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Sanders, Ocasio-Cortez join forces with Loan Shark Prevention Act aimed at consumer-credit abuses

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

Credit card interest rates would be capped at 15% nationwide under a new federal usury law proposed on Thursday by Sen. Bernie Sanders (I-VT) and Rep. Alexandra Ocasio-Cortez (D-NY).

The pair’s Loan Shark Prevention Act draws upon a long tradition, not just in legislative politics but in human moral thought. Most major faith traditions have characterized usurious lending as a grave sin, and the background materials prepared by the populist pair make pains to reference the “special place in the Seventh Circle of Hell” such lenders are accorded in late-medieval depictions of the inferno.

“Today we don’t need the hellfire, the pitchforks, or the rivers of boiling blood, but we do need a national usury law that caps interest rates on credit cards and consumer loans at 15%,” a briefing document on the proposal states.

Average annual interest rates on credit card debt have climbed steadily in modern times and now stand at almost 18%. Many cards charge annual percentage rates as high as 27%, the supporting white-paper notes, adding that the finance and retail firms offering this high-cost credit have become alarmingly reliant on the interest income their uncapped charges generate.

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Stop & Shop workers win pay, benefits concessions after 11-day strike

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

New England grocery store workers have won significant concessions from the Dutch firm that rules their day-to-day lives after an 11-day strike, the United Food and Commercial Workers (UFCW) announced Monday.

More than 30,000 Stop & Shop employees walked off the job on April 11 after negotiators from Netherlands-based multinational food retailer Ahold Delhaize spent weeks insisting the grocer’s frontline workforce would have to absorb higher health care costs and major changes to retirement benefits.

Such collective action has become rare in the private sector, where union membership levels are at historic lows and complex ownership arrangements involving multinational holding companies have attenuated the connection between the people who do a business’ actual work and the well-to-do executives calling the shots.

But the nearly two-week work stoppage drew high-profile support from both local and national leaders. Multiple 2020 presidential primary contenders visited striking workers in person, including Sens. Elizabeth Warren (D-MA) and Amy Klobuchar (D-MN), South Bend Mayor Pete Buttigieg (D), and former Vice President Joe Biden (D). Boston Mayor Marty Walsh (D) and Connecticut Gov. Ned Lamont (D) also showed their faces and shared supportive remarks at rallies with the strikers. Sens. Kamala Harris (D-CA) and Cory Booker (D-NJ) tweeted their support for the cause.

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Elizabeth Warren’s new tax proposal targets Trump’s tax plan and corporate free riders

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

Pitched as the long-awaited salvation of a broken system, President Donald Trump’s overhaul of the corporate tax code appears to have in fact doubled the number of major profitable corporations that find a way to pay zero dollars in income tax.

There were 60 such firms listed on the Fortune 500, a new report from the Institute on Taxation and Economic Policy (ITEP) showed Thursday, with a combined $79 billion in pre-tax revenue and nothing paid to the U.S. government in income tax. The group’s previous research had found an average of 30 profitable zero-tax firms per year in the decade before Trump’s tax law.

But such pay-nothing corporate takers would disappear under a new tax proposal from Sen. Elizabeth Warren (D-MA), announced Thursday in a blog post from her presidential campaign’s web team.

Warren’s proposal breaks from stubborn technocratic complexity, leaving messy, convoluted corporate tax code to one side – in a file marked “fix this later” – in favor of a new, separate, and simple levy on only the highest profits.

The first $100 million a firm nets in a year would be untouched by the new proposal. For every dollar of profit they claim to shareholders beyond that, firms would have to send seven pennies to the government.

As ITEP senior fellow Matt Gardner told ThinkProgress, “We know that in many cases companies are playing games with two sets of books. Requiring them to stick with one story in terms of profitability has a lot of appeal.”

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Fast food workers declare victory after McDonald’s withdraws opposition to minimum wage hikes

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

After six years of strikes, lawsuits, and damning public scrutiny of how the fast food business model relies on taxpayer-subsidized poverty wages, McDonald’s formally withdrew from efforts to block a federal minimum wage hike on Tuesday.

The chain will also stop working against minimum wage increases at state and local levels, its executives told lobbying partners at the National Restaurant Association in a letter.

Workers and organizers involved in the six-year campaign of walk-outs, demonstrations, and litigation, dubbed the “Fight for $15,” immediately celebrated the about-face and pressed their advantage.

“It’s also time the company respect our right to a union. Since day one, we’ve called for $15 and union rights and we’re not going to stop marching, speaking out, and striking until we win both,” Kansas City McDonald’s worker and prominent Fight for $15 leader Terrence Wise said in a statement. “McDonald’s decision to no longer use its power, influence and deep pockets to block minimum wage increases shows the power workers have when we join together, speak out, and go on strike.”

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Wise’s mix of praise and warning reflects some murkiness attending the company’s decision. McDonald’s hasn’t renounced its membership in the “other NRA,” just forsworn corporate support for an ongoing lobbying effort funded in part through its own dues payments to the group. And it’s unclear if the company now welcomes the $15 wage floor workers have consistently sought since 2012, or if it merely accepts some smaller increase is inevitable.

The details of how minimum wage hike policies come together are always tricky, as business organizations fight to carve out certain sizes of business and to slow the phase-in period of a wage hike beyond what workers and progressive economists say is reasonable. The nation’s first $15 hourly wage floor deal was the product of months of vigorous negotiations where “everybody left… a little bit of blood on the floor,” as Seattle Hospitality Group leader Howard Wright told ThinkProgress after that city brokered the first low-wage labor peace of the conflict-oriented era workers like Wise created.

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Super-rich tax cheats can now expect to avoid audits after years of Republican sabotage guts IRS

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

Here is a picture of neglect: Out of every 100 taxpayers who reported more than $1 million in income last year, just three got audited by the Internal Revenue Service (IRS).

The feds were similarly reticent to examine the filings of corporate taxpayers, auditing less than half of the 633 separate business entities that currently hold assets whose value exceeds $20 billion.

These alarming figures are just the continuation of a multi-year downward trend on basic accountability for those taxpayers who are best positioned to pay fancy accountants to skulk through the tax code looking for places to hide their loot from the public.

The decline in the number of audits of high-income individuals is particularly stark, as Syracuse University’s Transactional Records Access Clearinghouse (TRAC) noted in their report on the data, released Thursday. Twice as many million-dollar earners were audited in 2010, at which time the IRS identified $5.1 billion in unpaid taxes from 32,494 audits. Last year’s considerably more torpid effort to provide oversight of the well-to-do pulled in just $1.9 billion, per TRAC.

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Maxine Waters to consumer watchdog workers demoralized by Trump sabotage: You are not alone

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

Rep. Maxine Waters (D-CA) has a message for the federal consumer watchdog workers fighting to protect your wallet from white-collar predators: Don’t let the bastards grind you down.

In an open letter, the prominent progressive darling and long-time leader of the House Financial Services Committee’s Democrats sought to encourage Consumer Financial Protection Bureau (CFPB) employees who’ve seen stark changes under the new management of Republican appointees who would rather their agency not exist.

The morale-boosting missive also served as a reminder to employees that a whistleblower portal can protect them from recriminations should they feel the need to report malign conduct by President Donald Trump’s administration.

“Let me assure you that actions to weaken the Consumer Bureau from within as Director Mulvaney attempted to do will not go unchecked or unnoticed,” Waters wrote to the staffers. After the Democrats took back the House, Waters became chairwoman of the Financial Services Committee.

“If, in the course of your work, you are a witness to waste, fraud, abuse or gross mismanagement, please do not hesitate to alert me and my staff,” she wrote.

 The letter also directed concerned staffers to a confidential whistleblower reporting tool housed at the Financial Services Committee website.

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Zinke used Thanksgiving to sneak a Koch adviser and party loyalist into key public information role

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

After attracting more scandals in 18 months than his four predecessors managed in  16 years, Interior Secretary Ryan Zinke quietly shut the door to further public scrutiny of his office over the Thanksgiving break.

The secretary gave control of incoming Freedom of Information Act (FOIA) requests to former Koch Industries adviser and longtime Zinke consigliere Dan Jorjani in an order dated November 20 but first uncovered Monday afternoon by the Center for Biological Diversity.

Zinke’s move on the Tuesday before Thanksgiving is best understood as a reshuffling of his resources, from attack to defense. Jorjani has worked for the agency since at least May 2017, serving as the chief lawyer putting Zinke and Trump’s agenda into black-letter policy action. He worked with energy industry interests to pen the rollbacks of Obama-era regulatory decisions protecting migratory birds and rejecting a mining proposal at the edge of Minnesota’s Boundary Waters, according to reporting by Pacific Standard’s Jimmy Tobias.

As Zinke’s management of the department drew scandalous scrutiny — like so many other Trump cabinet secretaries, Zinke appears to play fast and loose with ethics rules governing travel costs — Jorjani wrote to a colleague that Interior staffers’ primary responsibility is to protect Zinke from negative press. He will now be the central gatekeeper of the agency’s documents when journalists, watchdogs, and other citizens seek insight into the conduct of their government

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Here’s the pricetag Senate Dems are charging Mitch McConnell to leave DACA out of the budget deal

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

In exchange for leaving out a key program protecting about 800,000 undocumented immigrants, Senate Democrats have pried several billion dollars in funding increases for other domestic policy priorities out of Majority Leader Mitch McConnell (R-KY).

A document circulating among House Democrats and outside ally groups like NDD United labels the total haul of the deal as “a $131 billion increase for non-defense programs.” That figure is calculated based on how spending levels would have automatically dropped if lawmakers failed to reach a deal to waive so-called “sequestration” — the automatic annual cuts to spending that Congress has partially waived each year since 2012.

Compared to that same kind of routine sequestration mitigation budgeting, the deal’s increases to spending on domestic programs are smaller, a combined $57 billion over two years. That is a large number in a vacuum, but small in context of the massive figures involved in providing services to the public. The first year of the deal, for example, adds $26 billion more than simply canceling sequestration would have done  — making the new cap $542 billion total, which is still less than the inflation-adjusted spending Congress approved on such services in 2011. Schumer has in effect won a 5 percent bump to domestic spending caps that leaves the long-suffering cash-starved systems like public housing far behind the funding levels experts say they need.

The document also boasts that the deal between McConnell and Minority Leader Chuck Schumer (D-NY) would flout President Donald Trump’s will. Trump proposed a $54 billion cut to the category for Fiscal Year 2018, meaning the Schumer-McConnell “non-defense funding cap will be $117 billion higher than the level requested by President Trump,” the sheet says.

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Trump Liberates Kansas from the Governor who Wrecked its Economy

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

Kansas won’t have Sam Brownback to kick around anymore.

The second-term Republican governor who wrecked his state’s economy and ruined the education system to give rich Kansans a tax break will quit his job to accept a new posting as Ambassador-At-Large for International Religious Freedom.

Brownback’s nomination marks the second time President Donald Trump has tried to help the onetime presidential hopeful move on from the economic and political crisis he fueled on the High Plains. The first — a cushier gig in Rome working on food policy — fell through a couple months before Brownback’s political situation went from “bad” to “humiliating.”

The recent nomination, announced by the White House on Wednesday, is a political bailout for Brownback. The governor now leapfrogs a shortlist of experts Trump’s team had already prepared in order to run away from his failures that have harmed the quality of human life in his home state.

Brownback’s governorship was defined by what he called a “real, live experiment” in extreme right-wing fiscal policy, a version of Reaganesque trickle-down ideology with the volume knob turned to 11. The state all but eliminated taxes for the wealthy, not just slashing rates but allowing anyone who could afford some creative accounting to pretend to be a small business and start paying zero percent state income tax.

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Betsy DeVos Rolls Back Regulations Holding For-profit Colleges Accountable

Alan Pyke

Alan Pyke Deputy Economic Policy Editor, Think Progress

Taxpayers and striving would-be students alike lost big on Wednesday. Twice.

The federal government will abandon two signature efforts to hold for-profit colleges accountable to the taxpayers who fund them or the Americans who take out loans to attend their classes, Education Secretary Betsy DeVos announced.

DeVos has canceled a pair of new regulations intended to thwart firms that over-promise and under-deliver on higher education credentials marketed primarily to lower-income adults eager to trade low-wage jobs for long-term careers. The move comes two months after DeVos rescinded another Obama-era policy aimed at protecting student loan borrowers from predatory debt servicers.

One of the now-ended federal policies is known as the “gainful employment rule.” It was hammered out over years of research and compromise, and was finalized in 2014. The policy restricted companies’ access to taxpayer-funded student loan dollars if too few of their graduates ultimately find jobs that pay well enough to allow them to repay their loans. While some critics worried the final rule was too lax, the outgoing Obama team announced that some 800 programs nationwide were failing to meet its standards as of early January.

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Union Matters

A Few Hundred Million Good Reasons Not to Care

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

Millions of American families are still reeling from the aftershocks of the financial crash a dozen years ago. But a key architect of that debacle, Countrywide Financial CEO Angelo Mozilo, is feeling no pain — and no remorse either. In the decade before the crash, Mozilo took $650 million out of Countrywide, a hefty chunk of that just before the subprime mortgage scam Countrywide exploited started to implode. Earlier this month, Angelo described Countrywide as a “great company” at a conference appearance and declared subprimes as “not the cause at all” of the nation’s 2007-2008 financial wreckage. Added Mozilo: “Somehow — for some unknown reason — I got blamed.” The former CEO is acknowledging that all the blame did at one point bother him. And now? The famously always tanned Mozilo notes simply: “I don’t care.” 

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Every Worker's Right

Every Worker's Right