Bank of America has decided to renegotiate the terms of a Minnesota homeowner’s mortgage just days before it was scheduled to be auctioned off following a week of action by activists with Occupy Our Homes MN and other groups. Ruby Brown began fighting the foreclosure more than five years ago. She found out last week that the bank had canceled a scheduled sheriff’s auction, according to OccupyOurHomes.org:
After a five-year battle over now-illegal lending practices, a bank error that dropped her from a loan modification program, and a campaign with Occupy Homes MN, north Minneapolis homeowner Ruby Brown has received a mortgage renegotiation from Bank of America, just days before her home was to be auctioned off.
“This is an incredible victory for Ruby, who has been in the struggle for so long. It’s also something that can and should happen for everyone facing the loss of a home right now,” said Susan Kikuchi, an organizer with Occupy Homes MN.
Brown isn’t the only homeowner to face foreclosure over banking errors. Wall Street banks have used fraudulent documents to process foreclosures, illegally foreclosed on members of the military, and foreclosed on homes over small clerical errors. The biggest lenders were subject to a $25 billion mortgage fraud settlement with the federal government and state attorneys general earlier this year.
The Republican nominee in Ohio’s Senate race stands to reap a significant financial windfall if the government defaults by not raising the debt ceiling, a move he opposed last year and has indicated he would vote against if elected to the Senate.
According to personal financial disclosure documents examined by ThinkProgress, Josh Mandel’s wife owns an undisclosed amount of ProShares UltraShort 20+ Year Treasury exchange-traded fund (ETF). This ETF aggressively “shorts” U.S. Treasury bills, meaning that it bets against U.S. debt and spikes when Treasury bill values drop. If a default were to occur, the desirability of Treasury bills would plummet and Mandel’s ETF would skyrocket in value.
That precise scenario could become more likely if Mandel wins his race against Sen. Sherrod Brown (D-OH). One of the top issues Mandel lists on his website is to “Stop increasing the debt ceiling.” Similarly, when Congress was embroiled in the debt ceiling fight last year, he stated that he “would have voted against the debt deal” that narrowly staved off a default.
Mandel and his wife’s personal financial disclosure form shows an investment of up to $1,001 in the Treasury-shorting ETF (highlighted in yellow):
In addition, it appears as though Mandel’s wife may own up to $15,000 in additional holdings that bet against U.S. Treasury bonds. As shown below, Mandel lists on page 18 ownership of up to $15,000 of “ProShares Trust Ultrashort (Bond).” Though this is not the name of a specific asset (and thus means the Ohio Republican did not file a complete form) ThinkProgress spoke with a representative from ProShares who noted that they only provide four “ultrashort” bond funds — 20+ year Treasury, 7-10 year Treasury, 3-7 year Treasury, and Treasury inflation protected securities — all of which short Treasury bills.
Though Mandel’s Treasury-shorting holdings may not be gigantic at the moment, their value would soar in the event of a debt default.
Controversy erupted last summer when it was revealed that House Majority Leader Eric Cantor was also betting against long-term U.S. Treasury bonds while opposing efforts to raise the debt ceiling. Mandel’s ProShares UltraShort 20+ Year Treasury stock is the same one that Cantor owned.
The very optics of a politician profiting off a default could present problems for Mandel as he tries to convince Ohio voters to send him to Washington next year so he can “stop increasing the debt ceiling.”
Multiple requests for comment have not been returned by Mandel’s campaign.
New data released today shows that the U.S. economy grew by 1.5 percent last quarter, following a revised increase of 2 percent in the first quarter. Republicans, of course, leaped on the middling number, with Speaker of the House John Boehner (R-OH) calling it “a troubling sign for the future of our economy.”
But GOP’ers neglect to mention that they repeatedlyfilibustered President Obama’s American Jobs Act in the Senate, after several independent economic analysts estimated that the bill would boost GDP by one to three percent.
– Mark Zandi, chief economist of Moody’s Economy, put the boost at 2 percent of GDP.
– The Economic Policy Institute estimated that the new initiatives in the AJA would increase GDP by 1.9 percent, while policy extensions it included would increase GDP by another 1.4 percent.
The Congressional Budget Office also scored the bill as a net deficit reducer over a ten year budget window. As ThinkProgress has detailed, blocking the AJA is hardly the only thing that the GOP has done to sabotage economic growth and job creation.
Our guest blogger is David Madland, Director of the American Worker Project at the Center for American Progress Action Fund.
Sen. Tom Harkin (D-IA)
Senator Tom Harkin (D-IA) outlined the principles for a new type of retirement plan in a report released today. This sort of plan is sorely needed given the current state of retirement savings.
The latest figures from the Federal Reserve’s Survey of Consumer Finances show that the typical American near retirement age has accumulated enough money in her 401(k) account to receive monthly payments of just $575. This is a particularly damning figure given that this group of near-retirees is dependent on 401(k)s, while previous cohorts commonly also had a pension.
Harkin’s new USA Retirement Funds — based in part on a forthcoming Center for American Progress proposal, as well as the work of the Pension Rights Center — combines some of the best elements of defined-contribution plans and defined-benefit plans to deliver a portable, cost-effective, and stable level of benefits for retirees at a constant cost to employers.
Though the proposal is unlikely to become law anytime soon, it is still a big step towards solving the pending retirement crisis, because it offers the kind of solution that can appeal both to workers and employers.
Just a week after it was ordered to pay $165 million in refunds and penalties for wrongful credit card practices, Capital One reached a settlement with the Department of Justice over charges that it financially abused active military members. Under the terms of the settlement, the bank will pay $12 million to American military members who were denied their legal right to reprieve from foreclosures, high interest rates, and auto reposession while on active duty.
The Justice Department estimated that 4,000 troops were affected by Capital One’s violation of the Servicemembers Civil Relief Act, which grants certain financial protections to military members. Capital One will pay $55,000 in fines to DOJ while also providing settlement money to troops and restoring lost and damaged credit, the Washington Post reports:
Justice officials have asked Capital One to pay $7 million in damages to military personnel — including $125,000 for foreclosure, $10,000 for repossession, $500 for failed interest rate reduction and a refund of all the interest charged above 6 percent.
The bank will provide another $5 million to service members who did not receive the full benefits allotted under the act. The settlement also requires Capital One to repair the credit of those affected by its actions, which occurred from July 2006 to November 2011.
But Capital One was hardly the only bank to take advantage of members of the military before and after the housing crisis. Ten lenders were accused last year of illegally foreclosing on thousands of military members, and multiple banks, including JP Morgan Chase, Wells Fargo, and Citigroup, have settled claims with the government over their abuses of servicemembers.
Welcome to ThinkProgress Economy’s morning link roundup. This is what we’re reading. Have you seen any interesting news? Let us know in the comments section. You can also follow ThinkProgress Economy on Twitter.
Facebook’s shares fell to a new low after the company lost $157 million in its first full quarter as a public company. [Time]
The Treasury Department released new details of a plan to crack down on global tax dodging yesterday. [Wall Street Journal]
The Justice Department is preparing to file charges this fall against traders involved in the LIBOR rate rigging scandal. [Bloomberg]
The House plans to vote on competing Republican and Democratic tax cut proposals next week. [Bloomberg]
Economists at Citigroup believe there’s a 90 percent chance that Greece will exit the Euro. [CNN Money]
House and Senate leaders are reportedly working on a six month funding measure that will prevent a government shutdown before November’s election. [The Hill]
House Democrats plan to introduce legislation to raise the estate tax back to its 2009 level. [The Hill]
Disability advocates have filed a lawsuit against Walmart, claiming that the retail giant’s stores are inaccessible. [Associated Press]
A House Republican plan to slash funding for a Social Security program would cost taxpayers far more than it would save, according to a letter from Social Security’s chief actuary. The Republican plan, which is focused on a program meant to ensure that beneficiaries are not overpaid, would cut more than $800 million below the level agreed to in the Budget Control Act, the spending agreement passed during last year’s debt limit negotiations.
In a Thursday letter responding to inquiring House Democrats, Social Security’s chief actuary Stephen C. Goss concludes that cuts will cost taxpayers “between $5 billion and $6 billion more over the lifetime of those who would not be reassessed due to the reduced funding.”
The cut would hamper the highly-effective program that roots out waste, fraud, and abuse in Social Security — according to Goss, such reviews produce between $6 and $9 in regained savings per dollar spent. While the analysis only covered the impact on the program this year, future cuts would likely have a similar impact on the program.
House leadership isn’t likely to give the Labor, Health, and Education appropriations package that contains the cuts a vote before the full House, but the plan keeps up the GOP’s disturbing trend of targeting social safety net programs that largely benefit the lower- and middle-classes.
Overtime Wage Theft Complaints Hit Record High |
The number of workers filing wage theft complaints against their employers for not paying overtime wages hit a record high in 2011, according to a report from law firm Seyfarth Shaw. In 1993, there were 1,457 cases involving overtime pay brought under the Fair Labor and Standards Act, but that number spiked to a record 7,006 in 2011. And 7,064 cases have already been filed this year, the Huffington Post reports, putting 2012 well ahead of record pace. These results are consistent with findings of other studies. In May, CNN Money found that the number of collective action cases brought under the Fair Labor and Standards Act jumped more than 400 percent in 2011.
The top two corporations on the Fortune 500 Global ranking, Royal Dutch Shell and ExxonMobil, announced their 2012 second-quarter earnings today, bringing the total profits for three Big Oil companies to $44 billion for 2012 or $250 million every day this year. Exxon profited by $16 billion this quarter, bringing its earnings for 2012 to $25 billion.
The New York Times wrote that Exxon and Shell’s earnings “disappoint,” because energy prices unexpectedly dropped for consumers this summer. Put their profits in the appropriate context, however, and Exxon and Shell still made a combined $160,000 per minute last quarter, even though the top five oil companies benefit from $2.4 billion federal tax breaks every year.
Below we look at what Exxon and Shell spends its earnings on:
– Exxon spent 42 percent — or $10.7 billion — of its 2012 profits buying back its stock, which enriches executives and largest shareholders.
– Exxon has spent $17 million lobbying for the past 18 months, making it the top spender in the oil and gas industry. It has spent more than $52 million lobbying for the first three years of the Obama presidency, 50 percent more than in the Bush administration.
– Shell will start drilling in the Arctic this summer, but its oil spill response plan is still behind schedule. It’s off to an inauspicious start in the Arctic, recently losing control of an Arctic drilling rig.
While these companies already benefit from billions in tax breaks, Mitt Romney has offered the industry even more. A Center for American Progress Action analysis finds that Romney’s tax plan could lower five companies’ annual tax bill by another $2.3 billion, virtually doubling what they already receive in tax breaks.
Chevron and BP are the last two of the Big Oil companies to announce profits.
House Democrats have introduced a bill in the House — bound to go nowhere due to the Republican majority — that would increase the minimum wage to $10. This would give the wage the purchasing power that it had in the 1960s.
Republicans have publicly met the idea of raising the minimum wage with contempt, with Rep. Bill Young (R-FL) even nonsensically telling one constituent who asked about the Democrats’ bill to “get a job.” Meanwhile, thousands of working Americans this week rallied in favor a higher minimum wage.
Conservative opposition to a higher minimum wage hinges on a few tired arguments that ultimately protect big businesses and hurt low-income workers. Here are the favorite conservative myths when it comes to the minimum wage and why there’s really nothing to them:
1) The minimum wage kills jobs. “It’s a classic election-year ploy to make the Democrats look like they’re protecting low-income workers. I think it’s well understood that raising the minimum wage hurts workers on the lower end of the pay scale in that it does kill jobs,” said a recent statement from the U.S. Chamber of Commerce. However, several academic studies have shown that raising the minimum wage does not have a negative effect on employment. In fact, an analysis of state minimum wage increases showed that those state boosting their wage “had job growth slightly above the national average.”
2) Increasing the minimum wage hurts small businesses. Gov. Chris Christie (R-NJ) reacted to a proposal to raise the minimum wage by saying that small business owners are “going to have to lay people off.” However, two-thirds of low-wage workers actually work for big corporations, most of which have largely recovered from the recession and could therefore afford to increase wages. The three largest employers of low-wage workers have all seen large profit increases in the last few years.
3) Increasing the minimum wage only benefits teenagers.Many Republicans argue that raising the minimum wage just hurts teenagers’ ability to gain work experience. But as a new report from the Economic Policy Institute shows, nearly 90 percent of minimum wage workers are 20 years old or older. Plus, “more than a third (35.8 percent) [of minimum wage workers] are married, and over a quarter (28.0 percent) are parents.”
During a debate yesterday between top national security advisers to the Obama and Romney campaigns, top Romney aide Amb. Richard Williamson got peppered with questions about where Mitt Romney would get the money to boost defense spending. Though taking the question no less than four times during the debate, Williamson balked at answering directly, haltingly offering up platitudes, deflecting and dodging.
Debate moderator Marvin Kalb asked Williamson twice successively how Romney would pay for military spending, and followed up again after a Congressional Quarterly reporter asked during the question and answer period. Williamson’s first answer to Kalb was typical of his repeated dodges:
KALB: I don’t know anybody who thinks you can increase defense spending, cut taxes, and do anything about the national debt. So how do you do that, sir?
Obviously there’s a philosophical debate between President Obama and Governor Reagan on the economy — excuse me, Governor Romney and President Obama on the economy. It’s one that the American people are intensely interested in. Governor Romney wants to keep discussing that issue and allow the American people to make a decision. Whether you create growth by more revenue, or — I don’t want to — spending on the stimulus and other things that he would argue are a waste of money, versus trying to support and unleash the private sector for growth.
Kalb then asked how, until the economy supposedly comes around, Romney would get the money in the next few years. Williamson offered to send a campaign economic adviser to discuss the matter, then went back to “philosophical differences.” Later, when CQ asked where the money would come from, Williamson called for “incentives in the private sector,” deregulation, and cutting Obamacare. When Kalb followed up yet again, Williamson cited current economic statistics, blaming the stimulus and Obamacare.
If Romney wants to make good on his vow to increase defense spending by $2.1 trillion, and he also wants to make good on his support for the tax cuts incorporated in the House Republicans’ budget, he would need to cut the rest of the government’s functions — including Social Security and Medicare benefits — by about 14 percent, according to the Center for American Progress.
Short of cutting those popular programs, Milbank wrote, Romney would “need to shut down all functions of the departments of Commerce, Education, Energy, Interior, Justice, Labor and Treasury as well as the National Institutes of Health.”
Mitt Romney embarked on a trip to Europe this week that begins with a stop in the United Kingdom, where Romney will both attend the London Olympics and meet with top British officials, including Prime Minister David Cameron. But being in Europe hasn’t stopped Romney from taking potshots at the continent.
During an interview with NBC’s Brian Williams, Romney warned that America’s current path will make it end up like Europe, which is stuck in economic doldrums (according to a transcript provided by NBC):
BRIAN WILLIAMS: And when Mitt Romney arrives in Washington, how will Washington be any different from the Washington we’ve seen these past few years, which any American will tell you is hopelessly broken, busted?
MITT ROMNEY: You know, all I can say is that I got elected governor of a state that was 87% Democrat. And it was not lost on me that if I went around attacking the Democrat leadership, I was gonna get nothing done and none of my vetoes would be upheld. And I began a relationship with the speaker of the House and the Senate president that was personal. We respected each other. We often disagreed. But we found common ground from time to time. That has to happen. There has to be a president that buries the hatchet and says, “We’re gonna go to work to try and get America on track.” We– we’re at a critical time in this country. If we keep going down the path we’re on, we’re gonna end up like Europe or worse.
This is a common critique that Romney makes, claiming that President Obama is “taking us down a path towards Europe.” However, he conveniently ignores that his policies closely align with the austerity that’s been adopted across Europe, which has unnecessarily blunted economic growth. In fact, the European governments that have embraced austerity the hardest have seen their economies contract the most.
As this chart shows, the U.S. is doing better in terms of economic growth than both the Eurozone and the United Kingdom, where Prime Minister David Cameron has embraced austerity:
The UK has not only contracted for three straight quarters, but the UK economy is now smaller than it was before Cameron’s conservative government came into power. This follows Cameron’s $130 billion of budget cuts, and warnings from Britain’s Chancellor of the Exchequer that further austerity may come after the current package expires. And Romney’s penchant for the spending cuts included in, for instance, the House Republican budget, would likely lead to a similar outcome.
According to data compiled by Bloomberg News back in March, the largest gender gap in terms of pay occurs on Wall Street, where women earn 55 to 62 cents for every dollar that men earn. But that’s not the only way in which Wall Street leaves women behind.
According to research highlighted by the New York Times, women make up more than half of the financial industry’s workforce, but are executives at barely any firms:
The figures tell an alarming story. Women make up more than half of the work force in the financial industry but are chief executives at fewer than 3 percent of U.S. financial companies, according to Catalyst, a New York-based global research and consulting nonprofit focused on women’s career advancement.
Why is Wall Street so slow to promote women? Is that a reflection of U.S. society in general or is there a peculiarity to the Wall Street experience?
Of course, even reaching the upper echelon of corporate America doesn’t guarantee women equal pay, as a female CEO makes 69 cents for every dollar that a male CEO makes. But perhaps Wall Street is shooting itself in the foot by failing to promote women to positions of power, as “several studies have shown that women are more profitable investors, money managers and hedge fund managers, and they incur less risk in the process.”
Welcome to ThinkProgress Economy’s morning link roundup. This is what we’re reading. Have you seen any interesting news? Let us know in the comments section. You can also follow ThinkProgress Economy on Twitter.
The United States may be the lone bright spot for auto sales this year. [CNBC]
The U.S. Department of Agriculture is projecting that food prices will grow faster than other prices in 2012, increasing by 3.5 percent. [Reuters]
European lawmakers are considering making rate-rigging a criminal offense in the wake of the LIBOR scandal. [Washington Post]
“International debt inspectors” began a new round of talks with the Greek government yesterday. [Associated Press]
New home sales fell in June by their largest amount since February 2011, but are still up for the year overall. [The Hill]
The House yesterday approved a bill allowing for a full audit of the Federal Reserve by a vote of 327-98. [The Hill]
Total foreclosure activity rose in the first half of this year, as banks worked through a backlog of delinquent mortgages. [CNBC]
Mitt Romney couldn’t substantially distinguish his economic policies from former President George W. Bush’s during an interview with NBC’s Brian Williams on Wednesday, saying only that he would “take action to get America on track to have a balanced budget.” Bush increased the national debt by trillions of dollars.
Rather than detailing specific differences with the former Republican president — whose deregulatory policies and massive tax cuts have been blamed for the nation’s current economic recession — Romney described his economic approach with his standard to his four-part talking points:
WILLIAMS: And let’s talk about domestic– the economy before we wrap things up. The major planks of your job plan, lower taxes, both corporate and marginal rates, and reduce regulation. Explain how that would be different from what George W. Bush tried to push through?
ROMNEY: Well, let me describe– actually, there are five things that I believe are necessary to get this economy going. One, take advantage of our energy resources, particularly natural gas, but also coal, oil, nuclear, renewables. That’s number one. A huge opportunity for us, and doing so is gonna bring manufacturing back, because low-cost, plentiful energy is key to manufacturing, in many industries.
Number two, trade. I want tre– to dramatically increase trade and particularly with– with Latin America. Number three, take action to get America on track to have a balanced budget. Now those three things, by the way, are things which we have not been doing over the last few years, which I think are essential to getting this economy going again.
Number four, we’ve got to show better training and education opportunities for our current re– workers and for coming workers. And then finally what I call restoring economic freedom. That means keep our taxes as low as possible, have regulations modern and up to date, get health care costs down. These things will restore economic freedom.
So my policies are very different than anything you’ve seen in the past. They’re really designed for an America which has some new resources, energy being one of them, trade with Latin America being another, and the need for a balanced budget now more urgent than ever before.
In April, Alexandra Franceschi, Specialty Media Press Secretary of the Republican National Committee, argued that Romney’s policies are like the “policies of the Bush administration…just updated” — and in some cases they’re even worse. For instance, Romney’s tax cut plan is four times larger than Bush’s, more heavily weighted to benefit the ultra wealthy and he opposes increasing the minimum wage. Romney also supports turning Medicare into a voucher program for future retirees, while Bush enacted a historic expansion of the Medicare program.
The National Labor Relations Board (NLRB) is revisiting a previous decision that denied graduate students who work as research assistants at private universities the right to organize and collectively bargain, drawing protests from prestigious private universities and their allies. In 2004, the NLRB prohibited the unionization of graduate-student assistants at private universities when it ruled that they were students, not employees of the university.
A NLRB regional director ruled last year, however, that some graduate assistants at New York University have “a dual relationship” that is “both academic and economic,” a decision the would make them employees and gave the NLRB an opening to revisit its decision. Private universities opposed that decision and, in briefs reviewed by the Chronicle of Higher Education, said giving labor rights to student workers would undermine the private graduate system:
“It is no exaggeration to state that the future of American private graduate education is at stake in these cases,” argued a brief submitted by Brown University, which faces the prospect of the board reversing a 2004 decision that prohibited the unionization of its graduate-student assistants.
The American Council on Education joined several other higher-education associations in arguing, “Students enroll in graduate school to complete their higher education, not to work for wages. Their relationship with the university is fundamentally one of a student and teacher, not master-servant.”
Brown’s claim that the system “is at stake” if the NLRB decides in favor of the student workers does seem to be an exaggeration, given that graduate student workers at public universities have had the right to organize and collectively bargain for decades, and those schools continue to grow and prosper. (Public graduate students are governed by state labor laws, not the NLRB.)
The ACE’s claim, meanwhile, that students shouldn’t have rights because they are students ignores that these students do, indeed, work for wages, a fact that would seem to grant them an economic relationship covered by labor law. The NLRB has also previously decided that other workers in graduate schools — such as apprentices — are subject to the National Labor Relations Act. Medical residents are also subject to labor law, though the ACE argues that their precedent does not apply because they have already graduated.
“Nobody who looks at the reality of the current university today can argue that graduate students are not employees,” Kate Bronfenbrenner, the director of labor education research at Cornell University, told the Cornell Daily Sun in 2010. “Graduate students are used as workers in the University — they are hired to fill in wherever there are openings. The faculty doesn’t spend time teaching graduate students how to teach — they use them as employees to do the teaching for them.”
The tax cut extension package that Senate Majority Leader Harry Reid (D-NV) brought up for a vote today did not include an Obama administration proposal to reset the estate tax to the 2009 level. Senate Republicans, along with a handful of Senate Democrats — including Sens. Mark Pryor (D-AR), Mary Landrieu (D-LA), and Kay Hagan (D-NC) — balked at including the measure.
The Obama administration’s estate tax parameters already kept all but the nation’s very wealthiest estates from owing any tax at all. In fact, by refusing the increase, the Senate will spend $119 billion, to preserve tax breaks for just 3,200 estates:
This year, the per-person exemption is $5.12 million and the top rate is 35 percent. Obama agreed to those parameters as part of a December 2010 deal with Senate Republicans that also extended expiring tax cuts and created a payroll tax cut.
Under those numbers, which Republicans want to extend, 3,600 estates would pay taxes, or fewer than 0.2 percent of estates, according the nonpartisan Joint Committee on Taxation.
Obama proposed a $3.5 million per-person exemption and a 45 percent top rate, returning to parameters that were in effect in 2009. That would require 7,200 estates, or about 0.3 percent, to pay taxes.
Even under the Obama administration’s proposal, just 0.3 percent of estates would be subject to the estate tax, all of them with estates larger than $3.5 million. Those estates that do owe tax will receive a $1.1 million tax break if the administration’s proposal is not adopted and the estate tax stays at its current level.
Senate Rejects Republican Tax Plan, Accepts Democratic Plan |
The Senate today voted down a tax plan crafted by Senate Minority Leader Mitch McConnell (R-KY) and Sen. Orrin Hatch (R-UT) by a vote of 45-54. The plan would have extended all of the Bush tax cuts — including those on income in excess of $250,000 — while eliminating tax credits that benefit 20 million working families. Due to an agreement with Democrats, the bill needed a simple majority, rather than a filibuster-proof supermajority, to pass. Sen. Mark Pryor (D-AR) was the lone Democrat to vote in favor of the plan, while Sens. Susan Collins (R-ME) and Scott Brown (R-MA) voted against it.
The Senate accepted the Democratic tax plan, which extends the Bush tax cuts for income up to $250,000, by a vote of 51-48.