Congress

Student Loan Industry: We Are NOT Dead Yet

Armand Biroonak — Fri, 13 Nov 2009 15:21:21 -0800

Recently the Secretary of Education, Arne Duncan, advised college financial administrators that with the likely passage of the Student Aid and Fiscal Responsibility Act (SAFRA) in the Senate, universities nationwide should prepare to switch over to federal direct lending of student loans. SAFRA already passed by the House, would end the Federal Family Education Loan program (FFEL) that doles out billions in wasteful federal subsidies to private lenders. In response to the Secretary, banks and their allies in the Senate made it known that they are alive and ready to battle to keep their profits, that reform is in no way a done deal.

Some of the biggest private student loan companies have joined together to form a “grassroots” campaign against SAFRA, called Project Student Choice. They even have a Facebook page chock full of misguided information to lure student support. While this past week, Chase and Ed America –among the largest student loan companies –announced that they see no reason to stop providing loans under FFEL. In other words, they are confident that the Senate will not pass reform legislation, so no need for stockholders or colleges to prepare for the move. Ed America also made explicit their support of preserving the status quo with their endorsement of Republican Senator Lamar Alexander's (TN) plan that extends the life of FFEL. The company goes on to claim , “We want to put STUDENTS back into student loans.” Or put directly, preserve their profits.

Lenders have friends in the Senate too. Democrat Ben Nelson (NE) recently sent a letter in defense of the student loan industry, chastising Secretary Duncan’s announcement to colleges. The senator complained the Department of Education’s actions “may be seen as clouding the debate” and that this is “spreading alarm in order to promote the government-run Direct Loan program.”

Not surprisingly, Nelson’s top contributor is the troubled student lender Nelnet Inc. Nelnet is the same company I wrote about recently, who is being sued by the federal government, accused of defrauding the government nearly $300 million with their participation in FFEL. This is on top of Nelnet’s previous settlement with the Department of Education worth hundreds of millions for fraud in 2007.

Unfortunately, SAFRA and the historic reforms it provides by ending billion dollar corporate giveaways are on hold in the Senate at the moment. Until health care legislation is passed, the Student Aid bill joins the queue with other important bills awaiting Congress’ attention. With that said, this is no moment for progressives to take a cat nap. This longer than expected window of time only means that big banks and lenders can resurrect from the dead and build support in the Senate to kill reform legislation that jeopardizes their precious profits, at the expense of student and taxpayers.

Visit the Campaign for College Affordability and tell your Senator to put Students over Banks! by supporting the Student Aid and Fiscal Responsibility Act.

House Hearing Shines Light on Student Bankruptcy Injustice

Armand Biroonak — Sat, 26 Sep 2009 07:53:42 -0700

Earlier this week the House held a hearing on private student loans and bankruptcy, shedding light for the first time on a rather unknown yet devastating aspect of student debt.

Did you know that because of legislation dating back to 1976 under the Higher Education Act private student loans are unable to be discharged through bankruptcy? In other words, feel free to run up the credit card and splurge, but take out loans to pay for education? That’s just reckless.

The number of students taking out private (or nonfederal) student loans has increased significantly over the past decade. Private student loans now make up nearly a quarter of the overall market, compared to just ten years ago when they made up a small fraction. This spike is not only due to skyrocketing tuition –the average four-year tuition has increased 30 percent from a decade ago –but also because of the complexity of the financial aid process that leaves many students vulnerable to take out the worst of loans. In fact, many students turn to private loans before even exhausting available federal aid and loan options.

Source: College Board

Meanwhile, private lenders capitalize on this confusion, even at times in cahoots with universities, preying on young adults, steering them towards more risky loans.

These loans pawned on students by private lenders are often downright predatory, offering little consumer protections. Private loan interest rates are normally variable, with average interest rates running between 9 and 13 percent, nearly double that of federal loans. On top of that, the flexibility of repayment for private loans are much less pliant, in almost all cases a missed monthly payment results in an automatic interest rate hike of 2 percent, with additional fines and fees to punish borrowers.

And you can imagine that with the toughest job market in decades, coupled with staggering student debt averaging $23,000, students are finding they can no longer keep up with repayment. But unlike federal loans, private lenders do not have to offer flexible payment plans or a forbearance option to struggling borrowers. Why should lenders? When they can maintain hefty profits.

While in truly tough times, students needing to discharge their private loans in bankruptcy are forbidden to. In other words, if you face chronic unemployment, a medical emergency or even die –tough luck, student loan debt will continue to be an albatross.

Congress though may finally be addressing this injustice. This week’s hearing was the first time the issue has been addressed since written into law in 1976! Rep. Steve Cohen (D-TN) announced he will soon file legislation to give private student loan borrowers more equitable treatment during the bankruptcy process. And in another good sign, House Chairman of Education and Labor Committee, Rep. George Miller is on board as well, stating, "There’s no justifiable reason that the lenders who provide them should be treated any differently than credit card companies, auto finance companies, utility providers, and other creditors.”

New Health Care Coalition Calls on Lawmakers Not to Ignore Retiree Health Care

Alex Hogan — Mon, 14 Sep 2009 07:13:10 -0700

As members of Congress return to Washington, D.C. to address health care reform, a new alliance of businesses and labor unions is reminding policy makers not to forget the health care needs of a key segment of the population: Americans aged 55-64.

The Bridge Years Health Coalition, which includes the International Brotherhood of Electrical Workers, the Communication Workers of America and Verizon Communications, is launching a public campaign to let President Barack Obama and lawmakers know that any serious health care reform bill must ensure access to affordable, quality health care for the approximately 33 million Americans who are nearing retirement but are facing an increasingly uncertain financial future.

In a letter the coalition addressed to congressional leaders, it writes that for these "Bridge Years" workers:

(M)edian income is dropping and their health is declining. Many are in financial jeopardy - retirement savings slashed by falling equity markets, worried about whether they will be able to keep their jobs ... The availability and cost of health insurance can be the difference between a secure retirement and economic collapse.

Workers who fall into the 55-64 range find themselves in a precarious position in today's economy. Too young to receive Medicare, they are viewed as too "old" by many private insurers, with premiums as much as five times higher than those for younger workers.

For those between the ages of 60 and 64, nearly one and three applicants for individual insurance are denied coverage due to a pre-existing condition. This lack of affordable insurance makes early retirement impossible for many workers, which means holding on to a job that provides coverage becomes the difference between financial stability and ruin.

For companies that do provide health care coverage for retirees, the rising cost of health care is creating a tremendous financial strain.

According to IBEW International President Edwin D. Hill:

Retiree health care is becoming one of the most contentious issues our union has to deal with when we sit down at the bargaining table. Our members and our employers need some relief from Washington so the health care of our retirees isn't put at risk.

The coalition advocates that Congress explore different options to make sure bridge years workers are covered, including:

* Giving them a choice of plans that are subject to a reasonable age rating limit and ban exclusions for pre-existing conditions.

* Government-funded relief to employers that offer retiree health benefits.

To read more about the Bridge Years Health Coalition, click here.

Congress Connecting the Dots? Climate Change is a Security Threat

Armand Biroonak — Wed, 12 Aug 2009 04:36:38 -0700

Recently reported in the New York Times, Sen. John Kerry (D-MA) hopes to win Senate support for climate change legislation by linking global warming with national security. Long time hawk and former Sen. John Warner (R-VA) has also caught on to the idea, testifying on the Hill even, proving it a possible strategy to sway more hawkish conservative Republicans and Democrats to support the Waxman-Markey bill in September.

Military experts understand the threats associated with climate change. A number of reports published from the National Intelligence Assessment and the Defense Department have warned of the possible geo-political strife –caused by events like natural disasters and mass migration –that will likely strain and overwhelm our military’s capabilities to respond, assist and maintain stability.

Recent findings by the Center for Naval Analyses –that includes top retired military officials –brings the problem closer to home by demonstrating the connection between energy, security, economics and climate change.

In summary the report warns:

• U.S. dependence on oil weakens international
leverage, undermines foreign policy objectives,
and entangles America with unstable or
hostile regimes.

• Inefficient use and overreliance on oil burdens
the military, undermines combat effectiveness,
and exacts a huge price tag—in dollars
and lives.

• U.S. dependence on fossil fuels undermines
economic stability, which is critical to national
security.

• A fragile domestic electricity grid makes our
domestic military installations, and their critical
infrastructure, unnecessarily vulnerable to
incident, whether deliberate or accidental.

Most important to national security, America must end its dependency on oil. Beyond concerns of the continued burning of fossil fuels that contribute to the greenhouse effect, America’s energy security is a cause for alarm. The U.S. relies upon foreign oil to meet energy needs. Right now nearly 60 percent of our oil is imported, placing the U.S. in an extremely vulnerable position—we are at the mercy of the world markets.

Secondly, oil reserves are dwindling with greater global demand. The U.S. holds just over 2 percent of the world’s total oil reserves. The solution? Renewable energy can place us on the path to energy independence and security.

Source: BP's 2009 Statistical Review of World Energy

The catastrophic effects of global warming place the U.S. at definite risk. Not even the strongest military in the world will be able to handle the pressures induced by what UN Secretary-General Ban Ki-Moon states “is the greatest collective challenge we face.” This is why Congress must pass cap-and-trade legislation in September to begin to tackle climate change; but surely many in the Senate will stand in the way. Reframing the argument with a national security bent may be the last chance for opponents to warm in support of cap-and-trade or it's toast.

Congress Breaks with Administration, Protects Defense Lobby

Armand Biroonak — Mon, 06 Jul 2009 13:57:34 -0700

Ignoring earlier recommendations of the Secretary of Defense, Robert Gates, the 2010 defense bill throws funding lifelines to failed weapons systems slated to be cut. Resisting the call to reform, the House Armed Services Committee showcased their protection of the defense lobby instead. Already Obama has promised to veto their bill moving through the Senate, making for quite a fight if cuts are not restored.

The National Defense Authorization Act passed by the House and now in the Senate provides $680 billion in 2010 for defense related activities—of which $180 billion is set aside for weapons acquisition. Members of the House Armed Services Committee—responsible for the bill and voting unanimously in support of it—asserted their reasons for opposing key cuts outlined by the Obama administration:

Chairman of House Armed Services, Rep. Ike Skelton (D-MO), painted a rosy picture of the bill’s objectives by affirming:

“This year’s defense bill promotes our main policy objectives: restoring military readiness; eliminating waste and recovering savings through acquisition reform; and maintaining robust oversight of the Department of Defense.”

Yet, provisions in the bill shun expert military opinions. Gates opposes the bill’s continuation of the F-22 program and the Navy’s Top Officer criticized the bill’s plan to alter the development of the already delayed, expensive F-35 jet program.

Ranking Member, Rep. Roscoe Bartlett (R-MD):

“The Administration is gently slapped in this bill for its failure to provide Congress with the standard analyses required to justify significant changes in several major programs. In addition to ballistic missile defense cuts, these include cuts in the Joint Cargo Aircraft (JCA), Future Combat Systems (FCS) and the F-22.’”

However, Bartlett only needs to go as far as the numerous GAO reports that point to the ballooning costs and unproven design of programs to understand why the Administration called for cuts or reduced funding. The Future Combat Systems is conservatively estimated to cost $160 billion and faces significant deficiencies in development.

The F-22 Raptor has been called “an expensive weapon in search of a mission.” Designed for a Soviet threat that no longer exists, the jet has constantly been re-modernized for decades. Facing cost overruns of over 200 percent, it is the most expensive fighter jet ever made. The Undersecretary of Pentagon Acquisitions even stated that its mission capable rate is “troubling.”

Ranking Member, Rep. Todd Akin (R-MO):

“This bill is a decent one, given the fiscal restraints that President Obama and the Democrat Congress have imposed on the Department of Defense. We should be spending more on the defense of our nation, but this is a reasonable start.”

Spend more on defense?? Akin must have missed the facts; the U.S. spent more in 2008 on defense than the next 45 highest spending countries in the world combined. And accounts for 48 percent of the world's total military spending. Or that defense spending consumes over one-third of total government spending.

As shocking as it may be that Congress so flagrantly ignores the facts—it is no surprise. The defense lobby heavily finances some of the most ardent defenders of these weapons programs. Skelton enjoys hefty financial support from nearly every top defense company. One of Lockheed Martin’s top congressional recipients is Rep. Saxby Chambliss—among the most vocal for continuing F-22 production.

LOOKING FORWARD:

Gates’ call for cuts may be a small step to curb immense Pentagon spending, but even this tiny reform may be squashed. A few battles are sure to take place both within and outside Congress this month as the defense bill moves through the Senate. Obama issued a veto threat against the legislation—a first for his presidency—while defense reformers Sens. Levin and McCain affirmed they will “fight on the floor” against the F-22. Of course those in Congress whose priorities fall with big industry rather than reality will be ready to battle as well.

Health Insurance Nightmares Shared By Our Readers

Bernie Horn — Wed, 10 Jun 2009 07:53:28 -0700

In my blog “Why Not Single-Payer,” I asked readers for their thoughts. I received arguments, which I’ll share in a later post. But first I thought I should reprint some of the awful-but-true stories of smart, hardworking people who have been unjustly treated by our nation’s Rube Goldberg-style health insurance system.

One reader explained:

We are self-employed, have been for nearly 30 years. In a family of four, we have three different health insurance policies, due to pre-existing conditions which are mostly benign, and cost little to treat. No surgeries needed, rarely medications, yet when we tried to change companies, due to cost, my husband and son were both turned down….

For my family, this means that we have deductibles which add up to about $20,000 total. God forbid we have any catastrophic events. If I could combine policies, I could keep that deductible to a much lower figure—not easy, but better. The monthly cost of all these policies (and it goes up every few months) at this time is running nearly $900.00. I try to put a bit aside for the HSA, but for the past 8 months, due to the recession, it has been nearly impossible.

I am afraid to get regular checkups myself (needed, because my mother was recently diagnosed with colon cancer), because I am afraid of being dropped by [my insurance company]—I don’t want to trigger any red flags. What a mess.

Here’s another about unreasonable cost:

I'm a progressive Democrat and I'm one of those scared people you wrote about. I've worked for 42 years consecutively and consult part-time. My husband who passed away three years ago worked 43 years consecutively. He received 3 social security checks before he died. I worked and have my own social security. Are you getting the picture? My husband and I did most things right. We lived frugally, but we've always gotten the raw end. Unless we transform to the French medical system, I think millions of people like me will be hurt. I should say further harmed. It's not been fun. I have Medicare now and it's the best medical coverage I've ever had. However I can't pay one penny more for additional coverage or prescriptions.

This is about the frustration of battling insurance companies:

The HMO police are far worse than any government health police in my opinion! I've already dealt with them many times. When my child had had 5 bouts of strep throat in 6 months, and could no longer swallow solid food, the doctor recommended an urgent tonsillectomy. The HMO police said it wasn't medically indicated. I had to pay for the surgery myself. Luckily the doctor’s insurance staffer kept fighting and I eventually got a partial refund. For my own surgery and other more recent health problems, I had to fight for every line item on every hospital bill. The HMO game plan is to wear you out until you give up on the claims.

And this one’s about medical bills:

My sister died at 37 from a metastatic sarcoma (the same thing that got Ted Kennedy, Jr.’s leg). I watched her die, went to her funeral and, in mourning, went back to pack up her apartment and sift through stacks of medical bills, trying to figure out what she owed to whom and how we would get them paid. This doesn’t happen in most industrialized countries and shouldn’t happen here. It's a disgrace.

I guess I should add my own story here:

I changed jobs last year, going from an employee to a consultant. I went to the insurance company that previously covered my family and applied to continue with a private non-group policy. To my astonishment, the insurance company that covered us for 8 years accepted me but denied my wife and both of my children, all for different—and exceptionally unremarkable—“preexisting conditions.” Fortunately I was able to scramble around and get group coverage through my wife’s employer. But I was lucky. I have no idea what someone else in my position could have done if they weren’t lucky enough to have a spouse who qualified for employer-sponsored health insurance.

The first writer is correct: the system is a mess. According to the most recent estimate, 52 million Americans are uninsured, and 25 million more are underinsured. Even Americans with insurance are struggling with soaring health care costs and have to battle with insurance companies to receive the coverage that they are due.

We finally have a realistic chance to fix the system. Both the U.S. House and Senate will likely vote on sweeping health care reform legislation during the last two weeks of July. There will be a series of votes on amendments that will determine whether we get real reform—whether the people or the special interests will win. And there will be a relatively small number of lawmakers—mostly “moderate” Democrats in the Senate—who will cast the key votes for or against.

President Obama famously declared that “nothing can stop the power of millions of voices calling for change.” Please add your voice to his. Visit our friends at Health Care for America Now, go to the “get involved” page, and help us win this desperate, crucial battle.

The writer is a Senior Fellow at Campaign for America’s Future and author of the book, “Framing the Future: How Progressive Values Can Win Elections and Influence People”.

Why Not Single-Payer?

Bernie Horn — Mon, 08 Jun 2009 07:23:29 -0700

The question most frequently asked by progressive activists at last week’s America’s Future Now conference was this: We hear Obama and congressional Democrats talking about a public health insurance option, but why aren’t they talking about a single-payer system like H.R. 676 sponsored by Rep. John Conyers? Why is single-payer “off the table”?

Let’s begin with an obvious truth, stated here by Nobel Prize-winning economist Paul Krugman:

The alternative [to the Democrats’ public-private health care plan] would be single-payer, aka Medicare for all: a payroll tax on everyone, and a government insurance program for everyone. Wouldn’t that be simpler, easier to administer, and more efficient? Yes, it would.

Single-payer is the cheapest and simplest approach. So why aren’t Obama and the Democrats pushing it?

Some say it’s because the Democrats don’t want to offend the for-profit health care industry—that Democrats in Congress have taken too many campaign contributions from insurers. As Marcia Angell, former editor of the New England Journal of Medicine, argues:

Single-payer is simply considered not realistic for a politician. The medical industrial complex just won’t permit it.

Well, it’s certainly true that health care executives, lobbyists, and their hundreds of thousands of employees don’t want to be put out of work. They would all fight their hardest against single-payer. But that’s really not the main reason why Democrats are avoiding such legislation.

Some say it’s because we can’t convince moderate members of Congress to vote for single-payer legislation within the next few months. Darcy Burner, executive director of the Progressive Caucus Foundation, published an important diary on Daily Kos urging progressives to stop “attacking progressives [who are] fighting for a public option” because:

There are not 218 votes for single payer in the House. Single-payer cannot happen in this environment right now, regardless of how passionately its advocates want it.

Darcy, the Progressive Caucus, and everyone on Capitol Hill know this is so. But again, that’s really not the main reason why Democrats focused on a hybrid plan a few years ago.

The main reason is—American voters are scared to death of single-payer.

Even though I’m sitting in a quiet room writing this, I can hear some of you objecting loudly! Friends, we are on the same side. We all know that health care should be recognized as a human right. We all know it is a national shame that more than 50 million Americans are uninsured, and 25 million more are underinsured. We all know that even Americans with insurance are struggling with soaring health care costs, and that insurance and drug companies are putting profits before people. We all know that we need to change the system.

But we progressives are not the ones who need to be convinced. In any great national political debate, there are partisans on our side and partisans against us. To achieve victory, we have to persuade people in the middle—and they don’t know what we know about health care.

Consider three central facts:

Nearly all persuadable voters—those who don’t automatically side with or against us—have health insurance. (In fact, about 94 percent of voters are insured. The uninsured, unfortunately, don’t tend to vote.)
About 3/4ths of insured Americans are satisfied with their health insurance.
When Americans hear about a health care proposal, they immediately think “how is it going to affect me and my family.” That’s their overarching, overwhelming concern.

That means when average American voters consider a new health care policy, their paramount concern is that the policy allows them to keep the health insurance they have. Union members—who usually can be counted on to support progressive policy—are among the most adamant that they be permitted to keep their health insurance. Why? Because unions tend to negotiate better insurance for their members than the rest of us have!

No matter how good a single-payer system might be in theory, these voters are easily turned against any plan that they think might force them off their current health insurance. That’s what the 1994 “Harry and Louise” ads were all about—claiming that the Clinton plan would force Americans to “pick from a few health care plans designed by government bureaucrats.” The Harry and Louise ads thoroughly scared voters—and that’s why they were so effective.

How do we know this? Over the past two years, progressive groups have conducted an unprecedented amount of public opinion research about universal health care. Usually it’s the conservatives who have all the polling data. This time, our side has the upper hand. In fact, I believe progressive advocates have more polling, focus group, and “dial group” research on this than on any issue in history. That research shows that, even if a single-payer proposal starts out with a majority of Americans in support, it won’t hold majority support after the insurance industry clobbers it with ads.

When voters hear this debate, they already have preconceptions and stereotypes in their heads. A proposal that’s anything like single-payer makes them see negative images—long lines, surly bureaucrats, and denial of services. It will take years to “educate” voters that single-payer wouldn’t do that. And we don’t have years—if we fail to pass health care reform this year, the opportunity may not present itself again for a generation.

The bottom line is that in order to get persuadable voters on our side, our health care plan must give everyone the choice to keep their private health insurance if they want to. If voters think we’re giving them the Canadian or British health system, we lose—that’s why Obama talks about creating a “uniquely American solution.” And we also lose if voters think we’re offering “Medicare for All”—the phrase has been thoroughly tested and it just doesn’t work.

That brings us to the idea of a public health insurance option. If you support single-payer, the very best thing you can do is fight like hell for the public option. Just as Americans overwhelmingly want the choice to keep their existing private insurance, they also overwhelmingly want the option to enroll in a government-sponsored insurance plan.

Single-payer describes a financing system. It’s the most efficient system. But the important goal isn’t financing, it’s coverage for every American. A couple of years ago, Paul Krugman concluded that:

In an ideal world, I’d be a single-payer guy. But I see the chance of getting universal care, imperfect but fixable, just a couple of years from now. And I want to grab that chance.

I agree with the Nobel Prize-winner.

DEAR READERS: I want to hear your response about single-payer versus the public health insurance option. Please weigh in by clicking "discuss" and posting a comment, or you can email me at bhorn@ourfuture.org. And if you're for the public option, please sign Gov. Howard Dean's petition at Stand With Dr. Dean.

The writer is a Senior Fellow at Campaign for America’s Future and author of the book, “Framing the Future: How Progressive Values Can Win Elections and Influence People”.

My First Week in Washington DC with SEIU

SEIU Member Voices — Mon, 23 Feb 2009 16:44:50 -0800

Note: Mike Kingsbury is a Grassroots Lobbyist through SEIU's Change That Works campaign. You can read more about the program here. Video included below.

I've always been impressed with our nation's capitol. The huge buildings, sweeping landscapes, and grand stone staircases - it's all so big, it makes me a little disoriented and, gulp, small.

But all those buildings are filled with people. And if there's anything I've learned as a nurse - people are people. We all eat and sleep and want to make the world a better place.

Still, it was good to show up at the SEIU building the first morning and feel like we belonged there - like we had a home base in DC. When you look at us, you know we are all workers: the real people who get the jobs done that make this country what it is. We are "regular" people.

That's why we're here - to be the kind of lobbyists and representatives who can cut through the BS and remind our elected senators and representatives that the decisions they make have consequences for hundreds of millions of "regular" people.

The first congressperson I visited was Betsy Markey, a newly elected representative from my home state of Colorado. About 14 workers from SEIU and the AFL-CIO went to talk with her about the Employee Free Choice Act. She was really happy to have us.

The part I loved, though, was when I talked about trying to organize and some of the struggles we had at our hospital. I shared stories I had heard from a couple other health care workers that'd tried to organize. Here was this very important person in this huge fancy office in WASHINGTON DC - and she was obviously swayed but what I said. When I finished, she was even trying to figure how she could co-sponsor the Employee Free Choice Act.

This week, I passed Betsy Markey in the hallway when I was back on Capitol Hill. She immediately recognized me and ran over to tell me some exciting news - she signed on as a co-sponsor of the Employee Free Choice Act.

These experiences, and the excitement of a new president, inspire me. I see the window we have open for tilting things back towards workers and getting a better health care system rolling. I am here to push as far as we can for working people, and to meet and connect with people who are interested in doing that, too. I think this project will be longer and deeper than we can see now. Being with other people and knowing we aren't alone will be what keeps us all going.

From the nation's capitol,
Mike Kingsbury, RN

Mike Kingsbury is an RN hailing from Denver, Colorado. He is passionate about fighting for better patient care and healthcare reform, and believes the best way to face challenges is together--united--and not alone. Mike has been an active member of the Nurse Alliance of Colorado for many years and also worked with SEIU on the Obama campaign.

Treasury's Bailout Promises Runneth Over

OurFuture.org Staff — Wed, 31 Dec 2008 09:44:07 -0800

ALLOWING AUTO INDUSTRY TO GO UNDER WOULD CREATE “BODY BLOW” TO SLUMPING ECONOMY

Toby Chaudhuri — Wed, 03 Dec 2008 21:00:00 -0800

WASHINGTON – With U.S. automakers facing opposition for an expanded $34 billion rescue package on Capitol Hill today, Campaign for America’s Future co-director Robert Borosage said allowing the auto industry to go under would create a “body blow to the already battered economy.” Borosage noted that there’s a big difference between how lawmakers are responding to the good faith effort from the auto companies and its unions and how they dealt with the banks that caused this crisis in the first place.

STATEMENT OF ROBERT BOROSAGE

The U.S. would be foolish to allow its auto industry to go under, which would be a body blow to an already battered economy. Congress should not make the auto companies the victims of their failure to impose sensible conditions on Wall Street.

Any bridge loan should be conditioned on commitments to moving towards high efficiency cars, limits on executive compensation, and oversight of global operations. U.S. taxpayers should not be subsidizing the transfer of more and more production abroad. An independent board must be set up with authority to enforce those conditions.

Much of the congressional posturing on the auto companies is displaced passion. The auto companies and its unions have come to the Congress with far more detailed plans, including concessions on CEO compensation and wrenching concessions by the unions.

The contrast between that good faith effort for a bridge loan and the ease with which the banks that have caused this crisis have garnered literally trillions of guarantees, loans and investments without any commitments on changing their business plans or on executive compensation is stark.

# # #

**NOTE: To schedule an interview with Borosage, please contact Jennifer Ettinger at jettinger@ourfuture.org or 202-587-1614.**