On September 9 and 11, 2009, I noted a dangerous aspect of the Senate health insurance reform plan (which I called MaxTax, after Max Baucus) that would ultimately become ObamaCare: it would give Walmart and all other low-wage employers an incentive to keep its employees in poverty.
It was the only way to get them health insurance for free.
The MaxTax offers this one, giant, out for corporations.
A Medicaid-eligible individual can always choose to leave the employer’s coverage and enroll in Medicaid. In this circumstance, the employer is not required to pay a fee.
In other words, the one way–just about the only way–a large employer can dodge responsibility for paying something for its employees is if its employees happen to qualify for Medicaid. Under MaxTax, Medicaid eligibility will be determined by one thing: whether a person makes less than 133% of the poverty rate. And who has the most control over how much a particular person makes? Their employer!
So if Wal-Mart wanted to avoid paying anything for its employees under MaxTax, it could simply make sure that none of them made more than $14,403 a year (they’d have to do this by ensuring their employees worked fewer than 40 hours a week, since this works out to be slightly less than minimum wage). Or, a single mom with two kids could make $24,352–a whopping $11.71 an hour, working full time. That’s more than the average Wal-Mart employee made last year. So long as Wal-Mart made sure its employees applied for Medicaid (something it already does in states where its employees are eligible), it would pay nothing. Nada, zip. Nothing.
Saturday, HuffPo mapped out what I, too, have been watching. Walmart is making the changes necessary to prepare to do this–charge you and I for health insurance for its employees (actually, more of its employees, as it already uses this approach where it can), all premised on the legal poverty Walmart imposes on its workers–by kicking precisely those employees who will qualify for Medicaid off Walmart insurance.
Walmart, the nation’s largest private employer, plans to begin denying health insurance to newly hired employees who work fewer than 30 hours a week, according to a copy of the company’s policy obtained by The Huffington Post.
Under the policy, slated to take effect in January, Walmart also reserves the right to eliminate health care coverage for certain workers if their average workweek dips below 30 hours — something that happens with regularity and at the direction of company managers.
Labor and health care experts portrayed Walmart’s decision to exclude workers from its medical plans as an attempt to limit costs while taking advantage of the national health care reform known as Obamacare. Among the key features of Obamacare is an expansion of Medicaid, the taxpayer-financed health insurance program for poor people. Many of the Walmart workers who might be dropped from the company’s health care plans earn so little that they would qualify for the expanded Medicaid program, these experts said.
“Walmart is effectively shifting the costs of paying for its employees onto the federal government with this new plan, which is one of the problems with the way the law is structured,” said Ken Jacobs, chairman of the Labor Research Center at the University of California, Berkeley.
I hate to say to the boy wonks who poo-pooed my concerns in 2009 I told them so. But I told them so.
What HuffPo doesn’t mention in its piece on this, though, is that this is all presumably by design.
Walmart, after all, was one of the partners behind the push for ObamaCare. In fact, as things started to drag in summer 2009, WalMart partnered with Center for American Progress and SEIU to try to nudge the process along. While the letter signed by the heads of all three organizations preaches of “shared responsibility,” it also talks of removing “the burden that is crushing America’s businesses” and an employer mandate that does not “create barriers to hiring entry level employees” (as workers forced into part time unskilled positions are sometimes facetiously called).
Walmart gave ObamaCare a lot of credibility back in 2009. It was clear then what the payoff was going to be. And they’re cashing in now: by making the poverty wages they pay their employees the trick to get us to pay their employee health insurance, rather than the billionaire Waltons who can afford it.
I guess that’s what Walmart believes constitutes “shared responsibility.”
Update: In other “I told you so” news, Liz Fowler–the former Wellpoint exec who wrote this legislation for Baucus–is headed back to industry to cash in.
Hunton & Williams, the law firm that solicited HBGary and two other security firms to spy on Chamber of Commerce opponents, has remained silent so far about its efforts.
But it hasn’t covered its tracks. The SEIU reports that people from Hunton & Williams spent 20 hours last November–at the time when Themis was pitching H&W to use a JSOC approach to go after Chamber opponents–on the SEIU sites.
Server logs and leaked emails reveal that employees at Hunton & Williams, the principal law firm of the U.S. Chamber of Commerce, spent 20 hours on SEIU websites last November while partners from the firm were working with private security firms on an illegal “dirty tricks” campaign aimed at undermining the credibility of the Chamber’s political opponents, including the Service Employees International Union (SEIU).
And of course SEIU is able to see precisely what H&W was looking at in that period: top H&W page views in 2010 include SEIU’s page on the Chamber and on big banks. People from H&W searched on individuals at SEIU as well as on SEIU’s organizing of protests outside of BoA’s General Counsel. They even searched on “hourly pay for SEIU organizers.” (Whatever that is, it’s less than Themis was going to charge for its paid trolls.)
No wonder H&W has been so quiet about their role in this campaign.
Update: This post has been edited for accuracy.
One of the more interesting documents on HBGary et al’s partnership with the Chamber of Commerce details the prices they wanted to charge. Now, other emails make it clear that the Chamber balked at what the team originally proposed would be $2 million of work–the Chamber didn’t pay these rates (indeed, they probably haven’t paid for any of this).
But I was particularly interested in what HBGary’s Aaron Barr proposed charging for the work of what they called a “Social Media SME.”
Social media sme ($250 per hour) – experienced in social media link analysis. Personna development. Content management. Social media exploitation techniques.
This is a social media consultant, someone we know from the team’s plans they intended to deploy on Facebook and Twitter in false personas ultimately aiming to destroy the credibility of anti-Chamber activists.
These are just reasonably skilled trolls.
And for that, they wanted to charge $2,000 a day.
To put it in even more stark perspective, consider one ultimate target of the campaign: the men and women SEIU organizes pushing back against the anti-worker policies of the Chamber. Many of these workers–the kind of people who keep your building clean or care for you when you’re sick–make as little $12/hour or less (though the wages for nurses and other skilled medical care providers are higher).
These corporate spook assholes–in addition to targeting Americans for political activism–also think they’re worth 20 times as much as the people who care for the sick.
As the Palantir employee working with Barr on these numbers put it, “Most of all that we are the best money can buy! Dam it feels good to be a gangsta…..”
The Chamber of Commerce has responded to ThinkProgress’ reporting of the Chamber’s discussions with Hunton & Williams about an intelligence campaign against USChamberWatch and other anti-Chamber efforts. It purports to deny any connection with Hunton & Williams and HBGary.
More Baseless Attacks on the Chamber
We’re incredulous that anyone would attempt to associate such activities with the Chamber as we’ve seen today from the Center for American Progress. The security firm referenced by ThinkProgress was not hired by the Chamber or by anyone else on the Chamber’s behalf. We have never seen the document in question nor has it ever been discussed with us.
While ThinkProgress and the Center for American Progress continue to orchestrate a baseless smear campaign against the Chamber, we will continue to remain focused on promoting policies that create jobs.
But it does no such thing.
First, note what they are denying:
By “security firm,” it presumably means HBGary, the one of the three security firms involved that got hacked.
Note, first of all, that they’re not denying hiring Hunton & Williams, the law firm/lobbyist which they hired last year to sue the Yes Men. They’re not even denying that they retain Hunton & Williams right now.
What they’re denying is that they–or, implicitly, Hunton & Williams, on their behalf–hired HBGary.
But as I suggested in my last post on this, they are not paying HBGary (or Hunton & Williams) for the work they’re doing right now; they’re all working on spec, to get the business (business which I’m guessing they’re not going to get).
The narrative the banksters and their enablers have used to fight a foreclosure moratorium focuses on property values. If we put off foreclosures, they argue, it’ll have detrimental effects on the local community, not least by (continuing to) drive down local property values.
Now, the entire premise ignores the fact that the banksters have been sitting on a bunch of shadow inventory for years; the banks have been in no rush to foreclose on these properties and write down the losses, and Treasury has been happy to string out foreclosures to avoid a hit on the housing market.
But there’s another problem with that narrative.
If property values are falling because the properties are falling into disrepair, that’s partly the fault of the banks.
If property values are going down because no one is mowing lawns and preventing squatters, then that’s partly because banks are deadbeat neighbors who are not paying for the upkeep on the houses they own.
And, as this post from Mike Konczal (subbing for Ezra) notes, those deadbeat banks are costing local communities a fortune.
At $20,000 a pop, three vacant, unsecured and abandoned properties is the same as a teacher’s salary.
As Konczal explains, LA recently figured out a way to do something about the deadbeat banksters ruining our communities:
Given the high economic and social costs, the Los Angeles City Council, led by community activists including Alliance of Californians for Community Empowerment and others, as well as city workers who are members of SEIU Local 721 and L.A. Council member Richard Alarcon, did the sensible economic thing: They proposed a tax on abandoned and unkempt properties.
The details: “L.A.’s City Council recently passed a ‘foreclosure registry’ ordinance, requiring lenders to maintain foreclosed properties or be fined $1,000 per day, up to $100,000 a year. Lenders will have 30 days to fix problems before fines set in.”
What a sensible and elegant policy solution. This encourages banks to find suitable negotiations with homeowners to keep people in their homes. It has a serious stick to require banks to actually obey the law when it comes to the destruction of blight in neighborhood.
It works because everyone is well-incentivized to do their jobs; the city will collect money, which it loves to do, if the banks don’t comply. Citizens have a means to report blight, which they want to do to keep their neighborhoods well functioning and safe. In fact, cool online innovations like SEIU’s “Hoodwinked LA” Web page, which allows citizens to track foreclosed properties to report to city officials, have been created to empower people. And banks will avoid destroying neighborhoods out of neglect lest they pay a tax, which they had no incentive to do previously. The thing practically runs itself.
Not only does this policy have important benefits for local communities, not only does it incent everyone to modify loans and prevent foreclosures.
But it highlights the fact that banks are the deadbeats destroying your local community, not individual homeowners.
I hope as other communities follow LA’s example, they call this the “Deadbeat Bank Tax.”
Update: Via Atrios, here’s a heart-breaking story of a young boy who died in a foreclosed home’s pool. When his parents tried to sue for wrongful death, they couldn’t sort out who actually owned the house.
It took months for the family’s attorney, Janet Spence of Pembroke Pines, to sort through the property’s muddied chain of title possessions and transfers. At one point, Spence said, the home had two separate foreclosure actions pending simultaneously.
Spence also has faced some of the same paperwork irregularities that have put the nation’s foreclosure cases on indeterminate hold.
Several documents transferring the mortgage appear to be flawed or possibly fraudulent, with conflicting dates. Two documents show that the mortgage was transferred from one mortgage company to an affiliated company in November 2007 and again in February 2008.
One of the questionable documents was generated by the Florida Default Law Group in Tampa, one of four law firms that are under state investigation for allegedly “fabricating and/or presenting false and misleading documents in foreclosure cases,” according to the Florida Attorney General’s Office.
Because of the confusing paper trail, Spence has named 20 defendants in the case. They include banks that once owned the mortgage, companies that serviced the loan, property maintenance companies and even a company that was holding the mortgage for the banks.
In the face of mounting evidence that the banks foreclosing on homes did not comply with legal requirements during securitization of mortgages and therefore don’t have legal standing to foreclose, the SEIU and some community organizations teamed together last month to create an online tool that anyone can use to ask their mortgage servicer where their note is. By helping homeowners proactively check whether their bank has the right paperwork, it gives them more power in the event of a foreclosure.
The site launched just over three weeks ago. 200,000 people have visited the website; around 15,000 have used the tool to ask their bank for their note (I’ll have a more exact number shortly).
What has happened since gets very interesting. In the first few days, some banks responded quickly and in apparent good faith, some admitting there was a problem, and others sending what they claimed was the note, but was either something else entirely, or clearly did not meet the requirements for transfer.
But as banks realized those first requests were not isolated requests, two things happened. Either banks have sent back a response saying the homeowner had no right to see their note. Or, banks have not responded at all.
Here’s where things get interesting. The WhereIsTheNote-generated letters invoke the Real Estate Settlement Procedures Act (RESPA). Section 6 of RESPA dictates how loan servicers must reply to consumer complaints about their loan.
Section 6 provides borrowers with important consumer protections relating to the servicing of their loans. Under Section 6 of RESPA, borrowers who have a problem with the servicing of their loan (including escrow account questions), should contact their loan servicer in writing, outlining the nature of their complaint. The servicer must acknowledge the complaint in writing within 20 business days of receipt of the complaint. Within 60 business days the servicer must resolve the complaint by correcting the account or giving a statement of the reasons for its position. Until the complaint is resolved, borrowers should continue to make the servicer’s required payment.
A borrower may bring a private law suit, or a group of borrowers may bring a class action suit, within three years, against a servicer who fails to comply with Section 6’s provisions. Borrowers may obtain actual damages, as well as additional damages if there is a pattern of noncompliance. [my emphasis]
In other words, RESPA says that if homeowners write their servicer and say, “I have a problem with the way you’re servicing my loan,” the law requires that the bank acknowledge that the homeowner has written that letter within in 20 days. And it requires that it resolve that complaint within 60 days. If banks don’t do so, homeowners can sue.
So, as I said, just over three weeks after people started using this site, banks have been writing back and either telling homeowners that the complaint basically saying “I have doubts about whether you actually have legal standing to collect my mortgage payments” doesn’t qualify as a “problem” under RESPA. Here’s how IndyMac made such a claim in one response letter.
Although your fax references the response as RESPA Qualified Written Response eligible, your request actually does not qualify. The statute and case law require that the correspondence disputes the servicing of the loan and requires the sender to provide the servicer specific facts that would enable the servicer to investigate and respond. For instance, a dispute may involve a misapplication of a payment or a miscalculation of a monthly escrow amount. The statement that you are concerned about what you may have heard on the news does not qualify as a dispute with the servicing of your loan. Consequently, we are not subject to the response requirements set forth in the Real Estate Settlement Procedures Act.
In other cases–such as Citibank in my case–the bank appears to have simply let the 20-day deadline pass without a response.
Now, the genius of the WhereIsTheNote campaign is twofold. First, for the first time, someone is collecting an independent set of data about whether banks have a right to collect payment on the loan or not (there is privately available data, but it’s very expensive). WhereIsTheNote has already recognized, for example, that Bank of America and its subsidiaries have adopted a uniform claim that RESPA doesn’t apply in this case (of course, Bank of America is one of the most suspect banks for note problems). And WhereIsTheNote is collecting information that will show that not just those houses in foreclosure, but performing loans have note problems, proving that this is not an issue of “deadbeat” homeowners, but rather banks that are playing fast and loose with private property rights.
But more interesting is enforcement. As the section I cited above makes clear, borrowers whose banks refuse to respond to a RESPA request can sue for damages.
And as it happens, the Attorneys General in all 50 states are already investigating whether the banks are engaging in foreclosure fraud to cover up securitization problems. Which means there are already lawyers out there ready to take on the banks that do things–like refusing to respond to homeowner RESPA requests. WhereIsTheNote will be referring these RESPA non-responses to the AGs to respond accordingly.
If you haven’t already done so, I encourage you to ask your servicer WhereIsTheNote. Because–on a day when all else seems hopeless–it may well be a means of holding the banks accountable for the shitpile they made of our nation.
I gotta disagree, politely, with Ian’s statement that the SEIU statement is "rather uninformative." Here’s the statement again, from Communications Director Ramona Oliver:
We have no reason to believe that SEIU or any SEIU official was involved in any wrongdoing.
In keeping with the U.S. Attorney’s request, we are not sharing information with the media at this time.
That statement tells us two very important things:
Particularly given Fitz’s description of people coming forward to tell their sides of the story (and the damned familiarity of that "US Attorney’s request about not sharing information" from seeing it so often in the CIA Leak Case) I would imagine that Fitzgerald has heard SEIU’s side of any conversations with Blago, and found nothing much there to be interested in.
So, to answer Ian’s question:
Is any of this criminally corrupt? Was Harris reading in that SEIU was willing to do the 3 way deal? Was the request for a job effectively politely brushed off "gee, we’d love to, but ummm, other people are doing the work" or was it being seriously considered. It’s hard to tell from the what’s in Fitzgerald’s document.
I’d say that my experience with Fitz’s detailed indictments/complaints, coupled with the SEIU statement, leads me to believe that Fitz doesn’t believe any of the SEIU’s involvement was criminally corrupt. At least not as far as Fitz knows about thus far.