Tag Archives: Income Inequality

All Evidence Shows #GOPTaxScam Is Horrible. Only Question: Can It Be Stopped?

“No good can come of this plan unless you are wealthy or a corporation.”

By Jon Queally, staff writer for CommonDreams. Published 11-18-2017

Photo: LinkedIn

While informed critics and experts say they are now “running out of adjectives to describe how horrible” the GOP’s House and Senate tax plans are, the evidence continues to mount showing the manner in which the party’s overall approach is a gift to the rich and corporations at the expense of low- and middle-income families, millions of whom who will see their taxes actually go up while key social programs like public education, Medicare, Medicaid, and Social Security will face massive cuts.


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‘There You Have It’: McConnell Says He ‘Misspoke’ When He Promised No Tax Hike on Middle Class

New York Times analysis published Friday found that millions of middle class families would see their taxes rise under GOP plan

By Jake Johnson, staff writer for CommonDreams. Published 11-10-2017

Following the release of a slew of analyses showing that the GOP tax plan would raise taxes on many middle class families—despite repeated promises to the contrary by the Trump administration and Republican lawmakers—Senate Majority Leader Mitch McConnell (R-Ky.) conceded in an interview with the New York Times Friday that he “misspoke” when he declared last week that “nobody in the middle class is going to get a tax increase.”

“I misspoke on that,” McConnell told Times reporter Sheryl Gay Stolberg‏. “You can’t guarantee that absolutely no one sees a tax increase, but what we are doing is targeting levels of income and looking at the average in those levels and the average will be tax relief for the average taxpayer in each of those segments.” Continue reading

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Lindsey Graham Latest Republican to Admit GOP Tax Plan Is All About Keeping ‘Financial Contributions’ of Donors Flowing

“Republicans are literally out here warning each other that their big donors will stop writing checks if they don’t do their bidding.”

By Jake Johnson, staff writer for CommonDreams. Published 11-9-2017

As Common Dreams reported Tuesday, Rep. Chris Collins (R-N.Y.) has made a similar remark, complaining that his donors are pressuring him to pass enormous tax cuts or “don’t ever call me again.” (Photo: Gage Skidmore/flickr/cc)

Sen. Lindsey Graham (R-S.C.) on Thursday became the latest Republican to admit the GOP is trying to ram through massive tax cuts for the rich to satisfy its wealthy donors, telling a journalist that if the party’s tax push fails, “the financial contributions will stop.”

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In ‘Twisted’ Push, Trump Admin Encourages States to Impose Work Requirements for Medicaid

Healthcare experts warn changes would jeopardize healthcare for poorest and most vulnerable Americans

By Jessica Corbett, staff writer for CommonDreams. Published 11-7-2017

Seema Verma, administrator of the Centers for Medicare and Medicaid Services, and U.S. President Donald Trump met in March 2017 in the Oval Office of the White House. (Photo: Shealah Craighead/White House)

In a move called “twisted” and “absolutely awful” by healthcare experts, Centers for Medicare and Medicaid Services (CMS) administrator Seema Verma said Tuesday that the Trump administration will encourage states to force work requirements on people enrolled in Medicaid.

In a speech to the National Association of Medicaid Directors, Verma explained her approach to managing CMS, which emphasizes deregulation and transferring more control to the states. Verma vowed to fast-track approvals of states’ proposals for amending how they implement Medicaid and denounced the Obama administration’s rejection of work requirements for Medicaid recipients, promising to “approve proposals that promote community engagement activities,” which she defined as “working, volunteering, going to school, or obtaining job training.” Continue reading

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GOP ‘Propaganda’ Not Working: Only 13% Believe Tax Plan Will Help Middle Class

New survey also shows that 60 percent believe the Republican plan will “mainly favor” the rich

By Jake Johnson, staff writer for CommonDreams. Published 11-3-2017

Photo: YouTube

For months Republicans and President Donald Trump have worked to convince Americans that massive tax cuts for the top one percent and the largest corporations would somehow primarily benefit the working class, but a new Washington Post/ABC News poll published Friday finds that the public isn’t buying the GOP’s “propaganda.”

Despite House Speaker Paul Ryan’s (R-Wis.) insistence on Thursday that his party’s proposals are geared toward helping “the middle class families in this country who deserve a break,” only 17 percent of Americans believe the GOP tax plan “mainly favors” the middle class, while 60 percent believe their plan would primarily benefit the wealthiest. Continue reading

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Why we need to save the Consumer Financial Protection Bureau

This article was originally published in TheConversation.

Senator Elizabeth Warren has faced battles with Republicans since the CFPB was created. Image via YouTube screen shot.

Republicans in Congress and the White House have been very blunt about their desire to gut the Consumer Financial Protection Bureau – and the threats to it are mounting.

The agency was launched in 2011 in the aftermath of the financial crisis as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The goal was to protect consumers from deceptive or misleading practices in the financial industry.

At the moment, Republicans seem focused on blocking CFPB rules they don’t like, such as one that would have prevented the use of arbitration clauses in financial contracts, making it easier for people to band together to sue banks for wrongdoing. Separately, the Trump administration has been heavily critical of the CFPB, and its director is said to be considering leaving before his term expires next July, which would allow the president to pick his replacement.

So what would you miss if the agency suddenly disappeared or got gutted?

In short, a lot. We base this conclusion on the work the three of us have done in recent decades. One of us (Sovern) has been writing about consumer law for more than 30 years, while the other two of us direct a legal clinic that represents elderly consumers. We’ve seen the worst of what financial companies can do, and we’ve also witnessed how the CFPB has begun to reverse the tide.

John Stumpf, far left, lost his job as CEO of Wells Fargo as a result of the scandal over fraudulent accounts. Reuters/Gary Cameron

Life before CFPB

If you are one of the more than 29 million consumers who have collectively received nearly US$12 billion back from misbehaving financial institutions because of the CFPB’s efforts, you already know its value. But even if you are not, you have probably benefited from the bureau’s existence.

Before Congress created the bureau, there was no federal agency that made consumer financial protection its sole mission. Rather, consumer protection was rolled into the missions of a bunch of different agencies. And, as we saw during the financial crisis, regulators often gave it a back seat.

Congress, for example, gave the Federal Reserve the power to bar unfair and deceptive mortgage lending in 1994. Yet the central bank considered consumer protection a backwater and didn’t use that power until 2008 – too late to prevent the Great Recession. Congress took it away two years later when it passed Dodd-Frank.

The Office of the Comptroller of the Currency regulates banks but was so preoccupied with ensuring lenders were safe that it failed to protect consumers from their predatory subprime mortgages – so much so that it prevented states from doing so too. And now President Trump has put a former bank lawyer in charge of it. The Federal Trade Commission, which is tasked with fighting deceptive business practices, lacked the power to prevent such dangerous lending.

This meant consumer protection on financial matters fell through the cracks.

Wells Fargo’s recent fraud scandal is a case in point. In the early 2000s, Wells Fargo employees began opening fake accounts in clients’ names without permission, leading in some cases to lower credit scores and a variety of fees. The bank ultimately opened millions of fraudulent bank and credit card accounts before the scheme came to an end last year.

But as early as 2010, before the CFPB was set up, regulators at the OCC were increasingly aware of what was happening at Wells Fargo thanks to hundreds of whistleblower complaints. The OCC even confronted the bank, yet failed to take any action despite many red flags, according to an internal audit.

It wasn’t until the Los Angeles city attorney and the CFPB became involved years later that Wells Fargo took forceful action to stop the fraud. The regulators fined Wells Fargo a total of $185 million and forced it to refund fees it had charged customers and hire an independent consultant to review its procedures.

More importantly, they sent a clear message to other financial institutions: Cheat consumers and you will face the consequences.

Consumer Financial Protection Bureau Director Richard Cordray testifies on Capitol Hill in 2013. AP Photo/Manuel Balce Ceneta

Protecting consumers

Since its inception, the bureau has acted repeatedly to stop financial institutions from harming consumers.

It blocked debt collector attorneys from suing consumers based on false information. It discovered systemic problems with consumer credit reports and forced companies to correct errors. It compelled credit card companies to refund illegal fees. It protected borrowers from unlawful student loan servicing practices. It made lenders repay consumers they discriminated against. It recovered money for veterans who complained of abusive financial practices.

When the bureau began publishing consumer complaints on its website, companies that might previously have ignored negative feedback paid attention. Financial institutions have responded to complaints to the CFPB more than 700,000 times, often by providing a remedy to the consumers.

Besides protecting consumers, however, Congress had a second motive in creating the bureau: to help prevent the kind of mortgage lending that helped cause the Great Recession.

To that end, the bureau has adopted rules that help consumers to understand their mortgages – something that often wasn’t possible under the previously misleading mortgage disclosures. It also issued regulations to prevent consumers from taking out mortgages that they couldn’t repay. And after borrowers take out a mortgage, CFPB servicing rules establish the procedures servicers must follow when communicating with borrowers, correcting errors, providing information and dealing with loan modification requests.

Two of us have personal experience with one of the bureau’s new mortgage rules, which powerfully illustrates the value of the CFPB.

In 2014, Alice, a client of our law school clinic, was struggling to pay the mortgage on her home – which she had refinanced a few years earlier – after a stroke forced her into retirement. Our clinic helped her apply for a modification of her loan.

But within weeks, instead of acknowledging Alice’s application, the loan servicer summoned her to court to begin foreclosure proceedings in violation of CFPB servicing rules. Fortunately, our clinic was able to rely on those rules in getting the foreclosure action dismissed. Alice got her loan modified and remains in her home.

Demonstrators tried to draw attention to the subprime mortgage crisis back in early 2008. AP Photo/Matt Rourke

Protecting the vulnerable

This reveals how the bureau is particularly important to protect vulnerable consumers, like the elderly, who are frequently targeted by fraudsters and predatory lenders because of their cognitive and other impairments and because they often have accumulated substantial assets. The CFPB is the only federal agency with an office specifically dedicated to protecting the financial well-being of older adults.

The bureau has brought cases against companies that attempted to take advantage of seniors by, for example, misrepresenting the interest rates on pension advance loans or deceptive advertising. In 2015 alone, consumer complaints to the CFPB brought relief to more than 600 older Americans just through debt collection problems.

The bureau has also worked to prevent financial abuse of the elderly, estimated to cost seniors as much as $36 billion annually. The CFPB has educated financial institutionsnursing facilities and others about recognizing and stopping elder financial abuse and exploitation.

Consumer protection in peril

Given Alice’s ill health, the consequences for her might have been disastrous if she had been thrown out of her home. But now she – and all of us – face the loss of the CFPB’s aid.

The CFPB is under attack from Republican members of Congress who believe more in lifting bank regulations than in protecting consumers. Some members have proposed eliminating the agency altogether.

The House of Representatives has passed a bill that would cripple the CFPB by, for example, taking away the power it used to fine Wells Fargo for opening illegal accounts and concealing its complaint database from public view. In other words, it would force the bureau to sit idly by as financial institutions lie to consumers. Even if the bureau survives, it may be less protective of consumers when its current director, Richard Cordray, leaves. His term expires next summer, and he may step down even sooner. Then we might see a former banker or bank lawyer put in charge, just as has happened at the Treasury Department and comptroller’s office.

Nearly every American has or will have a loan or bank account, a prepaid card, credit card, a credit report or some combination of those, and so has dealings with a financial institution policed by the CFPB. But few of us read the fine print governing these things or can understand it when we do. That gives the companies that write these agreements the ability to draft them to suit their own interests at the expense of consumers.

Similarly, we do not always know when a financial institution takes advantage of us, just as Wells Fargo customers did not always know that it had opened unauthorized accounts that lowered their credit scores.

Consumers need protection from misbehaving companies. If the bureau is eliminated, significantly weakened or starts protecting banks rather than consumers, all consumers will suffer.

This is an updated version of an article originally published on July 10, 2017.

About the Authors:

Disclosure statement

Along with three co-authors, Jeff Sovern received a $29,510 grant from the American Association for Justice Robert L. Habush Endowment and by a grant from the St. John’s University School of Law Hugh L. Carey Center for Dispute Resolution in 2014 to study arbitration. It resulted in an article. Along with Professor Kate Walton, he received a grant from the National Conference of Bankruptcy Judges Endowment for Education to study debt collection, resulting in another article. He is a member of the National Association of Consumer Advocates.

Ann L. Goldweber is affiliated with NACA as a member.

Gina M. Calabrese is affiliated with the National Association of Consumer Advocates, New Yorkers for Responsible Lending, and the Association of the Bar of the City of New York (former chair, Committee on the Civil Court).

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VP Mike Pence Swings into Senate to Deliver ‘Wet-Kiss-to-Wall-Street’ Tie Breaker

“No wonder Americans think the system is rigged against them,” says Senator Elizabeth Warren. “It is.”

By Jon Queally, staff writer for CommonDreams. Published 10-25-2017

Vice President Mike Pence presiding over the Senate on Capitol Hill in Washington, Tuesday, Feb. 7, 2017, during the Senate’s vote on Education Secretary-designate Betsy DeVos. On Tuesday night, Pence returned to the chamber again to a break another tie. This time it was to make sure it’s easier in the future for financial service companies and other Wall Street darlies to make it easier to rip-off consumers. (Photo: Senate Television)

Just in time to do the bidding of the “rich and powerful,” as one Democratic Senator put it, Vice President Mike Pence was summoned to the Senate chamber on Tuesday night where he cast the tie-breaking vote in order to scrap a federal rule designed to protect consumers from so-called “rip-off clauses” used by Wall Street and other corporations.

While in the end it was two Republicans, Sens. Lindsey Graham of South Carolina and John Kennedy of Louisiana, who joined with Democrats and the Senate’s two Independents in voting against the resolution, Pence broke the 50-50 tie in order to scrap the rule. Continue reading

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Trump Revives Notorious GOP Dog Whistle in Call for ‘Welfare Reform’

Like Reagan before him, Trump is deploying the infamous “welfare queen” myth to justify shredding the safety net

Written by Jake Johnson, staff writer for CommonDreams. Published 10-16-2017.

President Trump. Image via youtube.

Rehashing a notorious Republican Party trope that accuses some Americans of cheating safety net programs, President Donald Trump on Monday saidhis administration is looking “very, very strongly” at “welfare reform.”

“People are taking advantage of the system and then other people aren’t receiving what they really need to live and we think it is very unfair to them,” Trump said during a meeting with cabinet officials. “Some people are really taking advantage of our system from that standpoint.”

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The welfare system was last “reformed” during the administration of former President Bill Clinton, and the results were devastating.

According to research by sociologists Kathryn Edin and Luke Shaefer, extreme poverty more than doubled in the two decades following the passage in 1996 of the Personal Responsibility and Work Opportunity Reconciliation Act, which imposed draconian work requirements on welfare recipients and converted federal welfare funds into block grants.

Now, Trump appears to be preparing to shred what is left of the social safety net. And as Clio Chang of Splinter News points out, Trump is deploying the same rhetorical formula as his welfare-slashing predecessors.

“It’s not difficult to decode what Trump’s saying,” Chang notes. “It’s the same tired line that politicians from Ronald Reagan to Bill Clinton have been using for decades: that some (read: mainly black) people are unfairly receiving welfare benefits and siphoning resources away from good, hard-working (read: mainly white) people. Reagan infamously spread the ‘welfare queen’ myth in the 1970s, a dog whistle that asserted black, single mothers were bilking the government’s welfare system.”

While Trump didn’t propose any specific changes to the welfare system on Monday, previous reports—along with his administration’s previous actions—have indicated that crucial safety net programs are squarely in the president’s crosshairs.

In one of his first speeches as president, Trump asserted that the American welfare system is “out of control,” and that people on welfare need to get “back to work”—despite the fact that most welfare recipients already have jobs.

And as Politico reported earlier this month, Trump is “mulling an executive order that would instruct federal agencies to review low-income assistance programs [as] part of a coming effort to make sweeping changes to the country’s welfare system.”

Trump’s Republican allies in the Senate, meanwhile, are gearing up to vote on a budget that would make room for $1.5 trillion in tax cuts and over $5 trillion in non-defense spending cuts—including $470 billion from Medicare and $1 trillion from Medicaid over the next decade.

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Trump Tax “Hoax” Would Blow $5 Trillion Hole In Budget Over Next Decade: Analysis

‘The idea that this plan would help average Americans instead of the wealthy and big corporations has been a hoax all along.’

Mick Mulvaney press conference about President Donald Trump’s budget plan. Screenshot: YouTube

By Jon Queally, staff writer for Common Dreams. Published 9-26-2017

Trumpcare may be dead again (for a while at least) on Tuesday, but Republicans now want to get serious about what they call “tax reform,” but which critics are resolute in saying is just a major push to give the nation’s corporation and wealthiest individuals another massive giveaway they don’t need and certainly don’t deserve.

A day ahead of the Trump administration’s scheduled release of what it says will be a “detailed” tax plan, progressive policy groups are again warning the American people not to be fooled by rhetoric as they highlight estimates showing the likely proposal will cost the government trillions of dollars in revenue over the next decade and lead the way towards massive cuts in key social programs that help insulate low-income and working Americans from an economy already “rigged” in favor of the wealthy and powerful. Continue reading

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‘Most Brazen Corporate Wrongdoer Maneuvers in Memory’: Equifax Forces Potential Victims to Give Up Legal Rights

Sen. Elizabeth Warren (D-Mass.) calls data breach “Exhibit A for why we must stop GOP from reversing the CFPB’s rule protecting your right to join class actions”

By Andrea Germanos, staff writer for Common Dreams. Published 9-8-2017

“It is despicable that Equifax would exploit consumers’ need for identity theft monitoring to avoid accountability for this devastating breach,” said Amanda Werner, arbitration campaign manager at Public Citizen and Americans for Financial Reform. (Photo: GotCredit/flickr/cc)

Not only did Equifax suffer a massive data breach that potentially compromised the personal data of up to 143 million in the U.S. and then wait 6 weeks to inform the public—the credit-reporting company is directing those who want to know if they were a victim of the breach to a service that forces them into a “rip-off clause” that makes them give up their right to file or join class-action lawsuit against the company.

Robert Weissman, president of advocacy group Public Citizen, called it “one of the most brazen corporate wrongdoer maneuvers in memory.” Continue reading

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