In today's On the News segment: President Obama announces an executive order to help five million Americans pay off their student loans; the government is finally cracking down on offshore tax dodgers; Detroit pensioners have finally caught a break - albeit a small one; and more.
Thom Hartmann here – on the best of the rest of Economic and Labor News...
You need to know this. On Monday, President Obama announced an executive order to help five million Americans pay off their student loans. This new action will expand on a 2010 law, which capped loan payments for certain debtors at 10 percent of their income. The earlier law only applied to students who took out federal loans after October of 2007, and who were still receiving loan disbursements on or after October of 2011. The President's new executive order will expand this program to people with older student loans, and it will help those who were formerly shut out of the program. It's great news that five million Americans will get some over-due help with their student loans, but the fact is, they never should have had to take those loans in the first place. Everyone should have the right to an education without leveraging their entire financial future. There is more than $1 trillion in outstanding student loan debt, and default rates keep rising. When students are paying back these loans, they are not paying for homes, cars, and other products. That money is simply being sucked right out of our economy, while the government makes a profit off the backs of people who are trying to get an education. The system is failing students, and it doesn't make a lick of economic sense. Rather than forcing young people into a life-time of debt, We The People should be providing higher education for free at public universities. It's time to guarantee everyone can get an education, and it's time for a debt jubilee that wipes all student loans off the books.
Believe it or not, the government is finally cracking down on offshore tax dodgers. Nearly 80,000 foreign banks and financial firms will begin sharing information on Americans who stash billions overseas to avoid the IRS. Thanks to the Foreign Account Tax Compliance Act, any overseas bank that doesn't comply will face hefty fees on all of their American business. Last week, the Treasury Department released the first list of banks who have chosen to comply with the 2010 law, and more banks are may soon decide to cooperate. Soon, banks in 70 countries will start providing the IRS with the information they need to identify tax cheats. Even countries like Switzerland and the Cayman Islands, both notorious for being tax havens, will participate with US officials under the FATCA. For too long, the billionaires have avoided paying their fair share in our nation. They've profited off of the use of our commons, and our economy, and then hoarded away their cash in overseas accounts. These tax cheats cost our nation billions every year, and it's about time that they be forced to pay up.
Detroit pensioners have finally caught a break – albeit a small one. Last week, the Michigan State Senate passed legislation to use state money to spare Detroit retirees from more pension cuts. The deal will use $200 million of state funds to protect pensioners, and prevent the sale of artwork from Detroit's museum. Although it will prevent more cuts, this legislation does not reverse the cuts that have already taken place, and it won't stop cuts to other services. This deal has more to do with getting the city's 20,000 retirees to agree to a so-called "grand bargain", than it has to do with saving pensions. Detroit's little-dictator, emergency manager Kevyn Orr, is still working to appease creditors, and they're not happy that retirees, instead of banks, were getting a little help. However, retirees argue that their pensions are protected by the Michigan Constitution, and that any cuts to their retirement were both illegal and devastating. Thankfully, pensioners are getting a little relief, but the state of Michigan must do more to protect the people of Detroit.
Several states have tried to subject welfare recipients to drug testing, but that wasn't extreme enough for the state of Georgia. Back in March, that state passed legislation that subjected food stamp recipients to drug screening to be eligible for benefits. Thankfully, last week, the USDA stepped and told Georgia that they couldn't implement that law. In a letter to state officials, Robin Bailey, the regional director of the USDA Food and Nutrition Service, wrote, "Requiring SNAP applicants and recipients to pass a drug test in order to receive benefits would constitute an additional condition of eligibility, and therefore is not allowable under the law." Because food stamps are a federal program, Georgia has no right to treat recipients like criminals. Drug tests are a violation of our Fourth Amendment rights, and there are only limited exceptions when public safety is at risk. Being poor is not a legitimate reason to violate someone's constitutional rights. In state after state, these drug testing measures have cost taxpayers more money than they have saved, and they do nothing more than demonize those who need assistance. The USDA was able to block this law in Georgia, but these measures should not be acceptable in any state.
And finally... While Red states are working hard to disenfranchise voters, one state is trying to get more people to the polls. Last week, Illinois Gov. Pat Quinn announced his support for a same-day registration bill, after that legislation cleared both state houses. This new law will allow voters to register or update their information on the same day they cast a ballot, and similar laws have boosted turnout by as much as 14 percent in an election. Same-day registration actually benefits the very groups that other states are trying to keep from voting. Minorities, low-income Americans, and young voters all participate at higher numbers in states where they can register and vote on the same day. Some states are working hard to keep voter turnout as low as possible, because Republicans know their leverage in election goes up as the voting population goes down. Thankfully, lawmakers in Illinois prefer that everyone who wants to vote has the best chance to participate in our democracy. Hopefully more states will follow their lead.
And that's the way it is - for the week of June 9, 2014 – I'm Thom Hartmann – on the Economic and Labor News.