DISPATCHES

FEDERAL BUDGET CRISIS WAS CAREFULLY PLANNED

As Republicans sought to blunt criticism of their refusal to pass a “clean” continuing resolution to authorize federal government operations into the new fiscal year, they placed the blame on President Obama and Senate Majority Leader Harry Reid for refusing to negotiate on the GOP demand that they agree to the defunding of the Affordable Care Act. But Sheryl Gay Stolberg and Mike McIntire reported at the New York Times (10/5) that shortly after President Obama started his second term, a loose-knit coalition of conservative activists led by former Attorney General Edwin Meese III gathered in Washington to plot strategy to derail the President’s health care law. Meese and leaders of more than three dozen conservative groups decided to push their fellow Republicans into cutting off financing for the entire federal budget.

“We felt very strongly at the start of this year that the House needed to use the power of the purse,” said one coalition member, Michael A. Needham, who runs Heritage Action for America, the political arm of the Heritage Foundation. “At least at Heritage Action, we felt very strongly from the start that this was a fight that we were going to pick.”

With polls showing Americans deeply divided over the law, conservatives believe the public is behind them. Although the law’s opponents say that shutting down the government was not their objective, the Times reported, the activists anticipated that a shutdown could occur — and worked with members of the Tea Party caucus in Congress who were excited about drawing a red line against a law they despise.

The billionaire Koch brothers, Charles and David, were deeply involved with financing the overall effort. A group linked to the Kochs, Freedom Partners Chamber of Commerce, disbursed more than $200 mln last year to groups involved in the fight, the Times reported. Included was $5 mln to Generation Opportunity, which created a buzz in September with an Internet ad showing a menacing Uncle Sam figure popping up between a woman’s legs during a gynecological exam.

The largest recipient of Freedom Partners cash — about $115 mln — was the Center to Protect Patient Rights, according to the groups’ tax filings. Run by a political consultant with ties to the Kochs and listing an Arizona post office box for its address, the center appears little more than a clearinghouse for donations to still more groups, including American Commitment and the 60 Plus Association, both ardent foes of the A.C.A.

As the defunding movement picked up steam, Republicans who sounded tepid were targeted. The Senate Conservatives Fund, a PAC dedicated to “electing true conservatives,” ran radio ads against three Republican incumbents. Heritage Action ran ads in the districts of 100 Republican lawmakers who had failed to sign a letter by freshman Rep. Mark Meadows (R-N.C.) urging Speaker John Boehner to take up the defunding cause.

“They’ve been hugely influential,” David Wasserman, who tracks House races for the nonpartisan Cook Political Report, told the Times. “When else in our history has a freshman member of Congress from North Carolina been able to round up a gang of 80 that’s essentially ground the government to a halt?”

Lee Fang reported at TheNation.com (10/8) that the Conservative Action Project (CAP), an ad-hoc coalition created in the early years of the Obama administration to reorganize the conservative movement, has been active in plotting the shutdown. It is managed by the Heritage Foundation and the Council for National Policy. CAP initially floated the idea of attaching funding for Obamacare to the continuing resolution, and followed up with grassroots organization, paid advertising and a series of events designed to boost the messages of senators like Ted Cruz, Fang wrote.

MILLIONS OF POOR LEFT UNCOVERED BY STATE HEALTH PLANS. The sweeping effort to extend health coverage to millions of Americans will leave out two-thirds of poor blacks and single mothers and more than half of the low-wage workers who do not have insurance, the very kinds of people that the program was intended to help, the New York Times reported (10/3). Because they live in states controlled by Republicans, mainly in the South, that have declined to participate in the expansion of Medicaid to cover the working poor, they are among 8 mln Americans who are impoverished, uninsured and ineligible for help despite the federal offer to pay for the expansion through 2016 and no less than 90% of costs in later years.

The 26 states that have rejected the Medicaid expansion are home to about half the country’s population, but about 68% of the poor, uninsured blacks and single mothers. About 60% of the working poor are in those states. Among those excluded are about 435,000 cashiers, 341,000 cooks and 253,000 nurses’ aides.

Paul Waldman noted at Prospect.org (10/3) that people already have to be desperately poor to qualify for Medicaid under existing rules. But it isn’t until you get to 133% of the poverty level ($31,321 in yearly income for a family of 4) that you’re eligible for subsidies to buy insurance on the exchanges, because when the law was written the idea was that everyone under that income would get Medicaid.

“When all those Southern states decided to refuse the Medicaid expansion in order to shake their fist at Barack Obama, they screwed over their own poor citizens,” Waldman wrote. “So millions of people will be caught in the middle: not poor enough to get Medicaid, but too poor to get subsidies on the exchanges.”

Under pre-ACA law, each state set its own eligibility level for Medicaid. In more liberal states, those levels are fairly high. Massachusetts gives Medicaid to families up to 133% of poverty ($25,988 for a family of 3), New York up to 150% ($29,306) and Minnesota up to 215% ($41,990). But in conservative states, the levels are far stingier. Arkansas actually had the stingiest standard ($3,133 for a family of 3) but it accepted Medicaid expansion. Of those that rejected Medicaid expansion, the stingiest are Alabama, which rejects families of 3 that make more than $4,503, or 23% of the poverty level; Indiana, $4,698 (24%); Louisiana, $4,699 (24%); Texas, $4,894 (25%); Mississippi, $5,677 (29%); and Virginia, $5,872 (30%).

“That means that the states where the Medicaid expansion would have done the most good for the most people are precisely those states where Republican governors and legislatures have told their poor citizens that they’re out of luck,” Waldman wrote.

“It may be that in the next few years, many of those states will give in and accept the money, instead of making their poorest citizens the victims of their loathing for Barack Obama. Let’s hope,” he concluded.

IDAHOAN WITH 10 KIDS ON MEDICAID DENOUNCES GOV’T HEALTH PLAN. Mark Karlin notes at Truthout.org (10/9) that NBC News recently posted an article profiling some of the diehard anti-Obamacare Americans. One of them was Greg Collett, a 41-year-old software developer in Caldwell, Idaho, who said he would rather pay the fine — $95 the first year — than sign up for the insurance. “I don’t think that the government should be involved in health care or health insurance,” he said. He is among the 29% of people who said in an NBC News/Kaiser Poll they are angry about the health reform law.

Collett, who is married and has 10 children, said the kids are covered by Medicaid, the joint state-federal health insurance plan for people with low-income and children who are not covered. He likes taking Medicaid to sending children to public school — although he doesn’t approve of government-funded public schools, either. “The government is taking your money. They are spending it on things they shouldn’t be,” he says. “Trying to get whatever you can back — I have nothing against that. You have to at some point try and get your tax dollars back.”

DISABILITY ADVOCATES DENOUNCE ‘60 MINUTES’ REPORT. National disability organizations have criticized a misleading CBS 60 Minutes report on Social Security disability which relied on anecdotal evidence to portray the vital program as wasteful and unsustainable, despite the fact that award rates fell during the recession and that fraud is less than 1% of the program.

60 Minutes on 10/6 stoked fears that the Social Security Disability Insurance program is “ravaged by waste and fraud,” relying on a partisan investigation by Sen. Tom Coburn (R-Okla.) and anecdotal evidence to hype growth in the program while misleadingly claiming that it “could become the first government benefits program to run out of money.”

Rebecca Vallas, co-chair of the Social Security Task Force at the Consortium for Citizens with Disabilities — a coalition of approximately 100 national disability organizations — told Media Matters the coverage was “sensational” and did a “tremendous disservice” to people with disabilities.

The myths pushed by 60 Minutes have been repeatedly debunked by experts. The report admitted that the vast majority of people applying for benefits are denied, but ignored the fact that the majority of appeals are also denied, and that award rates have actually fallen during the economic recession. In April, the Wall Street Journal called the claim that federal disability benefits were to blame for people leaving the labor force “exaggerated,” explaining that disability was in fact the least common reason individuals left the workforce.

Center for Economic and Policy Research’s Dean Baker noted the report also “completely ignored all the comments from experts in the field ... pointing out that fraud is in fact not rampant in the disability program.” Indeed, the Government Accountability Office has repeatedly found that fraud accounts for approximately 1% of all disability payments.

Furthermore, the recent growth in the program was expected due to shifts in demographics — as the Social Security Administration explained to 60 Minutes — and the trust fund which pays for disability benefits is not in crisis. Congress periodically reallocates funds to support the program, and can easily do so again.

Prior to the airing of the 60 Minutes segment, 23 national disability organizations, including the Consortium for Citizens with Disabilities and Health & Disability Advocates, wrote to 60 Minutes’ executive editor Bill Owens warning about the dangers that inaccurate media portrayals which push these very myths can pose to people with disabilities.

The misleading CBS investigation follows a discredited report from public radio program This American Life and NPR’s All Things Considered which similarly leaned on anecdotal evidence to make sweeping generalizations and stoke fears about federal disability benefits. More than 100 organizations that advocate for and support people with disabilities signed a letter criticizing the piece, saying it “paints a misleading and inaccurate picture of the Social Security programs,” and eight former Social Security commissioners wrote an open letter denouncing the NPR piece. NPR was forced to clarify the report following the widespread criticism. (Hannah Groch-Begley, MediaMatters.org)

BANKS MISTAKENLY BREAK INTO HUNDREDS OF HOMES SINCE ‘08. Contractors hired by giant financial companies to manage abandoned and defaulted homes have broken into hundreds of the wrong private homes due to incorrectly identifying addresses and other basic errors, Ben Hellman reported at the Huffington Post (10/2).

When a bank or other financial company sees that a mortgage it owns has gone into default, it begins checking to see if the residents have abandoned the property. If they have, it takes responsibility for the upkeep of the property in order to protect its investment and the property values of surrounding homes. That work is often done on a contract basis by companies like Safeguard Properties, which has been sued at least 135 times over wrongful break-ins conducted in pursuit of property management contracts with banks, according to Hallman’s review of court filings around the country. In total, more than 250 lawsuits have been filed in 31 different states over the past five years.

In some cases contractors go to the right address but break into a home that isn’t yet bank owned and cause damage that destroys the owner’s ability to sell the house at a loss – a move which dampens the damage to a borrower’s credit score compared to entering foreclosure.

The problem stems from cost-cutting behavior and lax oversight of the property management companies themselves. Companies like Safeguard Properties “solicit workers to inspect homes for as little as $1 to $2 each” on online forums. Cutting corners in the inspection stage leads to incorrect work orders being filed, which leads to workers breaking into supposedly abandoned homes only to find them occupied. While workers are supposed to leave upon finding evidence that the inspector who referred them to the home was incorrect, Hallman relates multiple examples of homeowners who were effectively burgled by bank agents who “appear to see a fully stocked home as an opportunity to loot valuables.”

Safeguard Properties defended its record, saying that the number of errors is minuscule next to their total workload of 1.5 mln work orders on abandoned properties in 2012 alone.

There have been plenty of individual stories about this very situation. Katie Barnett of MacArthur, Ohio, had her home trashed by bank employees who had come to the wrong address. The bank blamed the error on faulty directions from a GPS unit, but declined to compensate Barnett. And as banks and other financial firms pass around mortgage rights, even families that are current on their mortgages can wake up to learn their house was sold out from under them due to shoddy paperwork. The Sinclair family of Altadena, Calif., had their home sold despite being current on payments for their modified home loan. The Sinclairs tried to warn the company of the problem, but couldn’t get someone to talk to them on the phone. Jo-Ann Seipp of Florida told ThinkProgress a similar story of wrongful sale despite being current on her mortgage in June. Wells Fargo sold her house to an investment firm even after she paid up and they told her they had stopped foreclosure proceedings. Etienne Syldor, a bus driver at Walt Disney World in Orlando, had his home foreclosed despite being ahead on his mortgage payments and paying more than was required by the contract.

The foreclosure crisis has meant a boom in business opportunities for unscrupulous companies that do the ground-level work of making the foreclosure machine churn. A pair of Colorado companies were accused this summer of inflating what they charge homeowners to post legal notices in a scheme that brought multi-million-dollar profits to the firms. A host of non-bank mortgage servicing companies have sprung up to buy thousands of mortgages from originating lenders and big banks at fire sale prices and then flip them for a profit. These companies’ hasty work ethic combined with the fact that trillions of dollars’ worth of mortgages lack the proper legal documentation to prove which company has the rights to the loans means chaos for homeowners. (Alan Pyke, ThinkProgress.org)

FARM BILL STILL GOING NOWHERE. The federal government was shut down by the failure of Congress to pass a continuing resolution and the health insurance marketplaces created by the Affordable Care Act opened for business on 10/1. It also was the day that the Farm Bill expired. While this technically means that the law reverts back to the permanent 1949 law, Steph Larsen of the Center for Rural Affairs noted that Secretary of Agriculture Tom Vilsack has not indicated he would implement the old law — yet.

Since both houses of Congress passed version of the new bill, with the Senate acting in June and the House in July, the next logical step would be to appoint “conferees,” a small group of legislators to work out the differences between the two versions of the bill. The Senate has done this; the House has not. Sen. Chuck Grassley (R-Iowa) has noted that both bills contain identical language on payment limits for traditional commodity programs, which the Center has long supported, Larsen noted. However, Grassley fears it could get stripped or weakened in negotiable, even if it’s supposed to be untouchable if it passed both chambers.

One major difference between the chambers is the treatment of food stamps, officially known as the Supplemental Nutrition Assistance Program. The Senate proposed to cut the program by $4 bln over 10 years while the House removed food stamps from the farm bill and in a separate bill cut $39 bln from food assistance, which would remove several million people from the program and subject SNAP to reauthorization in three years vs. the five years for other farm programs.

In the week before the government shutdown, Senate Majority Leader Harry Reid proposed that the farm bill be included in the larger budget package. House Speaker John Boehner rejected the proposal, but American Farm Bureau Federation lobbyist Mary Kay Thatcher told the National Journal (10/6) she was heartened by Reid’s statements. “It appears likely that the farm bill may not be able to pass as a stand-alone bill, so if Majority Leader Reid believes we can get a good bill that combines nutrition and agriculture into one package and can pass by adding it to other bills, that is good news. The sooner we can pass the farm bill, the better,” she said.

If the impasse continues, the next big Farm Bill deadline is 1/1/14, when milk prices could skyrocket as the Agriculture Department would be required to buy milk at higher prices under the 1949 formula, which could cause milk prices to double.

Rod Leonard, a former special assistant to USDA Secretary Orville Freeman, who served under John F. Kennedy and Lyndon Johnson, noted in a commentary at the Institute for Agriculture and Trade Policy (iatp.org) in August that food stamps were authorized in 1964 as part of Freeman’s program to link the capacity to feed a growing nation to a policy insuring that every person, regardless of income, is entitled to share in an abundantly productive agriculture while establishing supply management as the new post-war policy for American agriculture.

“Industrial agriculture—i.e., corn, soybean, wheat, cotton and rice—desperately needs new farm legislation to authorize a new system of farm subsidies. A new Farm Bill would continue $20 bln in annual subsidies to industrial agriculture (mostly to fewer than 200,000 farmers) through government subsidies to private crop insurance. Current programs that pay farmers directly, and are rapidly losing public support, would end,” Leonard wrote.

“If the House GOP succeeds in its mission to punish nearly 48 mln people who rely on the food stamp program (and the 15 mln people eligible for the program that don’t apply for food stamp benefits or choose to remain at risk of hunger), then farm and food programs, joined together in April 1964, also will end.”

Leonard concluded: “The effort of the House GOP to perform political surgery to remove food stamps can have only one predictably disastrous outcome: Food stamps will survive. An urban nation will not compel millions of its residents to accept a life dominated by hunger. But, if divorced from food stamps, farm programs, whose benefits largely are delivered to the largest 200,000 farm operations, likely will perish in the ideological bonfire that is the GOP Farm Bill. The political conflagration will inevitably include rural America as well.

“Simply put, no food stamps, no farm program.”

JAPANESE NUKE CONTINUES TO LEAK RADIOACTIVE WATER. Japan’s crippled Fukushima nuclear plant has sprung yet another leak, spilling 430 liters of contaminated water thousands of times more radioactive than legal limits, its operator said (10/3). Tokyo Electric Power (TEPCO) said the water that spilled from the storage tanks had radiation readings as high as 200,000 becquerels per liter, almost 6,700 times higher than the legal limit of 30 becquerels.

Sandbags were placed to prevent the further spread of the leak, but some of that water may have already reached the plant’s harbor on the Pacific Ocean through a drainage trench, TEPCO said, according to an NBC News report (10/7).

The leak, discovered (10/2), is the latest in a long string of setbacks to hit attempts by TEPCO and the Japanese government to make the site safe. The operator announced (10/1) that four tons of rainwater contaminated with low levels of radiation had leaked during an operation to transfer water between holding tanks, Reuters reported.

The tanks, which are used to store the excess water pumped over damaged reactors to keep them cool, were flooded by the recent tropical depression Sepat, a spokesman told Reuters.

In August, TEPCO said one of these same tanks had leaked 400 tons of highly radioactive water.

WHAT LIBERAL MEDIA? Charles Pierce noted that the New York Times (9/30) ran a front-page article on Sen. Elizabeth Warren (D-Mass.) with the headline, “Warren Is Now The Hot Ticket On The Far Left.” Pierce commented at Esquire.com, “Yes, the Senior Senator, who wants to put back in place financial regulations that were in place for nearly 70 years, somehow represented the ‘Far Left.’ Miraculously, the headline [on the national printed edition] was changed this morning [on the website]. So, in a spasm of charity, I am willing to stipulate that the NYT was only being really dumb for eight hours at a stretch. Nice work, gang.”

From The Progressive Populist, November 1, 2013