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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4 Ways the Healthcare.gov Hearing Was Not About Healthcare.gov

| Thu Oct. 24, 2013 5:36 PM EDT

On Thursday morning, Republicans on the House energy and commerce committee held a hearing about what is wrong with the federal health insurance exchange site, who is responsible, and what needs to be done to fix it. In attendance was Cheryl Campbell, the senior vice president at CGI Federal, the main contractor building the website, as well as three other top executives from smaller contractors working on the federal insurance site. Although members of Congress managed to pry some key information out of the witnesses—the contractors, predictably enough, pinned blame on the Department of Health and Human Services (HHS) for failing to adequately test the whole system early enough—a good part of the hearing was devoted to partisan bickering, sometimes only tangentially related to the problem-plagued website.

Here are four topics addressed in Thursday's hearing that had nothing to do with fixing healthcare.gov:

1. Delay Obamacare, because why not: The GOP failed in its effort to delay Obamacare by shutting down the government and threatening default. But Republicans are not dissuaded. Some, like Sen. Marco Rubio, (R-Florida), have suggested delaying the individual mandate for six months because of the problems with the website. Rep. Joe Pitts (R-Penn.) and other Republicans at Thursday's hearing echoed this proposal. (The White House already announced Wednesday night that it will compensate for the delays caused by the website by giving Americans up to six extra weeks to sign up for insurance.)

2. Obamacare Could Steal Your Data: Both Rep. Marsha Blackburn (R-Tenn.) and Rep. Joe Barton (R-Tex.) used the hearing to heap another healthy dose of Obamacare fear-mongering on Americans. Barton said that Obamacare violates the Health Insurance Portability and Accountability Act (HIPAA), the law that protects Americans' personal medical information, because Healthcare.gov requires applicants to enter personal information into site. "Do you think that should be a requirement to sign up for Obamacare?" Barton demanded of the contractors. "You know [that's] not HIPAA compliant… It's a direct contradiction of privacy and you know it!"

Except that the health insurance website only asks for very basic personal data, not medical information. "There is no health information in the process," Rep. Frank Pallone (D-N.J.) snapped in response. "You're asked about your address, your date of birth. You are not asked health information. So why are we going down this path? Because you are trying to scare people so they don’t apply, and so therefore the legislation gets delayed, or the Affordable Care Act gets defunded, or it’s repealed. That’s all it is, hoping people won’t apply."

Blackburn raised the HIPAA issue, too, asking if all the contractors had been trained in HIPPA compliance, if they have physical access to HHS's databases, and how many separate servers were being used to store Americans' medical information.

3. Remember the Government Shutdown?:  Toward the end of the four-and-a half hour hearing, Rep. David McKinley (R-W.Va.), expressed annoyance that he had not yet heard an apology from any of the contractors for screwing up uninsured Americans' ability to finally get health coverage. "I've not heard the word I'm sorry," he said. "I know men have a hard time saying that, but the whole panel." Rep. Henry Waxman (D-Calif.), the top Democrat on the committee, jumped at the opportunity to skewer Republicans over the government shutdown. "Can we get an apology for shutting down the government because people didn’t like the health care bill?" he asked.

4. What About Climate Change?: Campbell of CGI and the representatives for the other website contractors divulged as little information as they possibly could about the missteps and confusions that contributed to a barely functioning health exchange website. Committee members asked how many total applicants had registered so far through the site, what kind of hacking protections each contractor uses, and who exactly at HHS was in charge of ensuring that the website was adequately tested before the launch date. Each time Republicans received an "I don't know" from the contractors, they demanded the information be furnished by "9 a.m. tomorrow."

In response, Waxman noted that he and fellow energy and commerce committee member Rep. Bobby Rush (D-Ill.) have asked Republicans on the committee numerous times to hold climate change hearings, and said it would be nice if GOP committee members would respond to their requests by "9 a.m. tomorrow," too. In the last Congress, Waxman and Rush sent 21 letters to Chairmen Fred Upton (R-Mich.) and Ed Whitfield (R-Ky.) requesting that the committee hold hearings on climate change, and received no response. In the current Congress, Waxman and Rush have sent seven letters requesting hearings on this topic, and the committee has held one hearing.

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Judicial Races Now Look Like Regular Old Political Campaigns. Thanks, Citizens United!

| Thu Oct. 24, 2013 2:09 PM EDT

Justice is blind, except when it's backed by millions in political spending. In the wake of Citizens United, the Supreme Court case allowing unlimited spending on elections by outside groups, judicial races in the thirty-eight states that conduct elections for their high courts have become indistinguishable from ordinary political campaigns, according to a new report released Thursday by the Brennan Center for Justice and Justice at Stake, which analyzed the 2011-2012 judicial election cycle. Check it out:

The last election cycle saw record spending: Special interest groups and political parties spent an unprecedented $24.1 million on state court races in the last election period, a jump of more than $11 million since 2007-08. The most expensive high court elections were in the four states where courts most closely divided by either judicial philosophy or political party: Michigan, Wisconsin, Florida, and North Carolina.

Top funders were mostly conservative: Business and conservative groups accounted for 7 of the top 10 spenders in 2011–2012.

Special interest group donations escalated: The independent groups empowered by Citizens United spent a record $15.4 million to persuade voters in high court races in the last election period, accounting for more than 27 percent of total spending on high court races. The previous record was $11.8 million in 2003–2004.

Koch-type national groups invaded judicial races: Big spenders in judicial races in the last election cycle included the Koch brothers' group Americans for Prosperity in Florida and North Carolina, the NRA-affiliated group Law Enforcement Alliance of America in Mississippi, the Republican State Leadership Committee in North Carolina, and the progressive advocacy group America Votes in Florida.

Super spenders dominated: Thirty-five percent of all funds spent on state high court races, or $19.6 million, came from only 10 special-interest groups and political parties. That's compared with 21 percent in 2007-2008.

TV ad spending jumped: During the 2011-2012 cycle, a record $33.7 million was spent on television ads for state high court races, far more than the previous record of $28.5 million in 2007-2008. Negative advertisements aired in at least ten states. The Ohio Republican party said that Ohio Supreme Court justice candidate Bill O'Neill "expressed sympathy for rapists." In Wisconsin, an incumbent justice was accused of protecting a priest accused of molestation. And in Michigan, one candidate was described as having "volunteer[ed] to help free a terrorist."

Expert: JPMorgan's $13 Billion Fine Should Have Been 22 Times Bigger

| Wed Oct. 23, 2013 4:58 PM EDT

JPMorgan Chase CEO Jamie Dimon.

JPMorgan Chase is probably going to have to pay a record $13 billion fine because it created and sold dicey financial products that helped cause the financial crisis that sparked an economic crash in 2008. JPMorgan CEO Jamie Dimon has groused that this an unfairly large sum. But some experts beg to differ, noting that if the world were fair, Dimon's bank would have to pay a lot more.

On Saturday, JPMorgan reached a tentative deal with the Department of Justice, which has investigated the megabank for having packaged poor quality mortgages into securities that it sold to investors. (Some of the securities were peddled by Washington Mutual and the investment bank Bear Stearns, two failing firms that JPMorgan absorbed in 2008.) The $13 billion penalty, which is not yet final, would cover about $9 billion in fines paid to the federal government and $4 billion in relief for struggling homeowners. It would be the largest penalty that a single company has ever paid in settling a case with the Justice Department.

The historic deal is a sign that the Obama administration's crackdown on Wall Street is finally gaining steam. But experts note that the $13 billion fine—which seems a gargantuan amount—is not nearly enough. First, the fine is really only $9 billion, says William Black, an associate professor of economics and law at the University of Missouri-Kansas City and a former bank regulator who led investigations of the savings and loan crisis of the 1980s. The $4 billion in relief to homeowners, he explains, represents loan modifications that the bank would have made in any event to minimize losses and avoid foreclosures. (And that $9 million, he adds, is tax-deductible.) Second, Black says, the total damages JPMorgan, Washington Mutual, and Bear Stearns inflicted directly on purchasers of the shoddy mortgage-backed securities is estimated to be $100 billion. "The normal rule in terms of remedies for frauds of this scope," he says, "is that you pay for your damages that you caused." And if those damages were caused by fraud as opposed to mere negligence, Black adds, the US legal system often makes the fraudster pay punitive damages of at least twice that amount. "A normal recovery would be in the range of $200 billion," he says.

Elizabeth Warren to Wall Street Regulators: Put Big Bank CEOs in Jail

| Wed Oct. 23, 2013 3:33 PM EDT

This past weekend, the Department of Justice slapped a record fine on JPMorgan Chase for packaging and selling the mortgage-backed financial products that helped cause the financial meltdown. But Sen. Elizabeth Warren (D-Mass.) wants the administration to know that fines are not enough. On Wednesday, she called on Wall Street regulators to hold all those responsible for the 2008 crisis accountable.

In a letter to the Federal Reserve, the Securities and Exchange Commission (SEC) and the Officer of the Comptroller of the Currency (OCC), Warren lauded the overseer of the TARP bailout program for cracking down on financial industry players who wasted, stole, or abused the federal emergency funds doled out to banks during the financial crisis, and implied that the three banking regulators should also punish individuals who helped cause the financial meltdown.

Although the budget for TARP's inspector general was "a small fraction of the size of the budgets and staffs at your agencies," Warren pointed out, the program's watchdog has brought criminal charges against nearly 100 senior executives; obtained criminal convictions on 107 defendants, including 51 jail sentences; and suspended or banned 37 people from working in the banking industry.

How about you guys, Warren asked. She called on the Fed, the SEC, and the OCC to provide records on the number of people the agencies have charged criminally and civilly, the number of convictions and prison sentences they have obtained, the number of people banned or suspended from working in the industry, and the total amount of fines leveled against Wall Street ne'er-do-wells.

Warren knows the answer to most of these questions, but wants to shame the agencies into action. Yes, big banks have been forking over billions of dollars in civil settlements for bad behavior in the lead up to the crisis. There have been prosecutions of various smaller mortgage brokers, and some civil charges and settlements against executives who helped cause the crisis. But zero Wall Street CEOs are in jail for bringing down the economy, and no CEOs have faced criminal charges.

Earlier this year, U.S. Attorney General Eric Holder seemed to concede that some banks are "too big to jail." But Warren doesn't buy it. "There have been some landmark settlements in recent weeks for which your agencies and others deserve substantial credit," Warren said in the letter. "However, a great deal of work remains to be done to hold institutions and individuals accountable for breaking the rules and to protect consumers and taxpayers from future violations."

The September Jobs Report Is Glum, But October's Might be Worse

| Tue Oct. 22, 2013 11:24 AM EDT

The US economy added 148,000 jobs in September, fewer than expected, according to new numbers from the Labor Department, which were released Tuesday—more than two weeks late due to the government shutdown. The jobless rate fell from 7.3 to 7.2 percent, but as in previous months, the drop in unemployment is mostly due to the fact that fewer people were seeking work last month, and thus were not officially counted as unemployed.

The percentage of Americans who are working remained unchanged, at only 63.2 percent, the lowest labor force participation rate since 1986. As economist Dean Baker of the Center for Economic and Policy Research said Tuesday, "This continues the pattern that we have seen throughout the recovery as the unemployment rate falls mainly because workers leave the labor market. The unemployment rate is now down by 2.8 percentage points from its 10.0 peak in October of 2009. However, the employment rate is up just 0.4 percentage points from its low point hit in June of 2011."

The unemployment rate for blacks and Hispanics remained disproportionately high. The jobless rate for African-Americans fell one percentage point in September to 12.9 percent; for Hispanics, the number dropped three percentage points to 9 percent.

The leisure and hospitality industry lost the most jobs since December 2009, a stark change from recent months which have seen gains in low-wage service sector jobs. Retail employment increased 20,800. Here's a chart showing September gains and losses by sector, via Quartz:

There was some mildly positive data in the jobs report. Part-time employment dropped 594,000, suggesting that the surge in part-time employment earlier this year was an aberration. That's good news for the Obama administration, which has been trying to convince Americans that Obamacare's requirement that employers offer insurance to people who work more than 30 hours has not caused employers to cut hours.

In other lukewarm news, average hourly earnings increased three cents in September. And construction payrolls increased 20,000, which could ease some economists' fears that home building was leveling off.

As the Times reports, the dual battles over funding the government and raising the debt ceiling likely worsened the employment situation, "because hundreds of thousands of federal workers and contractors were furloughed and also because anxiety and uncertainty over the budget battle caused consumer confidence to plummet." But we won't see those effects until next month's jobs report. Economists estimate the shutdown cut about 0.6 of a percentage point off fourth-quarter GDP.

More shenanigans over the budget and debt ceiling this winter, not to mention a possible extension of the deep budget cuts known as sequestration, could dampen the economy further. "It’s clear that the conservatives’ long march to austerity spending cuts has sapped aggregate demand from the recovery," says Adam Hersch, an economist at the liberal think thank, the Center for American Progress. The stagnant economy and Congressional spats have led economists to predict that the Federal Reserve will likely delay scaling back it's stimulus program.

Hersch says the report is "a stark reminder that it’s time for Congress to focus on the real economic challenges facing ordinary Americans: jobs, incomes, and the public institutions critical to our economy."

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