Erika Eichelberger

Erika Eichelberger

Reporter

Erika Eichelberger is a reporter in Mother Jones' Washington bureau. She has also written for The NationThe Brooklyn Rail, and TomDispatch. Email her at eeichelberger [at] motherjones [dot] com. 

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Elizabeth Warren Fires Back at Centrist Dems on Social Security

| Mon Dec. 9, 2013 6:00 AM EST

Last week, the president and vice-president of the centrist think-tank Third Way accused Sen. Elizabeth Warren (D-Mass.) of ignoring what they call Social Security's "undebatable solvency crisis." In an interview with Mother Jones, Warren fired back, countering the charge, and elaborating on how Social Security could be expanded.

"If we made no changes at all to Social Security," Warren said, "it would continue to make payments at the current level for about 20 years," meaning there is no immediate crisis facing the program, which assists some 58 million Americans. "Modest adjustments," she added, "will make certain… we could increase benefits for those who need it most."

One way to increase monthly benefits to seniors, Warren said, would be to broaden the program's funding pool. She did not elaborate on how, but one proposal that has been floated in recent years would raise the cap on the level of earnings subject to the Social Security tax. In 2013, for example, Americans paid a Social Security tax of 6.2 percent on wages up to $113,700. Earnings over that amount were not subject to the tax. Several members of Congress have introduced legislation that would lift or eliminate this cap, including Sens. Tom Harkin (D-Iowa), Mark Begich (D-Alaska), and Bernie Sanders (I-Vt.), and Reps. Gwen Moore (D-Wisc.), Pete DeFazio (D-Ore.), and Linda Sanchez (D-Calif.). Harkin's bill would increase Social Security payments by $70 a month for low- and middle-income beneficiaries.

Another way to increase the program's funding base, tax experts say, would be to close loopholes that drain money from Social Security. Each year, for instance, employers misclassify millions of workers as independent contractors instead of employees, according to the IRS. That means employers don't pay their portion of the Social Security tax, and the $2.8 trillion Social Security trust fund is juked out of billions of dollars in revenue annually.

A less obvious, but effective way of directing more money into the Social Security pot, Warren said, would be to increase the federal minimum wage. "Raising the minimum wage means we have workers paying more in to support the Social Security system," she said. Warren backs Obama's call for a minimum wage hike from $7.25 to $9 an hour.

The average monthly Social Security payment is $1,162. Americans have become more dependent on the program in recent years because a growing portion of retirees can no longer rely on pensions through their employer. Twenty years ago, 35 percent of private sector employers offered workers a traditional pension that provided monthly payments to retirees. Today, only 18 percent of employers offer such a plan. About 44 million workers get no retirement help from their employers.

In the interview, Warren emphasized that Third Way, as well as many in Congress and the media, are framing the debate over Social Security in the wrong way. "We should stop having a conversation about cutting Social Security a little bit or a lot," she said.

President Barack Obama, along with lawmakers on both sides of the aisle, have proposed trimming the program to rein in the deficit. Each year, the Social Security Administration increases benefit payments to keep up with inflation. The president and lawmakers have suggested using a new, supposedly more accurate formula to calculate inflation, which would make monthly Social Security payments increase more slowly. In a speech on the Senate floor last month, Warren said this new formula is far from accurate, and that Congress should not balance the budget on the backs of the elderly. (Budget negotiators, who must reach an agreement by mid-January, have since decided against including Social Security cuts in the deal.) Warren's floor speech prompted the Third Way op-ed.

A coalition of liberal advocacy groups, including the Progressive Change Campaign Committee, have also lashed out against Third Way. The organizations called on their members to ask congressional Democrats affiliated with the think tank to disavow the op-ed.

Warren has said time and again that she will not run for president in 2016, but this conflict between the progressive wing and the centrist wing of the Democratic party could serve as a warning for the next Democratic presidential nominee not to stray too far towards the center.

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November's Jobs Report Is Good, But Many Americans Are Still Struggling

| Fri Dec. 6, 2013 2:51 PM EST

The economy added 203,000 jobs in November, according to new numbers released Friday by the Labor Department. The unemployment rate dropped to 7 percent—the lowest level in five years. But many Americans are still struggling.

Employment increased in the private and public sectors, despite the continuing effects of the drastic budget cuts that went into effect in March. Industries including transportation, manufacturing, retail, and leisure and hospitality saw jobs gains, and average hourly earnings increased by 4 cents to $24.15.

The stock market rose on the news, and economists say the new employment numbers make it likely that the Federal Reserve will halt its stimulus efforts early next year. But many Americans are still out of luck.

As my colleague Kevin Drum notes, 90,000 of the 203,000 new jobs created last month were needed to keep pace with population growth. That means net job growth last month was more like 113,000.

And although about 2.1 million unemployed workers found jobs last month, 2.4 million stopped looking. November is the 43rd month in a row in which more job seekers left the labor force than found employment. A total of only 63 percent of American adults are either working or looking for work. That's the second-lowest monthly labor force participation rate in 35 years. (The lowest-ever labor force participation rate was recorded in October, but the data for that month was skewed because of the government shutdown.)

The number of long-term unemployed—those without a job for 27 weeks or more—edged up slightly to 4.1 million. Unemployment amongst African-Americans and Latinos remains much higher than average—at 12.5 percent, and 8.5 percent, respectively. For those without a high school diploma, the unemployment rate is 10.8 percent. It's 14 percent for people under 25.

About a third of employment gains in the private sector last month came in the form of low-wage service jobs in retail, hotels, restaurants, bars and temp agencies. Retail employment added 22,000 jobs last month, and bars and restaurants added 18,000. Low-paying service sector jobs have been the hallmark of the recovery. The growth of these low-wage jobs has given rise to a string of strikes over the past year by workers at Wal-mart, and fast-food joints like Wendy's, McDonald's and Burger King, who are demanding a living wage.

In his speech on the economy on Wednesday, President Barack Obama called on Congress to boost job growth by investing in infrastructure and education; doing away with harmful sequestration cuts; ending incentives for companies to ship jobs overseas; and increasing the minimum wage. "[I]f we refocus our energies on building an economy that grows for everybody," the president said, "then I remain confident that the future still looks brighter than the past."

These Cities Are Trying to Bully Undocumented Immigrants Out of Town

| Thu Dec. 5, 2013 8:31 AM EST

As House Speaker John Boehner continues to block immigration reform, a couple of US cities are pushing laws that would run immigrants out of town.

Last month, Hazleton, Pennsylvania, and Farmers Branch, Texas, asked the Supreme Court to hear cases challenging city ordinances that make it illegal for landlords to rent to undocumented immigrants. Both cities say that the high court should uphold their local laws, which have been struck down in lower courts, because a US appeals court recently upheld similar legislation passed by the town of Fremont, Nebraska.

But immigrant advocates say that the two cities' laws are doomed because they are very similar to Arizona's draconian immigration law, passed in 2010, which also criminalized being an immigrant. The Supreme Court invalidated most of the provisions of Arizona's statute in June 2012 because they interfered with the federal government's authority over immigration. Both the Hazleton and Farmers Branch laws were struck down by lower courts for this precise reason.

"The Supreme Court spoke clearly in the Arizona decision about overriding the federal role of immigration enforcement," says Sam Brooks of the Souther Poverty Law Center's Immigrant Justice Project. Not only are these types of laws likely unconstitutional, he adds, they encourage racial profiling by community members worried about giving leases to the wrong people.

Other towns have proposed laws that would stop landlords from renting to undocumented immigrants. San Bernardino, California, was the first to consider such a law in 2006. It was eventually voted down. Valley Park, Missouri, enacted this type of ordinance in 2006. It was challenged twice but upheld by a federal court in 2008. Scores of other municipalities and states have considered legislation that mimics the city housing ordinances and Arizona's law.

Most of the anti-immigrant statutes can be traced back to one man: Kris Kobach, the secretary of state of Kansas and chief counsel at the conservative Immigration Law Reform Institute (ILRI). Kobach helped craft the laws in Arizona, Hazleton, Farmers Branch, Fremont, and Valley Park, and has defended them in court.

ILRI is the legal arm of the Federation for American Immigration Reform, which was founded by John Tanton, an English-only advocate who has ties to white supremacists.

Elizabeth Warren: Big Banks Should Reveal Their Donations to Influential Think Tanks

| Wed Dec. 4, 2013 6:25 PM EST

On Wednesday, Sen. Elizabeth Warren (D-Mass.) called on the biggest US banks to disclose their donations to think tanks, which influence laws that affect them.

Under current law, banks and other corporations are not required to publicly report their contributions to think tanks. That means that lawmakers who use think tank data and analysis to shape laws and regulations designed to police banks do not know how much bank money influences that research. "A lot of the power of big banks over DC comes from donations to think tanks, who then put out 'studies' favorable to certain ways of doing business," says one Democratic aide. In a letter to the CEOs of the nation's six largest financial institutions—JPMorgan Chase, Wells Fargo, Bank of America, Goldman Sachs, Citigroup, and Morgan Stanley—Warren called on the companies to start voluntarily reporting their donations to these policy shops.

"To prevent future [economic] crises," Warren says in the letter, "policymakers need access to objective, high-quality research, data, and analysis about our consumer and financial markets…[P]rivate think tanks are extremely well-suited to provide this research and analysis, but for it to be valuable, such research and analysis must be truly independent."

Corporations are required to tell the public when they lobby members of Congress or government agencies, Warren says, so "the same transparency should exist for any indirect efforts [banks] make to influence policymaking through financial contributions to think tanks."

Warren's demand for think tank money transparency is yet another approach to curbing too-big-to-fail—the problem of the biggest Wall Street banks being so large and loosely regulated that their failure would endanger the entire financial system. One of the reasons too-big-to-fail is still a problem, five years after the financial crisis, is that banks are good at weakening the laws and regulations meant to rein them in.

One way to do that is through think tanks. The Roosevelt Institute, for example, recently published a report on the successes and failures of the 2010 Dodd-Frank financial reform act. If the institute had received loads of Wall Street cash, it might have been motivated to minimize the failures of the law, and thus further regulation.

Warren's letter comes a few days after the president and vice president of the centrist think tank Third Way wrote a Wall Street Journal op-ed warning Democrats against following Warren over a "populist cliff."  The Nation reported this week that Third Way employs a Washington consulting firm that represents financial institutions including MasterCard and Deutsche Bank.

The letter also comes on the heels of a recent defeat for corporate contribution transparency advocates. The Securities and Exchange Commission, a Wall Street regulator, considered forcing corporations to disclose the money they spend on campaigns and elections. But just this week, the agency announced it had dropped that issue from its 2014 priority list.

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