Wisconsin, the voter ID law passed in 2011 and backed by Gov. Scott Walker was struck down by a federal judge. U.S. District Judge Lynn Adelman wrote that the law placed unfair burdens on poor and minority voters, as well as the nearly 300,000 Wisconsinites who currently lack ID. The law has not been enforced since a state judge ruled it unconstitutional in March 2012.
While attending the Time 100 gala in New York City, Gov. Walker told reporters: “We ultimately think that just like many other issues in the last several years that it will ultimately be upheld.” Wisconsin Attorney General J.B. Van Hollen Plans to appeal.
Over in Pennsylvania, Commonwealth Court Judge Bernard L. McGinley denied the request of Gov. Tom Corbett’s administration to reconsider his ruling that overturned that state’s voter ID law. McGinley struck down the law in January, finding that it put an unreasonable burden on the nearly 750,000 Pennsylvanians who lack photo identification.
The judge “also entered a permanent injunction,” said Pennsylvania ACLU legal director Vic Walczak, “which means the voter ID law cannot be enforced unless and until the [state] Supreme Court takes some kind of action.” The Corbett administration has not yet said whether they plan to appeal.
Those decisions come on the heels of a similar situation in Arkansas, where a judge declared that state’s voter ID law “void and unenforceable.”
These laws were part of a nationwide push for restrictive voting laws after the 2010 elections, backed by the power of the American Legislative Exchange Council (ALEC).
The Pennsylvania and Wisconsin voter ID laws were both based on ALEC model legislation and pushed by ALEC-affiliated legislators. According to NBC News, lawmakers proposed 62 photo ID bills in 37 states in the 2011 and 2012 sessions alone, and that “more than half of the 62 bills were sponsored by members or conference attendees” of ALEC.
The Pennsylvania law was championed by prominent ALEC member Rep. Daryl Metcalfe, who used taxpayer money to attend ALEC conferences.
So what’s next? Egregious voting restrictions are still on the books across the country, particularly in North Carolina. Working America members in NC have made it their primary focus to educate their communities about the law.
But as the New York Times editorial board put it, Wisconsin’s Judge Adelman has “paved the path” for similar laws across the country to be confronted by the court system.
Photo by vox_efx on Flickr
Tags: ALEC, arkansas, Corporate Accountability, Daryl Metcalfe, Pennsylvania, Scott Walker, Tom Corbett, voting rights, Wisconsin
Thom Tillis, Speaker of the North Carolina House and front runner for the Republican nomination for U.S. Senate, has deep ties to ALEC, the American Legislative Exchange Council. In the heated primary leading up to the May 6 election, those connections are paying off.
Since he took the role of Speaker in 2013, Tillis has helped pass a raft of corporate-friendly legislation. Many of these bills were based on ALEC models:
In 2013, after Republicans gained control of the North Carolina legislature and governor’s mansion for the first time since 1870, an array of right-wing legislation reflecting ALEC templates swept through the legislature. Both the Raleigh News-Observer and CMD found dozens of ALEC bills introduced in 2013, including measures that promote voter suppression, union busting, public funding of private schools, and the repeal of clean energy laws.
The onslaught of ALEC-influenced legislation in 2013 helped give rise to North Carolina’s “Moral Mondays” movement.
Tillis himself is not only an ALEC member legislator. He’s a member of the ALEC board of directors, a former member of ALEC’s International Relations Task Force, and received ALEC’s “Legislator of the Year” award in 2011.
Americans for Prosperity (AFP), the group founded and funded by billionaire David Koch, has already spent a whopping $7 million on TV ads attacking Democratic incumbent Kay Hagan. AFP’s ties to ALEC run deep:
AFP has long been a member of ALEC, and both David and Charles Koch have made personal loans to ALEC and funded the group through their foundations. Additionally, a Koch Industries lobbyist sits on the national board of ALEC — along with Tillis.
Art Pope, a North Carolina mega-donor who funds two state-based right-wing think tanks (both of which have been members of ALEC) also reportedly is supporting Tillis’ candidacy. Not coincidentally, Pope serves on the board of AFP.
As we’ve written before, ALEC disrupts democracy not just because of the policies they promote. By writing corporate friendly bills while also funding and promoting the campaigns of politicians who support those bills, they essentially turn legislators into delivery systems – not public servants. But in supporting Tillis and attacking his would-be opponent to the tune of millions, Pope and the Kochs are showing Tillis’ other legislative colleagues that they could benefit by toeing the ALEC line.
Photo via ncdot on Flickr
Tags: ALEC, Americans for Prosperity, Art Pope, Corporate Accountability, Education, Koch Brothers, moral monday, North Carolina, Thom Tillis, voting rights
It’s good to be a CEO, at least paywise. According to the 2014 AFL-CIO Executive PayWatch, released today, it’s 331 times better to be a CEO than an average worker. PayWatch finds that the average CEO of an S&P 500 company pocketed $11.7 million in 2013, while the average worker earned $35,293. The gap between CEOs and minimum wage workers is more than twice as wide—774 times.
AFL-CIO President Richard Trumka said that PayWatch:
“Calls attention to the insane level of compensation for CEOs, while the workers who create those corporate profits struggle for enough money to take care of the basics.”
While CEO pay has hit stratospheric levels, workers and their families have been left in an economic quagmire of stagnant wages, expiration of unemployment insurance for long-term jobless workers, an abysmally low minimum wage and unequal pay between men and women.
Many of the CEOs highlighted in PayWatch head companies, such as Walmart, that are notorious for paying low wages. This year PayWatch highlights five low-wage companies through stories from workers at Walmart, Kellogg’s, Reynolds American , Darden Restaurants and T-Mobile.
For example, in fiscal 2013, Walmart CEO Michael T. Duke received $20,693,545 in total compensation. PayWatch points out that a minimum wage worker at Walmart would have had to work 1,372 hours just to earn what Duke made in an hour. Tiffany, a Walmart worker and mother of two in Maryland, said:
“I earned about $12,000 last year as a full-time employee. These poverty wages force my family to receive public assistance. Currently, we are enrolled in the public health care program for low-income families, and the Women, Infants and Children program for my infant daughter.”
And while many of these companies argue that they can’t afford to raise wages, the nation’s largest companies are earning higher profits per employee than they did five years ago. In 2013, S&P 500 companies earned $41,249 in profits per employee, a 38% increase. Said Trumka:
“These companies are run by shortsighted business leaders, because people who earn minimum wage, for instance, can’t afford cellphones from T-Mobile or dinner at Red Lobster or the Olive Garden, both of which are owned by Darden Restaurants. America’s CEOs—as exemplified by the individuals of these companies—are cannibalizing their own consumer base. It’s wrong. It’s unfair, and it’s bad economics.”
PayWatch is the most comprehensive searchable online database tracking the excessive pay of CEOs of the nation’s largest companies. The website offers visitors the ability to compare their own pay to the pay of top executives, highlights the 100 top-paid CEOs, and breaks out CEO pay data by state and by industry.
The site also tracks and grades votes cast by 78 of the largest mutual-fund families on executive compensation at the public companies they invest in. Mutual funds own more than one-fifth of all shares in U.S. public companies, giving them a great deal of influence in determining executive pay at these companies.
PayWatch also gives you a chance to help the nation’s lowest-paid workers by signing a petition urging Congress to pass the Fair Minimum Wage Act of 2013. It would provide a much-needed increase to $10.10 an hour, raise the tipped minimum wage for the first time in more than 20 years and help lift more than half of the nation’s working poor out of poverty.
Sign the petition to raise the minimum wage.
Tags: ceo, Corporate Accountability, greed, minimum wage
House Republican leaders passed Rep. Paul Ryan’s (R-Wis.) budget this week by a vote of 219 to 205, with no Democrats voting in favor. The Ryan budget is chock full of so many terrible ideas that it’s hard to single out the biggest stinkers, but here goes.
1. Raising the Medicare Eligibility Age from 65 to 67. Not only would raising the eligibility age shift costs to 65- and 66-year-olds and to seniors who still qualify for Medicare benefits, but it would actually *increase* overall costs throughout the health care system. Worst. Idea. Ever.
2. Giving Corporations More Tax Breaks for Outsourcing Jobs. The Ryan budget calls for a “territorial tax system,” which would eliminate U.S. taxes on the offshore profits of companies that send jobs overseas. Second worst idea ever.
3. Costing 4 Million Jobs. And that’s only in two years! According to the Economic Policy Institute, the Ryan budget would cost 1.1 million jobs in 2015 and 3 million jobs in 2016. Millions more jobs would be lost in subsequent years.
4. Giving Millionaires a $200,000 Tax Cut. The Ryan budget would cut the top marginal income tax rate from 39.6% to 25%, giving people who make more than $1 million per year tax cuts averaging between $200,000 and $330,000.
5. Turning Medicare into a Voucher Program. The Ryan budget once again proposes to end the Medicare guarantee, which would raise premiums for seniors who choose traditional Medicare and leave traditional Medicare to “wither on the vine” as private plans capture the healthiest seniors.
6. Gutting Education. The Ryan budget would slash funding for kindergarten to 12th grade education by$89 billion and higher education by $260 billion over 10 years, making college less affordable and increasingstudent indebtedness by $47 billion.
7. Gutting Investment in Transportation. The Ryan budget would slash transportation investments by$52 billion in 2015, costing jobs and making America less competitive.
8. Gutting Medicaid. The Ryan budget would cut Medicaid funding by $732 billion over 10 years by turning Medicaid into a block grant program. It would further cut Medicaid funding by repealing the Affordable Care Act, for a total cut to Medicaid of some $1.5 trillion.
9. Slashing Tax Rates for Profitable Corporations. The Ryan budget would slash the corporate tax rate from 35% to 25%, squandering $1.2 trillion to $1.5 trillion in tax revenue over 10 years.
Reposted from AFL-CIO NOW
Tags: Corporate Accountability, Medicaid, Medicare, outsourcing, Paul Ryan, taxes
Anonymous extremists in the Ohio legislature are attempting to change the laws to increase the influence of independent groups in government and make it harder for average Ohioans to know what their government is doing or have any influence on that government.
According to Tim Burga, president of the Ohio AFL-CIO, an anonymous amendment was submitted to a bill currently before the legislature that would eliminate an administrative rule governing campaign finance. This would mean that contractors working for or attempting to work for the state can spend money trying to influence the outcome of elections of the very people who would potentially give them state contracts. Furthermore, Burga said the repeal of the administrative rule would make groups that make independent election expenditures no longer required to disclose who made contributions to them.
Burga condemned the amendment:
This amendment will further tilt the field toward the rich and powerful and their de facto control in running state government. The average Ohioan stands to lose in this arrangement as candidates and elected officials will increasingly turn to independent groups, as opposed to their constituents, for guidance on how to govern our state. We need a state government that is more responsive to the needs of Ohio at large, not less. Therefore, we need to move toward a system of campaign finance that increases the scrutiny of the dark money that is flowing into our state to influence our politics.
The irony should not be lost on any of us that this anonymous amendment was likely written by some of the very independent groups it seeks to empower, and it is doubtful any legislators have heard from their constituents clamoring for such changes to our election laws.
Reposted from AFL-CIO NOW
Tags: aflcio, Corporate Accountability, Ohio, voting rights
What began as a ploy from tech CEOs to limit gifted engineers from gaining higher wages and possibly better jobs has revealed itself to be a large-scale operation with multiple corporate participants.
Pando got its hands on some court documents that suggest companies like Dell, IBM, eBay, Microsoft, Comcast, and Clear Channel, participated in wage suppression practices under the guidance of the original CEOs, namely Google’s Eric Schmidt and the late Steve Jobs. This could mean that the number of affected employees is much larger than previously expected.
“These are the engineers building the hardware and software that are the lifeblood of the technology industry,” Joseph R. Saveri, the plaintiff’s lawyer said. “But they were prevented from being able to freely negotiate what their skills are worth.”
In one internal document Google lists several companies that are “sensitive” and should be placed on “restrictive hiring” and “do not cold call” lists.
Despite the implication of other corporations the Department of Justice made the decision to focus its attention on a few main players (Google, Apple, and Pixar for example) and those companies are currently looking to settle out of court.
According to Pando, the additional companies listed have denied any involvement in the conspiracy.
Tags: Corporate Accountability, Silicon Valley, wage suppression, wage theft
When the Kellogg Co. locked out some 220 workers from its Memphis, Tenn., plant in October, it was another step in Kellogg’s corporate battle plan to replace steady, middle-class, full-time jobs in the United States and elsewhere with casual part-time employees who would make significantly lower wages and substandard benefits.
Today the Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) union stepped up its campaign to shed light on Kellogg’s Greed and put pressure on the globally recognized cereal maker to end its Memphis lockout and step back from its plans to cuts jobs and shutter plants in the United States, Canada, the United Kingdom and Australia.
In videos on the just-launched website, Kellogg Greed, Memphis workers talk about the toll Kellogg’s lockout has taken on them and their families and workers in the London, Ontario plant in Canada that Kellogg is shutting down at the end of the year and reveal how they were deceived by the cereal maker.
Another video explores the $14 billion a year cereal giant’s plan to increase production in low-wage countries, including Mexico, Malaysia and Thailand.
While CEO John Bryant received $8 million in salary in 2013 and investors continue to profit from increasing dividend payouts and share buybacks, thousands of Kellogg employees and the communities they live in are left devastated and angry.
Take action and send a message to Bryant, urging him to end the Memphis lockout and cease the attacks on Kellogg’s dedicated and hardworking employees in the United States, Canada, the United Kingdom and Australia.
The Memphis workers have received support from national politicians, religious leaders, civil rights organizations and international labor groups, including the Congressional Black Caucus, the NFL Players Association (NFLPA), the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations, the National Action Network and others.
See all the videos below and stay tuned for more updates on this story:
Reposted from AFL-CIO NOW
Tags: aflcio, bctgm, Corporate Accountability, Kellogg, lockout, memphis, organizing, Tennessee