The Obfuscation Report

Jobless Angry at Possibility of No Benefits

By MICHAEL LUO

As governors in nine states, mostly in the South, consider rejecting millions of dollars in federal stimulus money for increased unemployment insurance, there is growing anger among the ranks of the jobless in those states that they could be left out of a significant government benefit.

The stimulus bill recently passed by Congress includes incentives to states to expand benefits to many more jobless people, including part-time workers and those who have cycled in and out of the work force, who are not covered in many states.

The Republican governors of Alabama, Georgia, Louisiana, Mississippi, South Carolina and Texas, along with Alaska and Idaho, have raised protests, saying that expansion could eventually require them to raise taxes.

On Wednesday, Gov. Phil Bredesen of Tennessee became the first Democratic governor to express reservations on the issue.

For people like Henry Kight, 59, of Austin, Tex., the possibility that the money might be turned down is a deeply personal issue.

Mr. Kight, who worked for more than three decades as an engineering technician, discovered in September that because of complex state rules, he was not eligible for unemployment insurance after losing a job at a major electronics manufacturer he had landed at the beginning of the year.

Unable to draw jobless benefits, he and his wife have taken on thousands of dollars in credit-card debt to help make ends meet.

It is precisely these kind of regulations, involving such matters as the length of a person’s work history or reason for leaving a job, that the federal government is trying to get the states to change. Such a move could extend benefits to an estimated half-million more people, according to the National Employment Law Project, a liberal group in New York that supports the changes.

Mr. Kight and other unemployed workers said they were incensed to learn they were living in one of a handful of states — many of them among the poorest in the nation — that might not provide the expanded benefits.

“It just seems unreasonable,” Mr. Kight said, “that when people probably need the help the most, that because of partisan activity, or partisan feelings, against the current new administration, that Perry is willing to sacrifice the lives of so many Texans that have been out of work in the last year.”

He was referring to Gov. Rick Perry of Texas, who has said he may decline the extra money rather than change state policy.

“I remain opposed to using these funds to expand existing government programs, burdening the state with ongoing expenditures long after the funding has dried up,” Mr. Perry wrote in a letter to Mr. Obama last week.

The governors contend that once the federal money ran out, they would have to continue providing the new benefits, which they say would force them to raise taxes on businesses. The federal money will end in two or three years in some states, or much later in others, depending on the size of the state allocation.

Proponents say that nothing would prevent states from changing the laws back at that time.

The anger at the governors’ positions goes beyond just the unemployed workers who could directly benefit from the changes. Because eligibility rules for unemployment insurance are complicated and vary by state, many unemployed people do not even know whether they would be affected.

There is also confusion over what parts of the stimulus money are in danger. The governors have mostly said they do not object to the stimulus bill’s $25 per week increase in unemployment benefits, or a new federal extension of benefits.

As a result, many laid-off workers across the South have been fretting over precisely what they might lose out on, even as they express astonishment that they might not receive the help that jobless people in other states will get.

“I don’t understand the whole thing,” said Kelley Joyce, 43, of Myrtle Beach, S.C., about indications from Gov. Mark Sanford that he may reject some of the stimulus financing in that state. “Apparently because he has money and he doesn’t have to worry about everybody else who doesn’t have money.”

South Carolina, which has the nation’s third-highest unemployment rate at 9.5 percent, ruled Ms. Joyce was ineligible for benefits for the same reason as Mr. Kight after she lost her job as a marketing assistant in November.

The first third of the $7 billion available to states to expand unemployment benefits is contingent on the states’ changing eligibility rules in such a way that Mr. Kight and Ms. Joyce would receive benefits. It requires states to consider an “alternative base period” when determining someone’s eligibility.

Currently, when considering a person’s work history, most states do not include his wages in the current or preceding quarter. Instead, they look to see what the person earned in the four quarters before that, which can often hurt low-wage workers, women and others just entering or returning to the work force.

In Mr. Kight’s case, he was unemployed for the second half of 2007, after losing an earlier job he had at a different electronics manufacturer in a downsizing. As a result, when he applied for unemployment benefits, he did not have enough immediate work history to qualify.

“I have worked for so many years, a total of probably 30 years, contributing to the support system that helps people when they get in a tough spot like I’m in,” Mr. Kight said. “I haven’t needed it too much in the past, but I sure could use it right now.”

About 40 percent of applicants who are now disqualified from receiving benefits because they do not earn enough would qualify if states offered an alternative base period, according to the National Employment Law Project.

To be eligible for the other two-thirds of the money set aside for unemployment benefits, states would have to provide benefits to at least two of these four groups of unemployed people: those only available to work part-time; workers who left their jobs for a compelling family reason, like a spouse moving to take another job, to take care of a sick child, or in cases of domestic violence; workers with dependent children seeking additional benefits; and workers who need additional benefits to last them through re-training.

On Tuesday, Erica Greer, 32, and her mother, Candace Foss, 59, who lost her job as a data management specialist at Home Depot in late January, went to the State Capitol in downtown Atlanta from Kennesaw, Ga., a suburb where they live, to deliver a message to Gov. Sonny Perdue not to reject any of the stimulus money.

Mr. Perdue has said he fears the long-term consequences of accepting the money.

Ms. Foss got a severance package from Home Depot, so she has not yet applied for unemployment benefits. It appears she would be eligible for benefits, but she and her daughter said they wanted to stand up for unemployed Georgians and fight for their benefits. They wound up speaking to an aide to the governor for about 10 minutes and submitted a letter to Mr. Perdue.

“I don’t think he truly understands the plight of his citizens,” Ms. Foss said. “He’s surrounded by people with good jobs, who make good salaries. He’s not surrounded by people like me.”

Robbie Brown contributed reporting.

The Credit Card Debt Crisis: The Next Economic Domino

by Arrianna Huffington @HuffPo

Hot on the heels of the banking crisis, the employment crisis, and the mortgage/foreclosure crisis, the country is on the verge of experiencing a credit card crisis.

According to the Federal Reserve, the total outstanding credit card debt carried by Americans reached a record $951 billion in 2008 -- a number that will only climb higher as more and more people reach for the plastic to make ends meet. What's more, roughly a third of that is debt held by risky borrowers with low credit ratings.

Credit card defaults are on the rise and are expected to hit 10 percent this year. This will obviously drive many banks closer to failing their stress tests -- but it will have an even greater impact on the lives of people who find themselves sinking deeper and deeper into debt.

It's a particularly vicious economic circle: every day, Americans, faced with layoffs and tough economic times, are forced to use their credit cards to pay for essentials like food, housing, and medical care -- the costs of which continue to escalate. But as their debt rises, they find it harder to keep up with their payments. When they don't, banks, trying to offset losses in other areas, then turn around and hike interest rates and impose all manner of fees and penalties... all of which makes it even less likely consumers will be able to pay off their mounting debts.

And that's not the end of the economic downward spiral. As more and more Americans default on their credit card debt, banks will find themselves faced with a sickening instant replay of the toxic securities meltdown from the mortgage crisis. In another example of Wall Street "creativity," credit card debt is routinely bundled together into "credit-card receivables" and sold to investors -- often pension funds and hedge funds. Securities backed by credit card debt is a $365 billion market. This market motivated credit card companies to offer cards to risky borrowers and to allow greater and greater amounts of debt.

As these borrowers continue to default, banks and the investors who bought their packaged debt will take a serious hit. And how are the credit card companies trying to offset the rise in bad debts? By raising rates on the rest of their customers -- making it likely that more of them will end up defaulting, causing even more losses for the banks. And round and round and round we go.

And such is the paradoxical nature of the meltdown that Americans keep being encouraged to go back to spending in order to get the economy rolling again. But the problem is, more and more Americans are broke. So the only way they can spend is to charge it, running up balances on credit cards that are structured in a way that makes it harder and harder to pay them off.

Getting dizzy yet?

For years, credit card companies have been fattening their bottom lines with an ever-widening array of fees. Late fees, cash-advance fees, over-the-limit fees. In 2007, lenders collected over $18 billion in penalties and fees. JPMorgan Chase, the nation's top credit card lender, recently began charging many of its customers $10 a month for carrying a large balance for too long a time -- that's on top of the interest they are already collecting on those balances.

And interest rates are escalating. Earlier this month, Citibank warned customers that if they miss a single payment, they could see their interest go up to 29.99 percent (so nice of them to shave off the .01 to keep it from being 30 percent, isn't it?). The company also recently raised rates by 3 percent on millions of non-payment-missing customers. Citibank is not alone: Capital One raised its standard rate on good customers by up to 6 points, and American Express raised rates by 2-3 percent on the majority of its customers.

Sen. Chris Dodd, chairman of the Senate Banking Committee, accuses the banks of "gouging," saying, "the list of questionable actions credit card companies are engaged in is lengthy and disturbing."

Perhaps he should send the bankers a Bible bookmarked to Deuteronomy 23:19: "thou shalt not lend upon usury to thy brother." Indeed, Sen. Bernie Sanders told me last week that he is working on "anti-usury" legislation.

For their part, the bankers have tried to cloak their behavior with corporatespeak. A Citibank spokesman called the rate hikes the result of "severe funding dislocation," and said, "Citi is repricing a group of customers in our Citi-branded consumer credit card business in the U.S. to appropriately manage these risks." An AmEx spokeswoman chalked up its rate hike to "the cost of doing business."

Making such pronouncements particularly galling is the fact that many of the banks summarily raising interest rates and piling on the penalties have received billions in bailout money. Our money. We gave Citi $45 billion, Bank of America $45 billion, JPMorgan $25 billion, AmEx $3.4 billion, Capital One $3.6 billion, and Discover $1.2 billion. In fact, American Express, Capital One, and Discover all converted to bank holding companies to make themselves eligible for bailout funds.

Yet that money seems to have been delivered with no strings attached. Banks cash their bailout checks, then turn around and gouge their most vulnerable customers. Priceless.

One of the ironies of the credit card crisis is that the financial industry laid the foundation for much of the trouble we are seeing with its full-throated -- and deep-pocketed -- support of the cynically named Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, a truly loathsome piece of legislation that opened the door to many of the banking abuses we are witnessing. It made it much tougher for Americans to file for bankruptcy -- even the millions of hardworking Americans whose bankruptcy is the result of a serious illness (fully half of all bankruptcies are the result of crushing medical expenses). It also did nothing to rein in the kinds of lending abuses that frequently turn manageable debt into unmanageable personal financial catastrophes.

The financial industry spent $100 million lobbying to get the bill passed -- and millions more in campaign contributions. The result was a sweetheart law for the financial industry -- with 18 Senate Democrats voting for it.

And the banking lobbyists are at it again.

There are currently several bills in Congress designed to roll back some of the worst provisions of the 2005 legislation. In the Senate, Chris Dodd has introduced The Credit Card Accountability, Responsibility and Disclosure Act ("the Credit CARD Act"). In the House, there is Rep. Carolyn Maloney's Credit Cardholders' Bill of Rights.

The banking industry is pushing back hard. But wait, you might ask, aren't the banks broke? So where'd they get the money to lobby against credit card reform?

From us. There may not be much transparency about the hundreds of billions of taxpayer dollars doled out through the TARP program, but we know where at least some of the money has gone: into making sure that none of the Bankers Gone Wild behavior that led to the current disaster is curtailed.

In December, the Fed approved new rules that will, among other things, limit arbitrary rate increases on credit cards, cap some fees, and require the credit card companies to more clearly disclose the often confusing -- if not downright misleading -- terms customers are agreeing to. But these rules won't go into effect until July 2010.

Why would the Fed make rules that won't go into effect for a year and a half? We can't afford to wait until then.

Congress needs to tell the bankers that their Beltway credit has been denied and pass laws reforming the credit card mess -- before the credit card blaze turns into another economic conflagration.

Obama Continues Bush Policy Of Pretending The U.S. Bill of Rights Only Applies To U.S. Citizens.

Obama's Refusal To Reverse Bush Policy In Afghanistan Angers Human Rights Groups
The Independent | By Stephen Foley | February 22, 2009 01:41 PM

Less than a month after signing an executive order to close the Guantanamo Bay prison camp, President Barack Obama has quietly agreed to keep denying the right to trial to hundreds more terror suspects held at a makeshift camp in Afghanistan that human rights lawyers have dubbed "Obama's Guantanamo".

In a single-sentence answer filed with a Washington court, the administration dashed hopes that it would immediately rip up Bush-era policies that have kept more than 600 prisoners in legal limbo and in rudimentary conditions at the Bagram air base, north of Kabul.

Now, human rights groups say they are becoming increasingly concerned that the use of extra-judicial methods in Afghanistan could be extended rather than curtailed under the new US administration. The air base is about to undergo a $60m (£42m) expansion that will double its size, meaning it can house five times as many prisoners as remain at Guantanamo.

Apart from staff at the International Red Cross, human rights groups and journalists have been barred from Bagram, where former prisoners say they were tortured by being shackled to the ceiling of isolation cells and deprived of sleep.

The base became notorious when two Afghan inmates died after the use of such techniques in 2002, and although treatment and conditions have been improved since then, the Red Cross issued a formal complaint to the US government in 2007 about harsh treatment of some prisoners held in isolation for months.

While the majority of the estimated 600 prisoners are believed to be Afghan, an unknown number - perhaps several dozen - have been picked up from other countries.

One of the detainees who passed through the Afghan prison was Binyam Mohamed, the British resident who is expected to return to the UK this week after his release from Guantanamo Bay. Mr Mohamed's lawyer, Clive Stafford Smith, head of a legal charity called Reprieve, called President Obama's strategy "the Bagram bait and switch", where the administration was trumpeting the closure of a camp housing 242 prisoners, while scaling up the Bagram base to house 1,100 more.

"Guantanamo Bay was a diversionary tactic in the 'War on Terror'," said the lawyer. "Totting up the prisoners around the world - held by the US in Iraq, Afghanistan, Djibouti, the prison ships and Diego Garcia, or held by US proxies in Jordan, Egypt and Morocco - the numbers dwarf Guantanamo. There are still perhaps as many as 18,000 people in legal black holes. Mr Obama should perhaps be offered more than a month to get the American house in order. However, this early sally from the administration underlines another message: it is far too early for human rights advocates to stand on the USS Abraham Lincoln and announce, 'Mission Accomplished'."

Four non-Afghan detainees at Bagram are fighting a legal case in Washington to be given the same access to the US court system that was granted to the inmates of Guantanamo Bay by a controversial Supreme Court decision last year. The Bush administration was fighting their claim.

Two days into his presidency, Mr Obama promised to shut Guantanamo within a year in an effort to restore America's moral standing in the world and to prosecute the struggle against terrorism "in a manner that is consistent with our values and our ideals". But on the same day, the judge in the Bagram case said that the order "indicated significant changes to the government's approach to the detention, and review of detention, of individuals currently held at Guantanamo Bay" and that "a different approach could impact the court's analysis of certain issues central to the resolution" of the Bagram cases as well. Judge John Bates asked the new administration if it wanted to "refine" its stance.

The response, filed by the Department of Justice late on Friday, came as a crushing blow to human rights campaigners. "Having considered the matter, the government adheres to its previously articulated position," it said.

Tina Foster, executive director of the International Justice Network, the New York human rights organisation representing the detainees, warned last night that "by leaving Bagram open, the administration turns the closure of Guantanamo into essentially a hollow and symbolic gesture".

She said: "Without reconsidering the underlying policy, which has led to the abuses at Abu Ghraib and the indefinite detention of hundreds of people all these years, then we are simply returning to the status quo. The exact same thing that had the world up in arms has been going on at Bagram since even before Guantanamo.

"People have been tortured to the point that they have died; it is a rallying cry for those who oppose the US actions in Afghanistan; it is not strategic for the US; and, more importantly, holding people indefinitely, regardless of who they are and regardless of the facts, is completely inconsistent with everything we stand for as a country."

The Department of Justice would only say that the legal briefs in the Washington case "speak for themselves". It says Bagram is a special case because, unlike Guantanamo, it is sited within a theatre of war.

Mr Obama has pushed out the wider questions about the US policy on detaining terror suspects and supporters of the Taliban in Afghanistan until the summer, ordering a review that will take six months to complete.

The administration is weighing the likely increase in prisoners from an expanded fight against the Taliban in Afghanistan and Pakistan, against the international perception that it is embedding extra-judicial detention into its policies for years to come.

Be a hero on your own time

Doug Smith
Updated: 2/19/2009

MCDONALD'S WON'T HELP: Nigel Haskett's claim.