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The panel for this morning's House Oversight and Government Reform committee hearing on birth control access.
This morning, the House Oversight and Government Reform Committee is holding a hearing titled “Lines Crossed: Separation of Church and State. Has the Obama Administration Trampled on Freedom of Religion and Freedom of Conscience?” The topic, as you might guess, is the recent administration decision to mandate birth control coverage.
As you might not guess, the first panel of witnesses doesn’t include a single woman. The five-person, all-male panel consists of a Roman Catholic Bishop, a Lutheran Reverend, a rabbi and two professors.
Democrats on the panel were told they were allowed only one witness. They selected a young female Georgetown student, Sandra Fluke, who was going to discuss the repercussions of losing contraceptive coverage. But Representative Darrell Issa, the chairman, rejected her as “not qualified.”
When the hearing began this morning, the Democratic women on the committee walked out. Representative Elijah Cummings, the ranking Democrat, put out a statement blasting Issa:
It is inconceivable to me that you believe tomorrow’s hearing has no bearing on the reproductive rights of women. This Committee commits a massive injustice by trying to pretend that the views of millions of women across this country are meaningless, worthless, or irrelevant to this debate. […]
Even if you fundamentally disagree with Ms. Fluke’s viewpoint on this matter, you should not be afraid to hear it. A hearing stacked with last-minute witnesses who offer no competing views only contributes to the perception that our Committee is fostering a circus-like atmosphere intended to further politicize this debate.
The hearing will continue well into the afternoon, with a brief lunch break. You can watch a livestream here. We'll post more updates later.
UPDATE: At a press briefing this morning, House Minority Leader Nancy Pelosi called out Issa’s selective witness list. “What is it that men don’t understand about women’s health and how central the issue of family planning is to that?” she asked. “Where are the women? And that’s a good question for the whole debate. Where are the women. Imagine, having a panel on women’s health and then not having any women on the panel, duh!”
A committee spokeswoman reached out to me this afternoon, offering to correct the record on the witness list and rebuke Pelosi. “Rep. Pelosi is either ill informed or arrogantly dismissive of women who don’t share her views. Today’s hearing does in fact include two women, Dr. Allison Garrett of Oklahoma Christian University and Dr. Laura Champion of Calvin College Health Services.”
As I noted, it was the first panel that was woman-free. The second panel indeed has the two aforementioned women, though I will note both are testifying against the administration’s contraception policy. Also, Dr. Champion is the only one of now eleven witnesses who has any public health experience.
UPDATE 2: Though Sandra Fluke, the Georgetown student, wasn't allowed to testify today, she did speak passionately about access to birth control at the National Press Club last week. You can watch her remarks here:
Yesterday, House Republicans announced a surprising retreat: after insisting for weeks that any deal to extend the payroll tax cut, unemployment insurance and the Medicare “doc fix” would have to be offset by budget cuts, House Speaker John Boehner and his leadership team announced they would introduce a bill to extend the payroll tax cut for one year with neither conditions nor spending reductions.
For the second time in as many months, Republicans have had to step back from a confrontation with Democrats over the payroll tax cut. They insisted back in December that they wouldn’t pass any extension without deep cuts, but then did—along with extended unemployment insurance and the “doc fix”—though just for two months. Facing that deadline, they’ve surrendered again. It’s another defeat for Congressional Republicans, and their failure to obtain cutbacks is also a setback in their long-term strategy to shrink government, as Brian Beutler notes.
But there’s one important catch—if Democrats accept this compromise, it would leave 5 million unemployed Americans in danger of losing their benefits beginning on February 29. If that happens, people in the first four tiers of the federal unemployment insurance program could finish that tier, but would not be able to advance to the next one. Anybody on a separate extension, called Fed Ed, would lose their benefits almost immediately.
Republicans say they will continue to negotiate on the unemployment extension after the payroll tax cut is dealt with, but they have several draconian requests: that everyone on unemployment participates in GED programs if they have no high school degree, and also submit to mandatory drug testing. Republicans also want to reduce the length of benefits to fifty-nine weeks, which is less than the seventy-nine weeks the White House wants and the ninety-three weeks Senate Democrats want.
Advocates for the unemployed have blasted the move and warned Democrats not to accept it. Christine Owens, executive director of the National Employment Law Project, sent out a statement deriding the recent developments:
Unemployed women and men are tired of being pawns in partisan games. No one has suffered longer or deeper or more from the recession and slow job growth than the long-term unemployed and their families. To knowingly place their well-being on the line yet another time—to explicitly contemplate that their benefits will expire—is so beyond the pale, its proponents should be ashamed even to suggest it.
We hope the House of Representatives will reject this shameless stunt and act quickly and reasonably on both the payroll tax freeze and extension of unemployment insurance benefits. But if it fails or refuses to do so, NELP calls on the Senate and the White House to repudiate this cynical ploy and demand that the federal unemployment insurance programs be extended through the end of the year before the long-term unemployed are forced to do without the income support they vitally need to continue searching for jobs, support their families, and contribute to their communities.
Democrats have so far not agreed to the Republican compromise; House Democratic leaders said yesterday that both unemployment insurance and the payroll measure must be extended simultaneously. White House Press Secretary Jay Carney said yesterday an unemployment insurance extension was “equally” as important as the payroll tax cut, before immediately rephrasing his statement by saying it was “very” important.
Republicans calculate that by taking away the Democrats’ payroll tax cut leverage—that is, by agreeing to pass it with no strings attached—they can drive a harder bargain on unemployment insurance. So there’s a few ways this could play out: fearful of not getting unemployment extensions, Democrats could come back to the table now and negotiate a total package that’s more friendly to Republican demands. Alternately, if that doesn’t happen, Republicans could just pass the straight payroll tax extension for one year and dare Democrats in the Senate to reject it. Even in that case, the Senate could approve it, but send back a package that also extends unemployment insurance, thus putting the onus back on the House Republicans.
This may seem like an overwrought, inside-the-Beltway food fight. But for millions of unemployed Americans, the outcome is crucially important—and there are only two weeks to solve the problem.
President Obama released his proposed budget today, mapping out how the White House would prefer to see the federal government operate through the fall of 2013.
The key word is “prefer,” because as every news account of the budget will tell you, the plan is dead on arrival in Congress. Republicans lambasted the proposal before the details were even released, and today Representative Paul Ryan, chair of the House Budget Committee, called the Obama budget “a recipe for a debt crisis and the decline of America.” So they’re not passing it.
The White House knows this, and designed the budget essentially as a political document to contrast with Republican priorities heading into the election. The plan moves away from deficit-cutting actions—the White House budget director, Jacob Lew, said yesterday on Meet the Press that “the time for austerity is not today”—and towards measures aimed at goosing the improving, but still weak economy.
Most notably, the White House wants the very wealthy to pay for much of these stimulative measures—hiring teachers, rebuilding infrastructure and boosting manufacturing. This is an obvious nod to the increasing national focus on income inequality, not to mention the anticipation of facing a multi-millionaire ex–Wall Streeter Mitt Romney in the fall.
Here are some highlights of the budget plan, which the White House is characterizing as a “New Foundation”:
The plan calls for a total federal budget of $3.8 trillion; the projected deficit for that time period is $901 billion.
There are $1.5 trillion in new taxes, mainly from allowing the Bush tax cuts to expire for those earning over $250,000 annually but also a total tax overhaul that closes loopholes and is billed as a “fair share” restructuring.
Obama also proposes taxing dividends of the wealthiest taxpayers as ordinary income, which would be subject to a 39.6 percent rate assuming the Bush tax cuts for top earners also expire. This is commonly known as the “Buffet Rule,” and replaces the current capital gains tax rate of 15 percent. This is a departure from the White House’s earlier position on dividends, which it wanted to increase taxes on, but only to 20 percent.
The budget calls for a ten-year, $61 billion “financial crisis responsibility fee” on the largest financial companies. According to the White House document, the fee would be levied “in order to compensate the American people for the extraordinary assistance they provided to Wall Street, as well as to discourage excessive risk-taking.” (This is not a new idea, and was first introduced by the White House in January 2010 amidst the outrage over excessive bonuses on Wall Street).
The budget includes notable education investments, including $5 billion to help schools attract and train high-quality teachers. It also calls for a program to train 2 million workers for high-demand industries via increased community college funding, which was the subject of Obama’s appearance at a northern Virginia community college this morning.
The national infrastructure bank, a part of Obama’s jobs plan in the fall, is naturally included, as is a 5 percent bump in research and development funding. There are billions of dollars in several areas meant to goose manufacturing, from a bigger transportation bill to increased funding to enforce trade rules.
That’s the good stuff. There are also some distressing items, most of them deep spending cuts—including some in Medicare and Medicaid. The Center for American Progress calls some of these cuts “painful.” The cuts are largely dictated by the debt ceiling deal struck in August, but the White House was a party to that deal, and in fact wanted it to be larger than it was.
Again, this budget will never pass—but it serves as a useful political tool for the White House and a starting point or negotiation in the Senate, whenever money for the next fiscal year is finally approved. If, of course, it is approved. I doubt Republicans would threaten a government shutdown in an election year, but I’ve learned never to underestimate what they might or might not do.
Yesterday, Politico’s website ran a story titled: “Keystone XL handled well by State Department, inspector general says.” The story asserted that “there is no evidence of conflict of interest or bias in the State Department’s review of TransCanada’s proposed Keystone XL pipeline.”
Well, not quite. The IG found that there wasn’t any technical conflict of interest when the State Department selected the firm Cardno Entrix to perform an environmental impact review of the project, but the report did highlight plenty of flaws in the review process—and also recommended the State Department change its contracting processes going forward.
Cardno Entrix had previously identified TransCanada, the company building the pipeline, as a “major client,” which would seem to be a clear conflict of interest. Among the report’s findings:
TransCanada influenced the State Department’s selection of Cardno Entrix. The report characterizes the influence as “minimal” and not “improper,” but does acknowledge TransCanada selected Cardno Entrix as its preferred company to perform the review. A rejoinder from one State Department employee in the report was simply that “we don’t care who TransCanada picks.”
The State Department failed “to perform any independent inquiry to verify Cardno Entrix’s organizational conflict of interest statements.”
TransCanada was not asked by the State Department to view and certify Cardno Entrix’s conflict of interest statements.
Overall, the review found that the State Department’s “limited technical resources expertise and experience” limited environmental review process. The officers in charge of the review, according to the report, had “little or no” experience with environmental law “and had to seek training and learn quickly on the job.”
The State Department has already agreed to tweak its contractor review process, but this won’t affect the official environmental impact statement that’s already been performed.
Opponents of Keystone XL, however, are using the report to make the case that the project isn’t environmentally sound, despite the State Department review. “The [IG] findings confirm once again why the project should not be rubber stamped for approval, despite efforts by Republicans in Congress to do just that,” said Senator Bernie Sanders. “The more we learn, the less merit there is to this project.”
The soundness of the State Department review is likely to come back into play in the future—President Obama has delayed, but not cancelled, a final decision on the project. And this week, a Republican-led House panel approved a bill to fast-track Keystone XL. That effort will probably die in the Senate, but Republicans could attach it as a poison pill in the massive transportation bill that Congress will presumably pass some time this year.
Last month, we noted the progressive push to get Federal Election Commission reform from the White House. A wide array of good government and campaign finance groups joined forces to ask President Obama to install new FEC members with recess appointments or some other avenue, before the 2012 elections.
The FEC frequently fails to enforce even basic campaign finance rules—it hasn’t issued a single major ruling on Super PACs, for example—and this is largely due to an even split between Republican and Democratic members.
The groups’ petition drive was targeted at the White House online outreach page, which guarantees an official response if any petition gets 25,000 signatures. The groups announced today that they crossed that barrier.
“The people have spoken, and now we’ll see if the White House is listening,” CREW executive director Melanie Sloan said in a statement. “It is time for President Obama to appoint new commissioners who will faithfully enforce our nation’s campaign finance laws.”
The administration’s response is going to be very interesting to watch, especially since just this week the president’s campaign fully embraced the use of Super PACs. In announcing that move, campaign manager Jim Messina promised that while Obama was forced to compete on the Super PAC playing field for now, he remains serious about campaign finance reform. We’ll soon see if that extends to reforming the FEC.
It’s finally here: a massive settlement, worth $25 billion, with five major banks over mortgage fraud abuses. The federal government and forty-nine state attorneys general—Oklahoma’s Scott Pruitt wouldn’t sign on because he doesn’t think banks should see any penalty—reached the agreement with JPMorgan Chase, Bank of America, Wells Fargo, Ally Financial and Citigroup last night, and the deal was announced this morning in Washington. A federal judge must still sign off on it.
We’ll have a lot on this settlement in coming days and weeks, and the details of this hugely complicated deal—the broadest settlement for wrongdoing since the tobacco lawsuit—are still coming out at a furious pace.
But here are some basic details. This is what’s good about the settlement:
Banks could end up paying out as much as $45 billion in benefits to homeowners. $5 billion will go to state and federal authorities, which can be used for legal aid for homeowners (more on this in a bit); $17 billion goes to homeowner relief; $3 billion goes towards refinancing; and $1 billion goes to the Federal Housing Administration. But under complicated formulas in the deal, homeowner relief could total as high as $45 billion, if all servicers participate, and there are incentives built in for the banks to disperse this money in the next twelve months.
The immunity the banks receive for this payment is fairly narrow, certainly in comparison to what had been rumored earlier. The banks will only be released from investigations and charges related to foreclosure fraud and robo-signing—not all the malfeasance leading up to the crash, like the origination and securitization of bad mortgages. This means that the new federal unit to investigate that fraud still has its authority intact.
Even in the robo-signing arena, New York Attorney General Eric Schneiderman will still be allowed to proceed with his MERS suit, which charges that banks used the private records system to fraudulently foreclose on thousands of homeowners. (We wrote about that here). The banks pushed this week to have that suit dissolved, but Schneiderman won.
While states can no longer sue the big banks for most foreclosure fraud, individual homeowners can—and that $5 billion to the states will be used for legal aid, so aggrieved homeowners can get a lawyer and pursue a case. “This will get a lawyer for everyone facing foreclosure in the state,” one source in an Attorney General’s office told Firedoglake. “This will stop every wrongful foreclosure.”
Here’s what’s not so good:
The total damages paid by banks, even if they reach the upper limit, is still much less than the $700 billion in negative equity in the housing market. So this hardly fixes the problem the banks essentially created.
Homeowners will get some help, but probably not enough. The New York Times estimates the average homeowner relief at $20,000—but the average underwater home is $50,000 deep. “I just don’t think it’s going to be a life-changing event for borrowers,” one expert told the Times.
When the deal calls for “750,000 people who lost their homes to foreclosure from September 2008 to the end of 2011” to “receive checks for about $2,000,” that’s got to be disappointing for those homeowners. Imagine a bank essentially took your home from you, likely through fraudulent means. How happy would you be with a check for $2,000?
The penalties banks will pay will come, in large part, from investor money. (About $5 billion of the settlement is actual money from the banks). For homeowners, aid is aid, but the more the banks face real, punitive damages themselves, the less likely misconduct will be in the future.
So as you can see: the deal is really good in terms of limiting immunity given to banks—which by several accounts is due to the work of Schneiderman and other aggressive attorneys general who refused to sign onto a bad deal—yet could go further in terms of help for homeowners.
In short: the biggest battles have yet to be fought. And that’s a significant victory, considering the initial deal was supposedly going to let the banks off the hook on just about everything.
“[This deal] gets a relatively small sum from the banks in exchange for limited immunity on their flagrantly illegal robo-signing—or forgery—of mortgage documents,” said Robert Borosage of Campaign for America’s Future. “The real question isn’t this ante. The real question is whether the federal investigation will finally turn over all the cards so we know just how bad a hand the banks are holding. Only then is there a possibility for real accountability – and real relief for homeowners.”
On Monday, Obama campaign manager Jim Messina announced that Priorities USA, a Super PAC staffed by former White House officials, would receive full fundraising support from the official re-election effort. On Tuesday, he visited Wall Street:
Jim Messina, President Barack Obama’s campaign manager, assured a group of Democratic donors from the financial services industry that Obama won’t demonize Wall Street as he stresses populist appeals in his re-election campaign, according to two people at the meeting. […]
In response to a question, Messina told the group of Wall Street donors that the president plans to run against Romney, not the industry that made the former governor of Massachusetts millions, according to one of the people, who spoke on condition of anonymity to discuss the private meeting. […]
Messina also discussed the president’s reversal in encouraging donors to contribute to independent political action committees backing Obama, the person said. Messina’s remarks to the group echoed a public e-mail he sent to supporters saying, “We can’t allow for two sets of rules in this election whereby the Republican nominee is the beneficiary of unlimited spending and Democrats unilaterally disarm.”
The story, from Bloomberg Business Week, doesn’t mention specifically that Messina asked for donations to Priorities USA. But given that he promised to be nice to the financial sector and “discussed” the new Super PAC effort with these high-dollar donors, one can pretty easily read between the lines.
Again, it’s easy to see the campaign’s logic in revving up its Super PAC. It may need to do that for strategic reasons. The question still remains: What must they promise donors for their increased support? These Wall Street folks that Messina met with already backed the president's re-election, but if they end up donating even more to the Super PAC, it’s unlikely they would do so without expecting some consideration in return.
Elsewhere on this front, the New York Times had a strong editorial today criticizing the campaign’s decision to back Priorities USA:
Priorities USA Action and other Democratic groups have raised only $19 million. And, as Mr. Messina wrote on the Obama campaign’s blog, “with so much at stake” Democrats decided that they would not “unilaterally disarm.”
But if President Obama had refused to join in this downward spiral—and if he had proudly campaigned on that refusal—he and his campaign might have made up for that deficit in other ways: with more small contributions, and more support, from a public disgusted by the outsize influence of big money.
A president has a megaphone bigger even than Mr. Rove’s bloated bank account, and Mr. Obama could have impressed many wavering voters if he had chosen to use it against campaign corruption. He could have pointed out that it was Republicans who blocked the Disclose Act, which would have ended secret corporate donations, and that it was Republicans who used unlimited corporate funds to win back the House in 2010, pressing a corporate agenda that has severely hurt the middle class.
He could have ridiculed Mitt Romney’s super PAC for accepting $18 million from just 200 donors in the second half of last year, including million-dollar checks from hedge-fund operators, industrialists and bankers.
But now Mr. Obama has given up that higher ground. He had already undermined the public financing system for presidential campaigns by refusing to use it in 2008, but this is much worse. In that campaign, he at least forswore money from independent groups and lobbyists. Now he is relying on a super PAC that can accept money from anyone.
He is also telling the country that simply getting re-elected is bigger than standing on principle.
You can read the whole thing here.
(AP Photo/Manuel Balce Ceneta)
Last night, President Obama’s campaign manager, Jim Messina, sent out an e-mail announcing that the Super PAC Priorities USA will now receive the full backing and support of the presidential campaign:
With so much at stake, we can’t allow for two sets of rules in this election whereby the Republican nominee is the beneficiary of unlimited spending and Democrats unilaterally disarm.
Therefore, the campaign has decided to do what we can, consistent with the law, to support Priorities USA in its effort to counter the weight of the GOP Super PACs. We will do so only in the knowledge and with the expectation that all of its donations will be fully disclosed as required by law to the Federal Election Commission.
What this change means practically: Senior campaign officials as well as some White House and Cabinet officials will attend and speak at Priorities USA fundraising events. While campaign officials may be appearing at events to amplify our message, these folks won’t be soliciting contributions for Priorities USA. I should also note that the President, Vice President, and First Lady will not be a part of this effort; their political activity will remain focused on the President’s campaign.
The political calculus here is obvious, and the decision inevitable. Last year, the leading pro-Democratic Super PACs and some nonprofit affiliates raised $19 million. The top ten GOP Super PACs raised $64 million over the same period—and that doesn’t include $32 million raised by Karl Rove’s Crossroads GPS. Priorities USA has struggled to raise money to this point, in part because the campaign hasn’t given it the kind of support it is now pledging.
Obama’s team no doubt looked with angst at these fundraising totals, and last week they watched Super PACs supporting Mitt Romney spend $15 million in Florida on advertisements targeting Newt Gingrich, who had only $3 million in Super PAC support. Gingrich was blown out of the water only a week after winning South Carolina, and without suffering any sort of notable gaffe or change in political fortune beforehand.
Money makes a difference, particularly in national elections, and the number of voters who count campaign finance purity as their top issue probably number in the hundreds, particularly amidst an economic crisis. It was never a question of if Obama would rev up Super PAC support but when.
Messina took pains in his e-mail to assert Obama’s distaste for outside money, and outline the president’s previous opposition: only days after Citizen’s United was announced, Obama called out the decision during his State of the Union address with the justices sitting not twenty feet away. He also supported the DISCLOSE Act to increase transparency in campaign finance.
In a potentially major development, Messina also announced in his e-mail that “if necessary” Obama would support a constitutional amendment limiting money in politics—a key rallying point for many progressive groups. "Amending the Constitution is the only way to completely overturn the Court’s decision, and President Obama should be applauded for lending his support to the movement to restore democracy to the people," said People for the American Way's Marge Baker. Public Citizen also praised the newfound support for a constitutional amendment, because "[w]e are now in the midst of a Citizens United-induced democracy death spiral," in the words of Public Citizen president Robert Weissman.
But the conversation cannot stop at the political rationale of Obama’s move, even if one accepts it. It’s important to be clear-eyed about the consequences of this decision: it will give corporations and the very wealthy an even larger voice not only in the election but well beyond it.
Super PACs are kind of like the hedge funds of campaign finance—vehicles tailor-made for the very wealthy. Romney’s biggest Super PAC, for example, raised 86 percent of its money in donations over $100,000, with $26 million coming from just ninety donors. Think about that for a second: if Romney’s spending in Florida really did win it for him—it surely helped a great deal in any case—ninety (very wealthy) people were responsible for it. That’s not very democratic. As Chris Hayes put it on Up this weekend, “the new Super PACs exist chiefly as an instrument for the extremely wealthy to funnel massive amounts of cash into influencing the outcome of our elections.”
Citizen’s United didn’t create Super PACs—what it did was allow them to collect unlimited amounts of money from corporations, who previously couldn’t spend such amounts on elections. So now corporations will have an even larger ability to influence an election that’s going to turn, at least in large part, on the fundamental issue of whether corporations already exert too much control over national affairs, from Wall Street to the oil fields.
It’s not good enough for Obama’s administration to say simply it needs this support to win in November. It probably does. The key question is: what about after November? To what will they owe their new big donors?
Among Priorities USA’s new donors, there may be an occasional George Soros, who donates big money mainly out of principle. But without question many of them will be corporations and business interests. Not even the most vehement Obama partisans could argue that those corporations will expect nothing in return should Obama win back the White House. This point hasn’t been addressed in the campaign’s current public relations campaign to explain its Super PAC as a necessary evil.
This is why some campaign finance experts are dismayed with the administration’s decision. I spoke with Jeff Clements, co-founder and general counsel of Free Speech for People, who said the administration’s “capitulation to the domination of our democracy by corporate-funded Super PACs is unfortunate,” and said it was “throwing in the towel in on this corruption of our government and elections.”
Russ Feingold, in an interview with the Huffington Post, also raised the spectre of influence-buying in 2013 and beyond. "It is a dumb approach," he said. "It will lead to scandal and there are going to be a lot of people having corrupt conversations about huge amounts of money that will one day regret that they went down the route of what is effectively a legalized Abramoff system."
Clements suggested the president should explicitly endorse the People’s Rights Amendment to the Constitution, which his group created, and to immediately sign an executive order forcing companies that have a government contract to disclose its donors—this is something the administration drafted this spring, but never implemented.
Obama could also show he’s actually serious about campaign finance reform by reforming the FEC via recess appointments, something several progressive groups are already urging him to do. He could and should also make it much more clear what kind of constitutional amendment he favors.
The decision may have been born of political necessity, as the campaign insists, but there’s work to be done to prove that Obama is truly opposed to big money's role in politics. “What separates the candidates now is what they will do in the near term and after the election to fix it," said a joint statement from Nick Nyhart and David Donnelly at Public Campaign. "Mitt Romney has said he wants even more special interest money flowing directly into campaign war chests. President Obama should sharply distinguish his vision from his potential opponent by campaigning on a platform of 'elections of, by, and for the people' – all the people. Such a platform means a muscular 'all of the above' program: a small-donor driven campaign system, a constitutional amendment to overturn Citizens United, no big money nominees to the Supreme Court, increased disclosure, and a cop on the beat at the FEC to strictly police our campaign finance laws."
New York Attorney General Eric Schneiderman filed a major lawsuit today against three major too-big-to-fail banks, charging them with rampant foreclosure fraud in the wake of the housing crisis. It’s a crucially important lawsuit in its own right, but also raises major questions about the nature of the supposedly looming federal and state settlement with these same banks.
Schneiderman is acting here as New York attorney general—not as co-chair of the new federal task force on the financial crisis. That effort aims to uncover wrongdoing before the crash—or, “the stuff that blew up the economy,” as he put it last week.
This is different. Schneiderman, on behalf of New York State, is accusing Bank of America, JPMorgan Chase, and Wells Fargo of serious and wide-ranging abuses with foreclosures—of improperly foreclosing on homes they didn’t have the correct ownership of or paperwork for. Specifically, Schneiderman is targeting the Mortgage Electronic Registry System (MERS), which he also names in the lawsuit. MERS is a private, national database of foreclosures created by the banks and used widely for taking people’s homes—but since it wasn’t public and run by the financial institutions that stood to gain from rapid foreclosures, there were (shockingly!) a lot of errors and improper filings.
“The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages. Once the mortgages went sour, these same banks brought foreclosure proceedings en masse based on deceptive and fraudulent court submissions, seeking to take homes away from people with little regard for basic legal requirements or the rule of law,” Schneiderman said in a statement.
In that announcement, he echoed his recent theme that banks should no longer be too big to jail. “Our action demonstrates that there is one set of rules for all—no matter how big or powerful the institution may be—and that those rules will be enforced vigorously,” he said. “Only through real accountability for the illegal and deceptive conduct in the foreclosure crisis will there be justice for New York’s homeowners.”
Progressive groups were quick to praise Schneiderman’s suit. “There can be no resolution of our nation’s ongoing mortgage crisis without aggressive action to address MERS abuses and the executive actions that lay behind them. The American people deserve justice, and they deserve to know more about the abuses that created a financial disaster for millions of people while unjustly enriching a few,” said Richard Eskow of the Campaign for America’s Future.
The suit further muddies an emerging picture of the mortgage settlement with the banks over foreclosure fraud abuses.
The settlement is expected to ask the banks for $25 billion for a release of many robosigning and foreclosure fraud abuses.
Recent details leaked to the press have indicated that MERS claims would be exempted from the settlement, and Schneiderman’s suit would seem to confirm that—or that he wouldn’t be a party to any settlement that didn’t release MERS claims, since that would torpedo today’s lawsuit.
But as David Dayen at Firedoglake asks—if this is all true, then what exactly are the banks paying for in a settlement? In other words, if the settlement allows the big banks to be prosecuted for all pre-crash behavior, but then also all this post-crash MERS trickery, then why are they agreeing to a settlement at all? Something doesn’t quite add up.
I have no particular insight into this apparent contradiction—like most folks, I find it hard to figure. But we’ll certainly stay on top of it.
Today’s job numbers were a welcome surprise: 243,000 people were added to payrolls in the past month, which is far more than the 140,000 analysts were predicting. Encouragingly, the gains were broad across came in many sectors: manufacturing, construction, temporary help agencies, accounting firms, restaurants and retailers. It was the biggest job growth since April, and it brought the unemployment rate down to 8.3 percent.
As has been the case since the crash, however, there’s a huge “but” here. The economy, while improving, is still in rough shape and the country is suffering from a massive jobs deficit. There are 5.6 million fewer jobs now than in December 2007. There are four job-seekers for every job, and long-term unemployment is still far too high, at over 40 percent.
From the Center on Budget and Policy Priorities, here’s a graphic look at just how bad of a hole we’re in, in historic terms—and why we need job growth at much higher rates than even this month’s surprise:
Ben Bernanke, the Federal Reserve chairman, said today that “We still have a long way to go before the labor market can be said to be operating normally. Particularly troubling is the unusually high level of long-term unemployment.”
Immediate help could come by an extension of unemployment benefits, which are set to expire (again) at the end of this month after the December payroll tax compromise punted the issue. But beyond that, serious government action on jobs is needed to nurture these small increases and create a serious push towards a real growth.
Some other quick notes on the jobs numbers:
As always, the jobs numbers are already becoming a political football. I haven’t actually seen any irrational exuberance from Democrats yet—perhaps they are wise not to chain themselves to something so fragile. Republicans are (fairly) noting how bad the situation still is, but (unfairly) blaming administration policies. House Speaker John Boehner blasted out a press release this morning titled “We Can Do Better,” and Mitt Romney said he “welcomed” the increase but “these numbers can’t hide the fact that the President’s policies have prevented a true recovery.” Note: despite the broad increases across many sectors, 14,000 government jobs were lost in the past month—no doubt fueled by Republican austerity politics and the national and state levels.
Manufacturing numbers are truly encouraging—50,000 jobs were added, which is the largest one-month increase since August 1998, according to the Alliance for American Manufacturing. Part of this, of course, is that there are so many lost jobs to regain, but the growth is encouraging.
Last month, I noted that veterans were left behind in the modest employment gains. Bucking the recent downward trend, January’s veteran unemployment level decreased, from 13 to 9 percent. Last fall, the only part of Obama’s jobs plan to pass was focused directly at veterans, providing tax breaks for hiring and job-retraining programs. Funny how that works.