A record 6 million people -- or 27.2 percent of the population -- are unemployed in Spain, the highest level for the country since it began keeping records in 1976. Luckily, there is a silver lining: authorities say the rate of the increase has at least slowed since the recession first began. Spain’s economy -- the fourth largest in Europe -- has relied heavily on the major central banks, but the country has been left in recession by deep spending cuts. “These figures are worse than expected,” said Jose Luis Martinez, a strategist at Citi in Madrid. Spanish President Mariano Rajoy is expected to unveil a new reform plan Friday, but thousands of protesters still converged in Madrid on Thursday.
The federal government must double down on grants to low-income students and dramatically simplify the system of student loans, says a new report by the non-partisan New America Foundation.
The report, released on Tuesday, lays out more than 30 recommendations for fixing the nation's increasingly strained system of paying for college, chief among them a more substantial and permanent investment in direct aid to students through Pell grants. The government should make the funding for the Pell program an entitlement in the federal budget, shielding it from annual wrangling, and should boost the maximum amount of individual grants, the report says.
It also proposes that the government create a system of incentives aimed at realigning how college use institutional aid dollars: Those with few low-income students and high tuition after discounts would be required to match a portion of Pell dollars with institutional aid; schools with many low-income students that meet a required graduation rate would get bonuses.
The New America Foundation's report was funded by the Bill & Melinda Gates Foundation as part of a larger initiative to explore policy recommendations on ways to restructure and reform the financial aid system.
Beyond its recommendations on grants, the report suggests a wholesale overhaul of programs for student loans.
We've reported on the federal Parent Plus loan program, and how the lack of loan limits allows families to borrow more than they can reasonably afford to cover ever-increasing college costs. The government should end the Plus program, the report argues, as it "can encourage families to over-borrow and provides colleges with a convenient source of funds if they wish to raise their prices."
The federal government should stick to one loan program – the main federal loan program known as the Stafford loan, the report suggests. It also suggests that the many different repayment plans currently available be replaced with one that bases monthly payments on a percentage of income – a modified version of some existing plans.
The report also offers ideas to reform day-to-day handling of student loan payments. Errors in the servicing of student loans often frustrate borrowers and exacerbate the difficulties of repayment, especially for those whose loans were shuffled to a group of new nonprofit servicing companies.
As we've noted, these companies won a carve-out from Congress in 2010 that guaranteed them an opportunity to get in on servicing federal student loans. The report advocates ending this carve-out, arguing it "has made the federal student loan program more complicated and costly than it should be," and that all servicing contracts should be awarded through competitive bidding.
In this morning's weekly address, President Obama highlighted indications of an improving U.S. economy, Five million jobs added, a falling unemployment rate, and his Wall Street reform legislation and gave a glimpse of what is a slowly, but very steadily, brightening financial future for middle-class Americans.
He also lauded the new Consumer Financial Protection Bureau, which beginning next month will offer a new service to ensure that Americans will have a fair shake and can access, and correct their credit scores that are vital in many areas of personal finance.
The companies that put your credit score together can make mistakes. They may think you had a loan or a credit card that was never yours. They may think you were late making payments when you were on time. And when they mess up, you’re the one who suffers.
Until this week, if you had a complaint, you took it to the company. Sometimes they listened. Sometimes they didn’t. But that was pretty much it. They were your only real hope.
Not anymore. If you have a complaint about your credit score that hasn’t been properly addressed, you can go to consumerfinance.gov/complaint and let the consumer watchdog know.
Not only will they bring your complaint directly to the company in question, they’ll give you a tracking number, so you can check back and see exactly what’s being done on your behalf.
The Consumer Financial Protection Bureau, he explained, has also scored major victories recently, forcing credit card companies to settle with Americans for $400 million.
But, as always, reforms that benefit everyday citizens over banks, share a common enemy, the Republican party.
That’s what Wall Street reform is all about – looking out for working families and making sure that everyone is playing by the same rules.
Sadly, that hasn’t been enough to stop Republicans in Congress from fighting these reforms. Backed by an army of financial industry lobbyists, they’ve been waging an all-out battle to delay, defund and dismantle these new rules.
I refuse to let that happen.
President Obama vowed to fight a return to the "era of top-down, on-your-own economics." We've come too far for that, he said, and sacrificed too much.
A full transcript of the President's weekly address is available here.
Between what are seen by many as President Obama’s weak proposals and Mitt Romney’s loving embrace, bankers have little to fear from either administration, and that leaves the rest of America on perilously thin economic ice. Neil Barofsky, who held the thankless job of special inspector general in charge of policing TARP, the bailout’s Troubled Asset Relief Program, joins Bill to discuss the critical yet unmet need to tackle banking reform and avoid another financial meltdown.
Currently a senior fellow and adjunct professor at the New York University School of Law, Barofsky is the author of Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street.
Here's our latest explainer video, on the storied history of money in politics. Lyrics follow.
Act I: Brown Paper Bags
"I made my mistakes, but in all my years of public life, I have never profited [from public service]. I've earned every cent." (Richard Nixon)
"Money is speech." (Jeff Greenfield) "The more speech the better." (Antonin Scalia) "Money is speech." (Jeff Greenfield) "I've earned every cent." (Richard Nixon) "Money is speech." (Jeff Greenfield) "The more speech the better." (Antonin Scalia) "I don't like all the influence of money in politics." (Mitt Romney)
When people think of Watergate they think of a break-in But they don't mention the money that Nixon was taking From wealthy donors to help him get reelected Nixon paid them back in favors just like they expected
To battle corruption Congress passed a new law Capping contributions to a candidate's haul The source of the donations had to be disclosed too And the FEC was formed to enforce the new rules
Some who felt the law went against the Constitution sued Saying limits on money limited free speech too So the courts kept the cap on how much you can donate But said spending was unlimited by an outside group or candidate
That meant no more spending limits to promote a cause Or to point out a rival campaign's flaws So while candidates once snuck around with brown paper bags From then on they raised money publicly or left it to PACs
"Money is speech." (Jeff Greenfield) "The more speech the better." (Antonin Scalia) "Money is speech." (Jeff Greenfield) "I've earned every cent." (Richard Nixon) "Money is speech." (Jeff Greenfield) "The more speech the better." (Antonin Scalia) "I don't like all the influence of money in politics." (Mitt Romney)
Act II: Soft Money
"We should also curb the role of big money in elections by capping the cost of campaigns…" (Bill Clinton)
In the 80s and 90s, there was a new gimmick: "Soft money" that's disclosed but had no limits It's supposed to cover each party's expenses But guys like Clinton used it to help their election chances
There was just one problem, Clinton's party was broke So he asked for more money every time he spoke And in return for the 100 million dollar cash-in He let donors use the Lincoln Bedroom to crash in
Then the "scandal and reform" cycle happened again And legislation was proposed by Feingold and McCain It capped donations to parties, ending soft funds And banned corporate/union issue ads right before elections
But with each new reform comes new loopholes Tax exempt "527s" arose Because they weren't explicit about whom they supported Many still raised money without limits to thwart them
"Money is speech." (Jeff Greenfield) "The more speech the better." (Antonin Scalia) "Money is speech." (Jeff Greenfield) "I've earned every cent." (Richard Nixon) "Money is speech." (Jeff Greenfield) "The more speech the better." (Antonin Scalia) "The rules are what they are…" (Jay Carney)
Act III: Super PACs and Non-Profits
"I don't think American elections should be bankrolled by America's most powerful interests." (Barack Obama)
But the most outside money was yet to be spent Some argued spending limits broke the first amendment "Corporations and unions are entitled to free speech" They took it to court, the Supreme Court agreed.
Super PACs can raise as much money as they want They can also use union and corporate funds The only rule is they cannot coordinate With a specific party or a specific candidate
But reform opponents weren't quite done yet They found new uses for 501(c)(4) non-profits Which are a lot like Super PACs with more mystery They haven't had to disclose donors ever in history
Whether Republican or Democrat you might believe That spending limits jeopardize our freedom of speech But with each new cycle of deregulation More money is being injected into our elections
Bill talks with financial expert Sheila Bair about the lawlessness of our banking system and the prognosis for meaningful reform. Bair was appointed in 2006 by President George W. Bush to chair the FDIC. During the 2008 meltdown, she argued that in some cases banks were NOT too big to fail — that instead of bailouts, they should be sold off to healthier competitors. Now a senior adviser to the Pew Charitable Trusts, Bair has organized a private group of financial experts including former Fed chairman Paul Volcker, former Senators Bill Bradley and Alan Simpson, and John Reed, once the chairman of Citicorp, to explore ways to prevent the banking industry from scuttling reforms created by the Dodd-Frank Act.
“I worry that the public is getting cynical,” Bair tells Moyers. “One of the reasons I started the Systemic Risk Council is I feel the special interest lobbying is, in a calculated way, trying to slow down reform, complicate reform, water reform down. And the public loses interest — they become cynical about if the regulators in Washington can fix any of this, and they don’t exert counter political pressure to get meaningful reforms in place.”
Everybody is now talking about the student debt crisis, but nothing is being done about it. Thanks in large part to the great public amplifier of the Occupy movement, this year’s presidential contenders have been forced to embrace student loan reform as a talking point in their respective campaigns. But the debt relief being pushed by the Obama administration is a token gesture, aimed at getting some traction on the youth vote–especially the more disillusioned or alienated student constituencies. Recent bills introduced in Congress–Student Loan Forgiveness Act (H.R. 4170) and the Private Student Bankruptcy Fairness Act (H.R. 2028)–have zero chance of passing in anything like their current form. Practically speaking, no reform program of any substance is on the legislative horizon, least of all one that would regulate the predatory lending practices of Wall Street banks.
The truth is that student debt relief is too important to be left to elected officials. They are chronically dependent on the financial backing of the lending industry, and are structurally incapable of addressing this crisis, let alone resolving it. As a result, reform initiatives such as Student Loan Justice and Forgive Student Debt (to Stimulate the Economy) that have been aimed at petitioning lawmakers have very little to show for all their hard effort. The recent federal modifications in payment schedules are micro-cosmetic compared to the sea-change that is required to free debtors of their intolerable burdens and rescue higher education from its increasing use as a profit engine for financiers, asset speculators, and real estate developers. The pathway to this outcome does not lie in futile pleas for economic reform, but through a political movement, driven by self-empowerment and direct action on the part of debtors.
The Occupy Student Debt Campaign was launched at Zuccotti Park in November 2011 with the goal of building a student debt abolition movement. Our campaign is based on principles for which we believe there is widespread support:
1) Free public education, through federal coverage of tuition fees.
2) Zero-interest student loans, so that no one can profit from them.
3) Fiscal transparency at all universities, public as well as private.
4) The elimination of current student debt, through a single act of relief.
These are interlocking principles, and should not stand on their own. Imagine a world in which lawmakers were to respond positively to the current calls for debt “forgiveness” (an unfortunate term that implies the debtor has sinned). Such a measure would offer much-needed relief, but it would still disadvantage future debtors if it were not complemented by remedies that brought to an end the practice of compelling students to privately fund higher education by going into debt bondage. So, too, a singular focus on reducing interest rates (even to zero) is more likely to encourage colleges to increase their fees than to open up equitable access to education.
You may have given up or forgotten about it, but some states are already using the health reform law to test their own versions of government-run healthcare.
In 2014, under the federal health overhaul law, millions of Americans will be able to buy coverage through state-based insurance exchanges. In California, government-run public plans, like the Alameda Alliance for Health, will go head-to-head with private insurance companies to compete for all those new customers, and those who run the county plans believe they can offer a robust network of doctors and hospitals to bargain shoppers looking for low-cost coverage.
“I think when some people get to make a choice,” says [Alameda Alliance for Health CEO Ingrid] Lamirault, “having local offices they can walk into and get help with things and get their questions answered, and when they call customer service they get their calls answered in under two minutes. Those kinds of things are important to them.”
Montana is looking at opening up its Medicaid program to public employees and, eventually, to any citizens in the state, although it’s unclear whether the state will receive waiver authority to do so. Oregon is considering a similar approach just as Vermont moves forward on its own plan to go single-payer.
Maybe it's time to check in with your representatives to find out what they're doing to make healthcare affordable fore everyone, and if they aren't doing anything, shame them with these fine examples of progress.
