Stephanie Mencimer

Stephanie Mencimer

Reporter

Stephanie works in Mother Jones' Washington bureau. A Utah native and graduate of a crappy public university not worth mentioning, she has spent the last year hanging out with angry white people who occasionally don tricorne hats and come to lunch meetings heavily armed.

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Stephanie covers legal affairs and domestic policy in Mother Jones' Washington bureau. She is the author of Blocking the Courthouse Door: How the Republican Party and Its Corporate Allies Are Taking Away Your Right to Sue. A contributing editor of the Washington Monthly, a former investigative reporter at the Washington Post, and a senior writer at the Washington City Paper, she was nominated for a National Magazine Award in 2004 for a Washington Monthly article about myths surrounding the medical malpractice system. In 2000, she won the Harry Chapin Media award for reporting on poverty and hunger, and her 2010 story in Mother Jones of the collapse of the welfare system in Georgia and elsewhere won a Casey Medal for Meritorious Journalism.

How Taxpayers Subsidize the Multi-Million Dollar Salaries of Restaurant CEOs

| Tue Apr. 22, 2014 3:35 PM EDT
Starbucks CEO Howard Schultz raked in $236 million in taxpayer-subsidized compensation over the past two years.

As the fight to raise the minimum wage has gained momentum, the restaurant industry has emerged as the biggest opponent. This is no surprise, since the industry claims the highest percentage of low-wage workers—60 percent—of any other business sector. Front-line fast-food workers earn so little money that about half of them rely on some form of public assistance, to the tune of about $7 billion a year. That hidden subsidy has helped boost restaurant industry profits to record highs. In 2013, the industry reaped $660 billion in profits, and it in turn channeled millions into backing efforts to block local governments from raising pay for low-wage workers and to keep the minimum wage for tipped workers at $2.13 an hour (exactly where it's been for the past 22 years). But public assistance programs aren't the only way taxpayers subsidize the restaurant industry.

A new report from the Institute for Policy Studies finds that the public has been contributing to excessive CEO compensation as well, helping to widen the gap between the lowest-paid workers and their bosses. Thanks to a loophole in the tax code, corporations are allowed to deduct unlimited amounts of money from their tax bills for executive compensation, so long as it comes in the form of stock options or "performance pay." The loophole was the inadvertent result of an attempt by Congress to rein in CEO compensation by limiting the tax deduction for executive pay to $1 million a year. That law exempted pay that came in the form of stock options or performance pay. This loophole has proven lucrative for CEOs of all stripes, but it is particularly egregious in an industry that pays its workers so little that it is already heavily subsidized by taxpayers. 

According to IPS, the CEOs of the 20 largest companies that belong to the National Restaurant Association personally reaped more than $660 million over the past two years in performance pay—compensation that collectively ended up cutting their companies' tax bills by more than $230 million. That hefty subsidy is enough to cover the average cost of food stamps for 145,000 families for a year, according to IPS.

Topping the list of executives raking in big bucks with help from the taxpayers is the CEO of Starbucks, Howard Schultz, who was paid $236 million in performance pay and other deductible compensation over the past two years, an outlay that saved the company $82 million in taxes. That $82 million tax subsidy could easily translate into a living wage pay raise for more than 30,000 baristas, who now make on average $8.79 an hour.

There's also Yum! brands CEO David Novak, who over the past 14 years has been the beneficiary of a special tax-deferred retirement plan not available to ordinary workers. His subsidized retirement assets now top more than $232 million. Meanwhile, his employees at Taco Bell, Pizza Hut, and KFC earn so little money that they're estimated to rely on $650 million in public assistance every year. IPS figures that Novak's retirement benefits alone could save taxpayers $61 million in public assistance costs annually if they were instead used to raise the pay of 16,000 of Yum!'s low-wage workers to $15 an hour, a move that would take about 9 percent of the company's employees off the public dole. Instead, though, Yum! officials have been working behind the scenes to fend off legislation that might give their workers a paid sick day now and then. No wonder fast-food workers are going on strike.

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There Are 10 Times More Mentally Ill People Behind Bars Than in State Hospitals

| Tue Apr. 8, 2014 6:00 AM EDT

Severe mental illnesses, like schizophrenia and bipolar disorder, are brain diseases—biological conditions like heart disease or epilepsy. Yet in this country, the institutions most likely to be treating people with these illnesses are not hospitals, but rather jails and prisons.

According to a new report from the Treatment Advocacy Center (TAC), a nonprofit advocacy organization, the United States has fully returned to the 18th-century model of incarcerating the mentally ill in correctional institutions rather than treating them in health care facilities like any other sick people. In 2012, there were roughly 356,268 inmates with severe mental illnesses in prisons and jails, while only 35,000 people with the same diseases were in state psychiatric hospitals.

Chart: mentally ill hospitals vs prisons
Brett Brownell

The numbers of incarcerated mentally ill have been growing, and TAC reports that their treatment in the corrections system is nothing less than abominable. Mentally ill inmates are more likely to become the victims of sexual assault and abuse. They're also overrepresented in solitary confinement, and they are much more likely than other prisoners to commit suicide.

Putting the mentally ill in jails instead of hospitals isn't saving the government any money. In Washington state, for instance, in 2009, the most seriously mentally ill inmates cost more than $100,000 a year to confine, compared with $30,000 for others. One reason for the disparity: According to the report, mentally ill people tend to stay in jail longer than other prisoners because they aren't likely to get bail and also because they are often chronic rule-breakers. For example, according to the report, in Florida's Orange County jail most inmates stay an average of 26 days, but mentally ill inmates are there for 51 days on average. Even worse is New York's Rikers Island jail, where last month a homeless, mentally ill veteran, who'd been arrested for sleeping on the roof of a public housing project, "basically baked to death" in his cell. The average stay for an inmate at Rikers is 42 days. Mentally ill inmates get stuck there for an average of 215 days.

Map: more mentally ill in prisons
Brett Brownell

The costs of housing mentally ill inmates don't include the eventual lawsuit payouts when prisons and jails fail to treat them, and they get killed, assaulted, or hurt themselves—which seems to be happening more frequently. Last year, Mother Jones chronicled the story of Andre Thomas, a schizophrenic man on Texas's death row who gouged out his eye while in prison, and then later gouged out the other one and ate it. His story, horrific as it is, isn't especially rare.

The TAC report has a laundry list of horror stories of self-mutilation by mentally ill inmates, many of whom were in jail for minor offenses. Take the story of Florida jail inmate, Mark Kuzara, who cut open his abdomen in 2007. After it was stapled back together, Kuzara took out the staples with his mouth and ate them. "Inmates gave Kuzara pen caps, bolts, and paper that he would shove into the open wound. Kuzara also made himself vomit up meals, throwing up into the open wound," the Lakeland Ledger reported.

For the report, researchers surveyed sheriffs, police chiefs, and other corrections officials about the shift of the mentally ill from hospitals to prisons. They describe a horrific and unmanageable job of managing hundreds of mentally ill inmates cycling in and out of jail, taking up space and also getting sicker because of the lack of proper medical care.

One Mississippi deputy at the Hinds County detention center described his facility: "They howl all night long. If you're not used to it, you end up crazy yourself." An inmate in the jail "tore up a damn padded cell that's indestructible, and he ate the cover of the damn padded cell. We took his clothes and gave him a paper suit to wear and he ate that. When they fed him food in a Styrofoam container, he ate that. We had his stomach pumped six times, and he's been operated on twice.”

The failure to treat the mentally ill properly in hospitals is directly related to recent violent crimes. Take the case of Virginia, where the largest mental institution is the largest state prison and the state's jails hold three times more people with serious mental illnesses than the state hospitals do. The problem is so bad that in 2011, a Virginia Beach sheriff offered to transfer part of his jail budget to the mental-health system to try to get some of the sick people out of his institution and into proper care. Last year, the son of Virginia state Sen. Creigh Deeds (D) stabbed his father before killing himself. Barely 24 hours earlier, he'd seen mental-health professionals under an emergency custody order due to his deteriorating mental state, but he was released because no hospital beds were available.

Charts: mental health spending
Tim Luddy

The obvious solution is to create more hospital beds for treating the mentally ill, but the TAC recognizes that in the current political climate, this isn't going to happen any time soon. So they've offered some sensible interim recommendations. Among them is allowing jails and prison staff to treat mentally ill people with medication against their will. It sounds awful and in the context of a prison, potentially a tool for abuse, and TAC's recommendation is that involuntary medication should be heavily regulated. But many of the sickest mentally ill jail inmates don't recognize that they're sick, and thus, they're unable to seek the help they need to get better. Forcing medication to help people get better seems like a more reasonable alternative to letting them gouge their eyes out.

Another more creative solution is to expand the use of Assisted Outpatient Treatment (AOT), a court-ordered outpatient treatment that keeps people out of jail in the first place. AOT allows the mentally ill to live in the community—so long as they stay on their meds. Violating the court order can result in a participant's being involuntarily committed to a hospital. The results in some states have been promising. A pilot project in Nevada County, California, cut jail time for mentally ill people in the program from 521 days to 17; a North Carolina study of people in AOT found a reduction in arrests from 45 percent to 12 percent. These programs seem a lot more sane, and cost-effective, than putting every homeless person hearing voices in jail.

This Tea Party Leader Seems Pretty Confused About the Hobby Lobby Case

| Tue Mar. 25, 2014 2:23 PM EDT
Tea Party Patriots co-founder Jenny Beth Martin

When the tea party movement first emerged, with its laser focus on fiscal responsibility and a balanced budget, it never really distinguished itself with a deep understanding of economic issues or the operations of government. Now that it's joined the culture wars and shifted into divisive social issues it once eschewed, the movement doesn't seem to have any better handle on law or policy than it did when it was warning President Obama to "keep your hands off my Medicare."

Case in point: the Tea Party Patriots effort to insert itself into the religious freedom wars surrounding the Affordable Care Act's contraception mandate. On Tuesday, the group held a rally at the US Supreme Court to "stand up for the right to choose," during the oral arguments in the biggest case on the docket this year, Sebelius v. Hobby Lobby. The case involves a for-profit corporation with 13,000 employees and $3 billion in annual revenue that's arguing the Obamacare requirement that the company's health insurance plan cover most contraception violates its religious freedom. At the core of the case is the dubious contention that a corporation can hold religious beliefs.

Calling the event a "Freedom of Choice" rally, the tea partiers are co-opting the language of the reproductive rights activists who are arrayed on the other side of the case. On the Tea Party Patriots' website, the groups insist that the case "isn't about what Hobby Lobby, Inc. is or isn't willing to provide to their employees. This is about everyone's right to practice their religion without the government stepping in and telling them what to do."

It's obvious from Tea Party Patriots' simplified description of the Hobby Lobby lawsuit and other statements that the group's leaders are pretty clueless about the case (and the law). In a press release today, Martin claimed:

It is quite astonishing that the U.S. government, after forcing the health care law on the American people who overwhelmingly opposed it, has taken the further action of bringing a beloved family business to court to force them to violate their constitutional rights. The owners of Hobby Lobby have said repeatedly that they have no desire to make health care decisions for their employees. Why is the government forcing them to do so? 

Emphasis mine. In fact, Hobby Lobby is in court precisely because its owners want to make health care decisions for employees—by denying insurance coverage for contraception to which it has religious objections. And the government has never forced a "beloved family business" to violate its constitutional rights. Leaving aside the fact that it's not legally possible for a business to violate its own constitutional rights, there's nothing in the Affordable Care Act that requires a company to provide health insurance for its employees, much less a plan that clashes with the religious beliefs of its owners.

As Georgetown law professor Martin Lederman has discussed extensively here, while the ACA includes an individual mandate that requires people to purchase insurance, there's nothing in the law that requires their employers to provide it. But if a company does provide a plan, it must cover most forms of birth control, including the emergency contraception Plan B and Ella. If Hobby Lobby wants to avoid having its insurance plan cover these sorts of drugs, it can simply drop its insurance plan, pay a modest tax, and let employees buy their own plans on the insurance exchanges. (To be nice, the company could raise their pay to cover the cost of the insurance.) As government social programs go, the ACA has a pretty light touch.

The tea party's framing of the issues in Hobby Lobby reflect the movement's attempt to square its libertarian roots with its active courtship of the religious right. Not long after hitting the national political stage, fledgling and underfunded groups like Tea Party Patriots actively sought out evangelicals, particularly their deep-pocketed donor base. In turn, the "teavangelicals," as Christian activist Ralph Reed dubbed them, demanded that GOP candidates, and the tea party itself, not ignore their pet issues like abortion and gay marriage in favor of more libertarian budget-related issues, and the culture wars were back in full flower.

Mark Meckler, a Tea Party Patriots co-founder who has since left the group, was initially adamant that the tea party would not engage in fights over social issues like the ones in the Hobby Lobby case. By the tea party's heyday in 2010, he was telling a religious-right conference organized by Reed that tea partiers' motivating force was not the national debt but anger over "this idea of separation of church and state. We're angry about the removal of God from the public square." Tuesday's rally at the Supreme Court is evidence that the social issues the tea party initially vowed to avoid is really all that's keeping what's left of the movement alive.

How Big Banks Rake in Millions on the Backs of California's Poorest Families

| Tue Mar. 25, 2014 10:44 AM EDT

It's expensive to be poor. A new report out from the California Reinvestment Coalition concludes that the big banks are charging some of California's poorest families hefty ATM fees to access monthly benefits from the state welfare program known as CalWORKs, skimming at least $19 million a year, the group estimates, from this taxpayer-funded program.

Banks with a history of sticking the poor with overdraft fees are now gouging them with ATM fees.

The average CalWORKs family is an adult with two children who gets $510 a month worth of benefits, or about $6,120 a year. That's not enough to live on, not even close, and the benefits are 8 percent lower now than they were in 2011. On top of that, accessing the funds costs them as much as $4 per ATM transaction, fees they really don't have any alternative but to pay. That's because California doesn't ask its vendors to do much by way of accommodating the recipients. A $69 million contract with Xerox to administer an electronic benefit transfer card system has helped make these EBT cards the default way to deliver public assistance, and there's no state requirement that banks waive ATM fees for people who use them.

In a press release, Andrea Luquetta, author of the report, explained:

For families trying to escape poverty, these fees siphon away money that could be used for school supplies, transportation or medicine.  The current system leads too many people to pay fees just to access the very benefits they need to survive. It is a diversion of taxpayer dollars away from their intended use of supporting families. That's why we're calling on the state, banks, county offices, and nonprofit partners to work together to address this pressing issue.

The average EBT user pays about $5 a month in fees, but Luquetta says that figure masks the real story, as some people successfully avoid paying the fees while others pay a lot more. "It is typical for someone to pay the fee at least twice in a month in order to withdraw all of the cash in as few transactions as possible. At a Bank of America ATM that will cost $6. And then, of course, there is the challenge of what to do with that cash—load it onto a prepaid [credit] card? Buy money orders? All of that costs fees as well that we don't capture. I even know a few people who pay the fee at a Bank of America or Wells Fargo ATM and then turn around and deposit the cash into their account at the same bank," she said in an email.

In theory, someone receiving CalWORKs benefits could have the money deposited directly into a checking account for free. In fact, most of the beneficiaries don't have checking accounts, largely because they can't afford them. More than 96 percent of beneficiaries use the EBT cards. Many welfare recipients are leery of bank accounts, having previously suffered high overdraft fees and other fees charged by banks.

Some of the banks benefiting from the EBT fees have helped play a role in stoking those fears of traditional banking. The largest beneficiary by far of EBT-related ATM fees in California is Bank of America, which hosted 12 percent of the transactions in 2012, earning $3.6 million, according to the coalition. Back in 2004, a California jury hit the bank with a verdict that would have potentially exposed it to $1.2 billion in damages in a class action lawsuit filed by Social Security recipients who'd had their federal retirement or disability benefits seized directly from their accounts to pay excessive overdraft fees—a practice that left many low-income seniors and disabled people in dire straits. Plaintiffs showed that, like many banks at the time, BofA processed checks in a way that often made more of them bounce, thus increasing the fees it could automatically deduct. (A BofA spokeswoman says the bank no longer processes checks that way.)

The Obama administration came to BofA's defense in the case, which went all the way to the California Supreme Court; the verdict was overturned on appeal. But publicity around the case went a long way in exposing the sorts of problems low-income people encounter when they do business with big banks. Given this history, it's hard to blame families for not wanting to entrust these institutions with their meager benefit checks. But the banks have figured a way to make them pay anyway.

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