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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Progressive Groups Take Obama to Task for Violating Voting Rights Law

| Thu Mar. 20, 2014 12:45 PM EDT

After months of quiet lobbying, civil rights groups and progressive organizations are now coming out publicly against the Obama administration for failing to enforce a voting rights law that applies to the Obamacare health insurance exchanges. 

The 1993 National Voter Registration Act (NVRA), commonly known as the "Motor Voter" law, requires DMVs and other state agencies that provide public assistance to also help voters register. The Obama administration has acknowledged that Obamacare exchanges are covered by the law. But the federally-run exchange, which serves residents of states whose Republican governors refused to establish their own insurance marketplaces, isn't doing much to fulfill its Motor Voter obligations, beyond embedding a link to the federal voter registration site in the online insurance application.

The law requires covered agencies to go much further and treat voter registration the same as the application process for other services. In the case of Obamacare, this means the navigators hired by HHS to walk uninsured Americans through the insurance sign-up process should also offer to guide applicants through the voter registration process. But Republicans have decried plans to apply the Motor Voter law to exchanges, saying it would create a "permanent, undefeatable, always-funded Democrat majority," since the uninsured are disproportionately low-income people and minorities—groups that tend to vote Democratic. Following the outcry by the GOP, the Obama administration decided last year to hold off on full implementation of the Motor Voter provision. But now 32 progressive organizations and unions—including the NAACP, United Auto Workers, and the National Council of La Raza—are calling on the Department of Health and Human Services (HHS) to start requiring navigators to help register voters immediately.

"There is no question that the ACA [the Affordable Care Act] must meet the requirements of the NVRA, as your administration has acknowledged," the groups said in a letter to the HHS last week. "As staunch supporters of voting rights, we believe that it is critical for the ACA to meet these legal requirements now and offer voter registration to the millions of Americans who will be shopping for insurance on the exchanges in the coming months and years."

The letter comes on the heels of a public campaign in January led by the voting rights organizations Demos and Project Vote to get HHS to fall in line with Motor Voter.

The 24 million mostly low-income and minority Americans who are expected to buy insurance through the exchanges by 2017 are far less likely than other citizens to be registered to vote, although Motor Voter has helped lessen the disparity. Some 140 million people have registered to vote through the program since it was enacted. Lawrence Jacobs, a political science professor at the University of Minnesota, told Mother Jones in January that the reason HHS "has really dropped the ball" on the Motor Voter issue is likely quite simple. "This looks like [the administration is] running from a political fight," he says.

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The Fed Was Supposed to Rein In Its Bailout Powers. Instead It Did This.

| Thu Mar. 13, 2014 12:05 PM EDT
Federal Reserve chair Janet Yellen at a House hearing in February.

Between 2007 and 2009, the Federal Reserve—the US central bank tasked with regulating unemployment and inflation—handed out an unprecedented $20 trillion in super-low interest loans to failing Wall Street banks. The 2010 Dodd-Frank financial reform law required the Fed to restrict its emergency lending powers so that too-big-to-fail banks don't expect the central bank to dole out easy money again in the event of another financial crisis. The Fed waited over three years to craft regulations to comply with the Dodd-Frank provision, and now it has finally drafted rules to limit its bailout powers, financial reform advocates say the restrictions are far too weak.

Dodd-Frank says that any future emergency lending by the Fed can't be used to bail out insolvent firms, has to be backed by good collateral, and can't go to a single institution. The law also imposes time limits on the Fed's emergency loans to banks. The draft rule that the Federal Reserve released in late December (before current Fed chair Janet Yellen was confirmed) misses the mark on all these requirements, Marcus Stanley, the policy director for the advocacy group Americans for Financial Reform (AFR) said in a letter to the Fed this week, adding that though the rule "complies with the letter of the law, it does not fulfill the spirit of the Congressional mandate," which intended to significantly restrict the Fed's bailout abilities.

"The rule mostly reiterates the language of [Dodd-Frank]," Stanley says. "And the drafters take advantage of every opportunity to interpret the statute in ways that minimize limits on emergency lending authority."

Instead of limiting the Fed's emergency lending powers to temporary cash assistance as it is supposed to, the draft rule imposes no clear time limit on how long a big bank may remain dependent on Fed largesse. And the draft regulation defines "solvency" with far too broad a brush, according to AFR. The proposed rule does not require the Fed to assess if a potential borrower's liabilities exceed the value of its assets.

While the emergency lending rule would ban loans to a single institution, it would still allow the creation of loan programs that lend to, say, three or four of the largest banks, while allowing smaller banks to flounder.

The Fed's draft emergency lending rule does not even set an interest rate at which loans will be extended, a provision that would help to limit the "moral hazard" of easy money, AFR notes. And the rule is unclear as to how it would value borrowers' collateral.

The Fed declined to comment. But last year, former Fed chairman Ben Bernanke dismissed concerns that the central bank had not yet drafted a rule limiting its emergency lending powers, insisting that the language in the Dodd-Frank law was sufficient. "I think that [Dodd-Frank] is very clear about what we can and cannot do. And I don't think that the absence of a formal rule would allow us to do something which the law prohibits," including bailing out an individual firm, or lending to an insolvent bank, he said at a House hearing in July.

The Fed is currently accepting public comment on its emergency lending rule, so it is possible that reformers may win some victories before a final rule is put in place. Though the lobbying clout of the financial industry vastly outweighs that of pro-reform groups.

Before the Fed finally drafted its emergency lending rules, financial reformers said the central bank was likely dragging its feet because it didn't want to cede some of its authority over the financial world. This latest lukewarm effort to rein in its bailout abilities makes it seem like that may be the case.

"There are two ways to keep the economy on an even keel," AFR's Stanley told me last July. "Through clear, transparent rules that treat everyone the same—which is pretty challenging, and involves taking on a lot of interests." Or, he says, "you get to create a whole bunch of money out of nothing and you can hand it out wherever the problem is… It's easier to have this magic power."

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