Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Detroit News, the Guardian, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

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Top GOPer Disavows Wall St. Bill

| Wed Mar. 31, 2010 10:41 AM EDT

Sen. Bob Corker (R-TN), a top GOP negotiator in the Senate's financial reform battle, told the Wall Street Journal that he "absolutely cannot support" the Senate's Wall Street overhaul, a thousand-plus-page bill largely crafted by Sen. Chris Dodd (D-CT). Dodd is the chairman of the banking committee, which recently passed a financial reform bill on a 13-10 party-line vote; Corker is a member of the committee as well, who'd closely negotiated with Dodd for weeks on the bill. "I couldn't support the bill in its current form," Corker told the Journal. "I am absolutely not throwing in the towel. I have no plans to support the current legislation. I hope we'll get back to the negotiating table."

Corker had more recently made headlines as a potential defector from the Republican camp to side with Democrats on financial reform. (The Huffington Post exclaimed, in a blaring headline, that Corker was "going rogue.") In remarks at the US Chamber of Commerce last week, Corker criticized the GOP's decision to not negotiate financial reform in committee, instead saving the inevitable battle for the Senate floor. The Tennessee senator called this decision "a major strategic error" by Republicans.

Now, however, top GOP brass appear to have reined Corker back in with a party that largely opposes the financial reform bill as it stands. The Republicans have clashed with Democrats on a number of issues in the bill, including an independent consumer protection agency, the creation of a council to guard against too-big-to-fail, and greater shareholder input on executive compensation. The potential loss of Corker could be a blow to Democrats, who need at least one Republican vote to pass the bill. The Senate plans to begin negotiations on financial reform when they return from recess in mid-April.

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Obama Sells Out College's Working Class

| Wed Mar. 31, 2010 10:15 AM EDT

President Obama took a huge step yesterday toward expanding access to higher education. By cutting out private student loan lenders, he's saving a projected $61 billion, which will go toward beefing up the Pell Grant program; annual loan payments are now capped at 10 percent of income, so students aren't deterred from enrolling by the specter of crippling debt; and a host of other funding programs will now support minority-oriented institutions and other colleges. Yet conspicuously absent from HR 4872, the Health Care and Education Affordability Reconciliation Act, was much-touted effort called the American Graduation Initiative (AGI).

The AGI was the most ambitious presidential plan since Truman to bolster community colleges, the nearly 1,200 schools that cater to students who can't afford a traditional university, want to work and go to school at the same time, want to use community colleges as a stepping stone to a four-year school, or want job re-training when looking to change careers. (Full disclosure: My dad's an English professor at a community college.) These colleges enroll anywhere from 35 to 50 percent of undergraduates nationwide. They enroll more low-income and minority students than four-year schools. 95 percent of community colleges are open admission—in other words, everyone's welcome here.

The AGI recognized the role of community colleges—increasingly so in light of the economic recession, when fewer people can afford skyrocketing tuition costs. Most importantly, the initiative proposed spending $12 billion over ten years to increase community college graduates by 5 million over the next decade.

But when higher ed reform got grafted on the health care bill, and a melee ensued to pass that package, the AGI somehow died. Apparently the community college "lobby" couldn't keep the AGI in the reconciliation bill signed by Obama. What these two-year schools did get out of the final bill was $2 billion to fund existing programs, mostly for disabled workers—nothing to scoff at, but a far cry from what Obama envisioned last summer, when he unveiled the AGI to much fanfare. "I know the colleges are grateful for the money that's in there, but it's for the status quo," Sara Goldrick-Rab, an education professor at the University of Wisconsin, told NPR. "The money for focusing on college completion might have been transformative."

Losing the AGI is, in short, a major loss for working class students. The initiative specifically targeted them and sought to offer the upward mobility of a college degree to millions of new students. So much for that idea. And considering how much political capital Obama expended to pass health care and student loan reform, it's unlikely we'll see future transformative initiatives for community colleges anytime soon. In the meantime, community colleges are increasingly cutting back on class offerings and are unable to hire enough qualified instructors—full time or part time—to meet a growing demand. Thanks to Obama's new bill, access to four-year colleges—a nice spot if you can afford it—may be increasing, but working class students will find themselves again shut out.

Indoor Tanning Salon Tax Racist?

| Tue Mar. 30, 2010 11:46 AM EDT

Filling in for Glenn Beck on his radio show, conservative radio host Doc Thompson recently made the stunningly outrageous claim that a tax on indoor tanning salons, as included in the health care reform bill, is racist. Such a tax, Thompson claimed, discriminates against "all light-skinned Americans" because only white-skinned Americans use tanning salons. Never mind the deadly effect tanning beds and the like have on your skin and health, nor the fact that the tax would generate $2.7 billion over ten years to help pay for health care. No, that couldn't have anything to do with why the tax was included in the health care bill.

Here's an excerpt of Thompson from the Beck show, via Think Progress:

Racism has been dropped at my front door and the front door of all lighter-skinned Americans. The health care bill the president just singed into law includes a 10 percent tax on all indoor tanning sessions starting July 1st, and I say, who uses tanning? Is it dark-skinned people? I don’t think so. I would guess that most tanning sessions are from light-skinned Americans. Why would the President of the United Stats of America—a man who says he understands racism, a man who has been confronted with racism—why would he sign such a racist law? Why would he agree to do that? Well now I feel the pain of racism.

Which goes to show: Give a man a mic and he'll say pretty much anything. To be fair, it's one thing for the tanning salon lobby to cry foul and rail against the new tax. It's quite another to claim the tax is "racist," adding to the plight of "light-skinned Americans" around the country. Then again, crazier ideas have seen the light of day on Glenn Beck's radio show.

The Wall St. Lobby's Flip-flop

| Tue Mar. 30, 2010 10:01 AM EDT

If you need any more reason to distrust Wall Street's lobbying armada, which has spent millions to undercut a new financial reform bill, then look no further than an op-ed from Elizabeth Warren, the staunch consumer advocate and bailout watchdog, published today. In it, Warren highlights the utter hypocrisy of the banking lobby's aim to neuter, if not outright kill, a new, independent consumer financial protection agency.

Among the banking lobby's top talking points for fighting this consumer agency is that it would separate what's called "safety and soundness" regulation (your run-of-the-mill bank oversight, basically) and consumer protection measures, like cracking down on predatory lenders, usurious interest rates, and unfair credit card penalties. For instance, Scott Talbott, a top lobbyist for the Financial Services Roundtable, a powerful finance trade organization, told the New York Times that his organization "believe[s] that consumer protection and bank supervision should be housed under the same roof."

But as Warren points out, the position of Big Finance's biggest advocacy group, the American Bankers Association, was the exact opposite just a few years ago. In 2006, the FDIC, Federal Reserve, and other government regulators were considering allowing bank regulators to keep an eye on subprime mortgages, those tricky—and toxic—products that would help topple the economy. The ABA, when it caught wind of this potential move, sent a letter to the FDIC arguing against merging bank oversight and consumer protection, saying this "marriage of inconvenience between supervision and consumer protection appears to blur long-established jurisdictional lines." The association recommended that "the safety and soundness provisions relating to underwriting and portfolio management be separated from the consumer protection provisions." (The ABA, in a sign of true prescience, also said subprime mortgages weren't "inherently riskier" than plain vanilla mortgages and that letting bank regulators oversee subprime loans "overstates the risk" of them.)

This, Warren concludes, shows that Wall Street's "lobbyists’ consistent theme is unmistakable: they oppose meaningful rules in the consumer credit market." She goes to write:

The ABA’s premise that the country can’t have both meaningful consumer protection and safety and soundness is wrong. In fact, its defense against an independent consumer agency boils down to this: if banks can’t trick and trap people with fine print and legalese, they won’t be able to turn a profit.

When other industries have argued that tricking their customers is an essential part of their profit model, they haven’t gotten far. For example, it might be profitable in the short run to substitute baking soda for antibiotics, but basic safety regulations prevent such moves—and the pharmaceutical industry still manages to do just fine. In fact, the industry flourishes, bringing better, cheaper products to customers.

Similarly, the consumer agency now before the Senate is designed to cut out tricks and traps pricing, fine print that no one can read, and sharp practices that strip billions of dollars from consumers...

In the weeks ahead, the Senate does not need to decide between safety and soundness and consumer protection.

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