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Supreme Court Rules in Favor of Trump on Emoluments Cases
Brief #7—Social Justice
By Zack Huffman
The U.S. Supreme Court halted a pair of ongoing emoluments lawsuits against former president Donald Trump on Monday, Jan. 25, noting that the cases stopped being relevant when Trump left office. One of the lawsuits was filed days after Trump’s inauguration in 2017 by Citizens for Responsibility and Ethics in Washington. The suit claimed Trump’s vast business empire, from which he refused to divest, created numerous ways for foreign interests to buy influence over the president.
Biden’s Economic Executive Orders
Brief #107—Economic Policy
By Rosalind Gottfried
In addition to his $1.9 trillion stimulus plan, now being debated in Congress, President Biden has signed a number of Executive Orders affecting the well-being of struggling Americans.
These included a request that the Department of Education further suspend student loan payments to alleviate the burden on debt carrying graduates. He also requested the suspension of evictions and foreclosures on 44 million rental units across the country.
President Biden’s Executive Orders Greatly Strengthen US Commitment to Fight Climate Change
Brief #107—Environment
By Jacob Morton
On Wednesday, January 27, President Joe Biden signed a flurry of executive actions to address the climate crisis by reviving environmental protections dismantled by the previous administration and promoting the creation of new ‘green’ jobs. The orders revive many Obama-era protections and regulations, including a rejection of the Keystone XL Pipeline and the protection of sacred indigenous sites in Utah. Biden’s executive actions go even further still, mandating that climate change be considered in all major decisions of the Federal government, and re-establishing a culture of scientific integrity and evidence-based decision making across all Federal agencies. The President’s executive orders also call for the Federal government to play a larger role in ensuring economic success for communities and individuals affected by an energy industry shift from fossil fuels to renewables.
Who Gets to Decide What Speech is Allowed on Social Media?
Brief #35—Technology
By Charles A Rubin
In the aftermath of the January 6, 2021 riot at the US Capitol inspired by then President Trump, Twitter and Facebook banned him permanently from their platforms for violations of their terms of service. In the days that followed and in the wake of other individuals being prohibited from using those services, many in the right wing camp moved to services such as Parler and Gab. These services were removed from both the Apple and Android application stores and Parler’s servers, hosted in the Amazon Web Services cloud infrastructure, were shut down.
President Biden’s Day One Executive Order Revokes Prior Trump Orders On 2020 Census
Brief #148—Civil Rights
By Rod Maggay
On January 20, 2021 President Joe Biden issued “Executive Order On Ensuring A Lawful And Accurate Enumeration and Apportionment Pursuant to the Decennial Census.” This was the second executive order President Biden signed after being inaugurated earlier in the day. The executive order in Section 5 specifically revokes President Trump’s Executive Order No. 13880 of July 11, 2019 (Collecting Information About Citizenship Status in Connection With the Decennial Census) and Presidential Memorandum of July 21, 2020 (Excluding Illegal Aliens From The Apportionment Base Following The 2020 Census).
President Biden Signs Four Executive Orders Aimed at Racial Equality
Brief #6—Social Justice
By Erika Shannon
On January 20th, Joe Biden was finally sworn in as the 46th president of the United States. In his first week in office, there has been a flurry of executive orders being signed by the new president-elect; some of these are aimed at repairing what Trump may have broken, and others are aimed at making America a better and more inclusive place for all. Of the 24 executive orders signed by President Biden so far, four of them involve promoting racial equality. These four executive orders are comprised of: directing the Department of Housing and Urban Development to “take steps necessary to redress racially discriminatory federal housing policies,” directing the Department of Justice to end its use of private prisons, reaffirming the federal government’s “commitment to tribal sovereignty and consultation,” and combatting xenophobia against Asian American and Pacific Islanders. It is important to familiarize yourself with the executive orders being signed, as they are laying some of the groundwork for Joe Biden’s plans for his presidency.
AMERICANS ON AMERICA: WHAT MY COUNTRY MEANS TO ME
Brief #3—Americans on America
By Linda F Hersey
Yemer Augilar ( Son of Guatemalan Immigrants ) – Safety is the most important value for them; living in a California community where they are not threatened by gang violence and can help provide the basics for their siblings here, as well as their mother back in Guatemala. Jaime Aguilar left his wife, children and the only home he had known to make a new life in America, without the entrenched poverty and threats of violence that were all too common in Guatemala. After 15 back-breaking years working menial jobs, Aguilar saved enough money and processed the needed paperwork to bring his three children to his adopted home of California.
Outlook for Covid-19 Vaccines in School Communities
Brief #53—Education
By Emily Carty
Vaccines have been required or recommended in schools for decades now. The CDC urges families to vaccinate their children against chicken pox, measles, and a handful of other illnesses in order to protect their own children as well as the general public. While this is just a recommendation, all 50 states have some laws in place requiring students to be vaccinated against certain diseases and in certain situations. For example, the state might require students of public schools to have certain immunizations while students in private schools are exempt. Nevertheless, there are ways to circumvent these requirements with medical, or in some cases, religious or philosophical exemptions. Forty-five states have religious exemptions, and 15 have philosophical exemptions — California, New York, Maine, Mississippi, and West Virginia only have medical exemptions.
Yemen and Cuba- 2 Foreign Policy Challenges for the Biden Administration
Brief #104—Foreign Policy
By Brandon Mooney
With Pompeo and Trump’s State Department now a thing of the past, the Biden administration has turned to the long, arduous task that has faced every incoming administration throughout American history: the review and either reversal or preservation of foreign policies. However, the Trump presidency was anything but typical, and it has left behind a complicated legacy that will take serious time and effort to sift through. This legacy is only made more difficult by the feverous, diplomatic equivalent of a closing sale that occurred in the final month of the Trump presidency. Two items of particular interest are the declaration of the Yemeni Ansar Allah, or Houthis, movement as a foreign terrorist organization and the designation of Cuba as a state sponsor of terrorism. “Terrorism” has become a loaded and dangerous label that comes with justifiably serious repercussions and should not be taken lightly. This brief will discuss whether these designations were called for, and whether they should be maintained.
Nuclear Proliferation in the Year 2020
Policy Summary:
Perhaps the gravest danger of nuclear proliferation today is the invisibility of the problem. As it stands, the United States officially has about 5800 nuclear weapons. Russia has about 6400. China has about 300. Six other states possess nuclear weapons; several others may be attempting to acquire them.
And yet the days of the Cold War are long gone. No more shelter-in-place drills, no more hiding under desks, no more fallout shelters. Culturally, the threat and fear of mass nuclear violence have largely dissipated—aside from occasional flare-ups surrounding “rogue states” like North Korea, or broad fears of nuclear terrorism. But all said, the risk of nuclear conflict is as serious as ever—perhaps the most serious it has ever been, given the lack of public awareness of the problem, modernization and proliferation of weapons, the caliber of the leaders currently in power, and the crumbling international framework for managing arms control.
To begin with the last point: a long series of nuclear arms control agreements began in the early days of the Cold War. This notably included the Limited Test Ban Treaty, the Nuclear Non-Proliferation Treaty, the Intermediate-Range Nuclear Forces Treaty, and numerous others—some between the United States and USSR, and some with an international framework.
The limitations of the treaties have been clear. The Nuclear Non-Proliferation Treaty was never ratified by India, Pakistan, and Israel, all of which ultimately acquired nuclear weapons. The central premise of the treaty—that non-nuclear states would not pursue development of nuclear weapons, as nuclear states pursue eventual disarmament—has not been met with any serious progress towards disarmament by the major nuclear weapons states, the United States included.
Perhaps more urgently, landmark agreements between the US/USSR (and later Russian Federation) have been allowed to expire, or have been abandoned. The 1972 Anti-Ballistic Missile Treaty, which limited anti-ballistic missile capabilities between the two states, lapsed in 2002, when the Bush Administration exited the agreement. The Intermediate-Range Nuclear Forces Treaty was abandoned by the US, then Russia, in 2019. The last remaining US-Russia nuclear weapons treaty, New START—signed in 2009—may expire in 2021, largely due to the unwillingness of the Trump Administration to renew it.
A related issue has been modernization of the nuclear arsenals. In the United States, this began as a $1 trillion plan under the Obama Administration, and includes submarine, bomber, and missile upgrades, as well as new deployments of so-called “low-yield”—and thus, theoretically more “usable”—nuclear weapons. Russia has also pursued modernizations, including hypersonic weapons.
Finally, it ought to be noted that smaller but potentially apocalyptic nuclear flash points remain, such as between India and Pakistan. Both are nuclear states with regular border clashes and aggressive—and particularly in India’s case, extremely nationalistic—governments. Other states, like Iran, do not currently have nuclear weapons, but may be on the path to acquiring them.
Analysis:
The United States is not the only international actor when it comes to nuclear proliferation, but it is by far the most significant. The US remains the only nation ever to have used a nuclear weapon in war. Despite ongoing American decline, its status as a superpower, and the enormity of its arsenal, necessitate American involvement in serious international efforts to reduce proliferation. Ideally, this would involve bilateral arms control agreements with Russia, a halt to American nuclear modernization plans, some sort of multilateral mediation at specific conflict sites (including a real defusing of tensions with states like North Korea), and a true move towards nuclear disarmament.
Of course, the Trump Administration has repeatedly demonstrated that it regards international diplomacy as, at best, a nuisance. Trump has personally demonstrated an erratic fascination with nuclear weapons and his administration has shown an utter lack of interest in any efforts to reduce nuclear proliferation. Indeed, its policies in Iran have significantly heightened the probability of that country developing nuclear weapons. Relatedly, there is evidence that Saudi Arabia is potentially pursuing nuclear weapons, possibly with US assent.
To address this, it must be kept in mind that American unilateralism as regards nuclear weapons has been a largely bipartisan policy with a long history. It was the Bush Administration that exited the ABM, and the Obama Administration that agreed to an enormous modernization of the nuclear arsenal. That said, much of the effectiveness of arms control in the past was also broadly bipartisan, and more importantly, instigated by mass public pressure. If the current path is to be altered, the urgency surrounding eliminating nuclear weapons must be renewed.
Resources:
- https://kingsbayplowshares7.org — Members of the Kings Bay Plowshares 7 are due to be sentenced for a non-violent, anti-nuclear action—dating to 4/4/2018—during which they entered the Kings Bay Naval Submarine Base to stage an anti-nuclear protest. Read about the case and donate at the links above.
- https://www.armscontrol.org — “The Arms Control Association, founded in 1971, is a national nonpartisan membership organization dedicated to promoting public understanding of and support for effective arms control policies.”
- https://thebulletin.org — “The Bulletin equips the public, policymakers, and scientists with the information needed to reduce man-made threats to our existence.”
Welfare Demand Peaks During the Pandemic
Out of work for a year, Gail Doffifild of California said that the pandemic has put her job search on life support. Doffifild, a former substance abuse counselor, relies on public assistance to meet basic needs for housing and food, a first in her lifetime.
Along with business closings and job programs on hold that delay employment, a nationwide surge in new welfare applicants is creating bureaucratic delays for all recipients at local welfare offices.
On a recent weekday at noon, Doffifild queued up outside her local welfare office to talk with a caseworker for a few minutes using a phone bank inside. “I’m having to wait like everyone else for the help I need, said Doffifild, who is in her 50s.
Across the U.S., welfare offices report that the record demand for public assistance by new and returning recipients has yet to subside since the pandemic started in early spring.
- More than 12.5 million American adults were unemployed in September, according to the U.S. Bureau of Labor Statistics. Many are turning to local welfare offices for help
- Likewise, a record number of Americans have applied for food stamps in 2020. From February-May, the number of Americans receiving food stamps increased by 17 percent to 43 million.
HEALTH SAFETY CONCERNS AT WELFARE OFFICES
The Families First Coronavirus Response Act — which expired Sept. 30, 2020 — allowed states to relax welfare and food stamp rules to meet the special need for assistance. Food stamps are based on a USDA estimate on the costs to maintain an adequate and healthy diet. In 2019, the most recent statistics available, a family of three was eligible for up to $505 per month in food stamps. The Families First Coronavirus Response Act authorized states to provide emergency supplements to food stamps that raised limits on how much assistance could be provided. The Act:
- Eased eligibility rules for food stamps;
- Raised the amount of food stamp benefits by 15 percent individuals can receive;
- Increased emergency benefits from three to seven months;
- Increased school meal benefits for income-eligible students.
STAYING FLEXIBLE TO THE NEEDS OF UNEMPLOYED AMERICANS
A newly released study by The Center on Budget and Policy Priorities, a nonpartisan research institute, describes as “unprecedented” the demand for food stamps, also known as SNAP, since special emergency legislation, in the form of disaster relief, was enacted by Congress in March 2020.
“The far-reaching health and economic effects of COVID-19 and widespread business closures to limit its spread have made it even more difficult for many low-income households to afford food, and data have shown a sharp increase in the number of families reporting difficulty in affording adequate food and other basic needs. SNAP is essential to helping these families put food on the table, according to the Center on Budget and Policy Priorities.
The center is urging the federal government to extend emergency welfare relief and remain flexible to the needs of Americans experiencing record unemployment. Lawmakers are poised to do just that.
EMERGENCY WELFARE ASSISTANCE AWAITS FINAL PASSAGE
Lawmakers have included an extension to emergency food stamp benefits in new legislation known as the Heroes Act, which addresses a range of unemployment and job loss issues resulting from the pandemic.
The Heroes Act, which passed in the House in May, continues an emergency increase of 15 percent in food stamp amounts through September 2021, averaging about $25 per person more per month. The legislation has yet to advance to a final vote in the Senate. The bill puts a special focus on ensuring that income-eligible children continue to qualify for benefits, even during school closings and remote learning from home.
The influential Washington, D.C., political newspaper, The Hill, published an editorial this month urging the Senate to adopt the new legislation.
“In the few days left before senators head back to their states, they should immediately pass the updated HEROES Act, not only because families need it to survive, but also because it could spare children engaged in the juvenile justice system damage to their health, education and mental wellbeing,” The Hill stated in the Oct. 7, 2020, editorial.
Resistance Resources
- Understanding Food Stamps and How to Apply
Primer is a first step to learning about food stamps, including whether you and your family may be eligible.
https://www.usa.gov/food-help
- The Center on Budget and Policy Priorities
The Center on Budget and Policy Priorities has made recommendations on extending food stamp and special assistance during coronavirus pandemic. https://www.cbpp.org/research/food-assistance/states-are-using-much-needed-temporary-flexibility-in-snap-to-respond-to
- Families First Coronavirus Act
The Families First Coronavirus Response Act provided temporary new authority and broad flexibility for the Agriculture Department (USDA) and states to adapt the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) to address the current public health emergency. The act expired Sept. 30, 20220.
https://www.congress.gov/bill/116th-congress/house-bill/6201/text
- The Heroes Act
The $1 trillion Heroes Act addresses job loss and provides economic assistance including additional welfare funding. The act is close to final passage and in committee in Congress.
https://www.congress.gov/bill/116th-congress/house-bill/6800
- The Hill.com
The Hill is an influential digital political newspaper published in Washington, D.C. It is owned by News Communications, Inc. Here is an editorial published in October urging passage of the Heroes Act, which in part extends emergency welfare assistance due to the pandemic.
https://thehill.com/opinion/civil-rights/520044-the-senate-must-pass-the-updated-heroes-act-to-protect-justice-involved
Corporate Elites Strike New Oil with the Federal Reserve Bank
POLICY
The Federal Reserve has made an unprecedented policy change: the Fed is now directly intervening to support corporate credit markets. To do so, it has established two facilities: the Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCF). The SMCCF has been actively purchasing corporate issued bonds, loans, and exchange-traded funds (ETFs).
Why?
Overall, the corporate bond market has seen rapid growth since 2008, going from $5 trillion to about $9.6 trillion in 2019. The balance sheets of many larger corporations are debt heavy and the revenues to service that debt have shrunk since the onset of the COVID. In turn, bond ratings have plummeted, many to junk status, and that forces rates higher. The Fed is stepping in to provide much needed liquidity which they propose will keep operations and employment at pre-COVID levels. Over a six-week period, the SMCCF purchased bonds from 500 large companies.
A disproportionate quantity of those bond purchases have been directed at oil and gas conglomerates: about 10% of the Fed’s corporate bond portfolio. In fact, this industry has issued a record amount of new bonds, $129 billion this year alone, according to Bloomberg, most of it issued since the Fed’s purchase program was initiated. 19 of the largest oil and gas companies have been recipients. Outside this industry, a total of $455 billion in corporate debt has been issued.
This includes household giants such as Procter & Gamble who issued $5 billion worth; Coca-Cola added $6.5 billion in bond debt; Apple raised another $8.5 billion while Oracle had a $20 billion debt offering. While the Fed has stated its intervention is intended to stabilize employment, there are no such requirements to prevent layoffs. One analysis showed that a third of companies with the largest bond debt participation have announced sizable worker layoffs.
In June, Fed Chair Jerome Powell testified to Congress that “the intended beneficiaries of all of our programs are workers.”
The petroleum industry has been dramatically impacted by the drop in consumer gasoline demand. The resulting “price collapse” at the pump has left many oil firms unable to service existing debt – much of it used pre-COVID to purchase smaller firms. Bankruptcy looms over many in the industry: 30 percent of the shale sector is “technically insolvent.” Smaller firms financed with private equity are teetering.
As finances for the industry began to unravel, lobbying efforts went into high gear. U.S. Sen. Ted Cruz, R-Texas alongside 10 Republican colleagues issued an influential plea to Mnuchin and Powell in the form of an April 22 letter. Citing the recent downgrading of debt to junk bond status, the letter said, “We face a real and present danger of seeing hundreds, if not thousands of oil producers shuttering, an event that will profoundly and negatively impact the industry, its financial partners and consumers for years to come.”
Then there are the “inside lobbyists” like Interior Secretary David Bernhardt who had represented Big Oil for years. We have Energy Secretary Dan Brouillette whose career included senior posts with Ford Motor Co. and who had served on the Board of a Louisiana agency that oversees leasing of state lands to energy companies.
In spite of the new policy and rescue efforts by the Fed, industry layoffs followed suit. “We have to be simpler, more streamlined,” remarked Shell’s chief executive, Ben van Beurden, in response to another round of layoffs. “We need to be a more competitive organization, more nimble and able to respond to customers.” In a similar vein, Marathon Petroleum issued pink slips to 1000 employees which were intended to “strengthen Marathon Petroleum for short-term and long-term success.” Royal Dutch Shell, another bond purchase recipient, plans to trim its headcount by 9,000.
ANALYSIS
A number of factors have contributed to the financial stress amongst oil corporations. Prior to plummeting demand, Russia and Saudi Arabia were engaged in a price war and this was followed by a brief glut due to the U.S. fracking boom. Many firms, including those non-oil beneficiaries like Boeing corporation, turned down federal CARES Act funding and chose to increase liquidity through bond issuance. Of note, CARES Act funding came with strings attached: executive compensation was restricted.
Furthermore, a recent report revealed that 383 large firms whose bonds were purchased by the Fed paid dividends to their shareholders. Sysco Corporation is a typical example: they laid off a third of its workforce while paying out shareholder dividends. Other bond purchase beneficiaries, like Tyson Foods, were found guilty of labor and environmental violations. The fact that 15% of the Fed’s corporate bond holdings are issued from large banks raises questions similar to the bailout terms during the 2008 financial meltdown.
The administration’s leanings are summed up in this Trump tweet: “We will never let the great U.S. Oil & Gas Industry down.”
Vocal critics include Alan Zibel, research director of Public Citizen’s Corporate Presidency Project who points out that “when consumers take on too much credit card debt, they can be forced into bankruptcy and face financial ruin. But when the oil and gas industry accumulate too much debt, it gets a bailout on the backs of taxpayers.” The administration is accused of issuing bailouts for industry friends and loyalists, and to those who are harming rather than helping our environment.
While this bond buying program is favorable to the Fortune 500 – municipalities, small businesses, and individuals are offered more restrictive loans at higher rates. Sarah Bloom Raskin, a former top Fed and Treasury official, wrote that this program effectively protects wealthy bond holders from losses, offering them “all the upside that comes with a junk bond, but none of the risk that, before now, made it, well, junk.”
Resistance Resources:
- https://prospect.org/ devoted to promoting informed discussion on public policy from a progressive perspective.
- https://www.politico.com/ strives to be the dominant source for news on politics and policy in power centers across every continent.
- https://www.bondbuyer.com/ the only independent information resource serving the entire municipal finance community.
- https://som.yale.edu/ to educate leaders for business and society.
How To Identify And Respond If Illegal Armed Militia Groups Show Up At Polling Booths To Act As “Election Observers
Policy Summary: During the weekend of September 19, 2020, Fairfax County, Virginia was conducting an in – person early voting event when a large group of President Trump supporters arrived on the scene. A number of reports have said that the pro – Trump group was there to try and intimidate voters and create a climate of fear to persuade other voters to not come to the polling booth location.
On September 29, 2020 during the first presidential debate between President Trump and Democratic nominee Joe Biden, President Trump told supporters “to go into the polls and watch carefully.”
And in a number of other incidents, President Trump has praised armed caravans that clashed with protesters in Portland, Oregon, defended 17 year old Kyle Rittenhouse for the murder of two people and praised a number of armed vigilante groups, most recently a group that appeared in Idaho.
The U.S. election for President, congressional members and a number of state officials will be held on November 3, 2020.
Policy Analysis: Due to the frequency of incidents where the President has praised armed vigilante groups and statements that the 2020 election is ripe for fraud and calls for his supporters to “observe” the election, Georgetown University School of Law has compiled a fact sheet on the legality of armed militias in all fifty states and what can be done if a voter is confronted with an “armed observer” at an election site on Election Day.
First, the fact sheets from Georgetown definitively state according to the law in each state that armed militias are illegal in all fifty states. There is no exception despite the fact that certain segments of society believe that groups can collectively arm themselves and offer law enforcement services.
Militias were originally conceived as organized groups called forth by a state or federal authority to defend the state or the country. However, groups that have formed without the authority of a state or federal authority are considered an “unorganized militia” and are expressly prohibited by every state in the Union by their state laws. With the number of armed groups that have come forth and been in the news lately it is safe to say that they did not form with the authority of a state or federal government and are therefore illegal.
But that hasn’t stopped President Trump from publicly admiring these illegal groups from afar and giving them encouragement. Just the presence of the groups alone makes them in violation of the law but it is the encouragement from President Trump and his attempt to link their “protective activities” to the integrity of the upcoming election that is cause for high concern. The appearance of these “armed groups” will not make the conduct of any election or a polling booth any safer. On the contrary, roving bands of armed groups will only serve to suppress votes and intimidate voters into not coming to a polling booth because of fears of violence. Rep. Maxine Waters (D-CA) even stated that these groups are specifically targeting minority communities of color and low – income communities in order to suppress the votes from those voting blocs. The political tactics of encouraging these armed groups to “safeguard society” mirrors the techniques that were so often used in the racist Jim Crow South to prevent blacks from voting.
With the information compiled by the Georgetown University Law School on illegal armed militias and possible voter intimidation tactics in the coming election, voters now have at their fingertips info into how to spot these groups and what steps can be taken if these groups appear at a polling site. Some situations listed in the fact sheet to watch for are non – law enforcement people acting like law enforcement, questioning voters and even turning some people away. Armed people who are not law enforcement officers cannot do this and are simply trying to instill fear into voters, as was the case with the group of Trump supporters in Fairfax County, Virginia last month. This does not have to happen and with the state – by – state information provided by Georgetown Law School the tactics used by these illegal groups and encouraged by President Trump can be prevented from having a role in the upcoming election. LEARN MORE, LEARN MORE
Engagement Resources:
- Georgetown University School of Law – infopage on danger of private paramilitary group with link to state – by – state factsheet on how to identify and report on illegal armed groups on election day.
- Election Law Blog – blog on voting rights and voter intimidation issues.
This brief was compiled by Rod Maggay. If you have comments or want to add the name of your organization to this brief, please contact Rod@USResistnews.org.
The Corruption of Operation Warp Speed
Operation Warp Speed is the Center for Disease Control’s project to develop a coronavirus vaccine in record time. It is the most ambitious undertaking by the US government since the Manhattan Project. A vaccine against Covd-19 is paramount towards putting an end to the pandemic and returning the country to a sense of normalcy. Also, like almost every other endeavor in the Trump administration, Warp Speed has been plagued by politicization and potential conflicts of interest.
The CDC’s vaccine initiative was announced in April. It got off to a predictably rocky start. Rick Bright, vaccine expert and former head of Biomedical Advanced Research and Development Authority, was originally the head of the project. Shortly after it began, he was reassigned to a parallel position in the National Institute of Health. Bright filed a damning whistleblower complaint which alleges he was pulled from his job, in part, due to resistance of ‘’promoting potentially dangerous drugs marketed by those with political connections.’’ He also warned against the anti-malarial drug, hydroxychloroquine, for treatment against the coronavirus. Upon submission of his complaint to the Inspector General’s office, it was found to warrant investigation. The IG recommended reinstating Bright to his previous role pending their findings. He was not.
Bright’s replacement, Moncef Slaoui, is imminently qualified, having spent the last three decades developing vaccines and overseeing such large scale projects. He also has serious financial conflicts of interest. Beginning in the late 1980’s, Slouvai worked at GlaxoSmithKline, one of the contractors working to develop a vaccine. He also served on the board of Moderna, another pharmaceutical giant involved in Warp Speed. When installed in his post, he resigned from Moderna’s board and sold off $10 million in the company’s shares. In a flagrant flouting of ethics rules, he refused to do the same for the nearly $12 million in stock of GSX, saying ‘’that’s my retirement.’’ The Trump administration has classified him as a contractor, which subjects him to less stringent ethics rules than are typical of government employees. His compromise was a pledge to donate any gains made on the stock to cancer research. It is a toothless clause in his contract. Slouvai may retain any gains made on the stock, which he has an interest in promoting, until his death or the death of his wife.
Similar ethics issue exists for three top advisers on Operation Warp Speed. Tevia Pharmacueticals and Pfizer are both contenders in the race to develop a coronavirus vaccine. Tevia’s former CEO and two former executive’s of Pfizer finds themselves in leading roles in the government’s effort. Each has filed the necessary disclosures to serve on the project, but retain a financial stake in successful efforts of their former employers. Like Slouvai, each has made vague, and seemingly unenforceable pledges to donate any gains made on the stock in the aforementioned companies.
The result of potential profit motives and the administration’s continued politicization of the pandemic has been to help undermine public trust in the safety of a forthcoming vaccine. According to a Pew Research Poll conducted in September, only 21% of adult respondents would ‘’definitely’’ get a Covid-19 vaccine, compared to 42% in May. The same survey found that 77% of Americans believe a vaccine would be released before its safety and effectiveness are fully understood. Declines in public trust can be seen across the board regardless of race, gender, education and political leanings. It seems to be one of few issues in public polling where Americans are trending near-unanimously in the same direction.
One could hardly blame them. Trump has intentionally misled the public on the coronavirus from day one. His interview with Bob Woodward confirmed as much. His myriad deceit has been amplified and echoed by the cacophony of his sycophants. The former assistant secretary of Health and Human Services, Michael Caputo (he of no medical training) posted a bizarre rant on Facebook, where among other allegations, he accused CDC scientists of sedition. From the outset of the pandemic, the government’s messaging has been a tug of war between hard science and political considerations.
Anthony Fauci has stated repeatedly that a relatively effective vaccine, in conjunction with continued mask-wearing and social distancing are imperative in the country’s battle with the coronavirus. Wearing masks is still inexplicably contentious issue. Large, unprotected gatherings (like the Rose Garden announcement of Trump’s Supreme Court nominee), continue to take place with troubling regularity. After that event President Trump himself, several of his close advisors and colleagues and 2 US Senators have come down the with the coronavirus (Trump has been hospitalized.) The corruption of Operation Warp Speed is emblematic of these factors which serve to prolong and compound the nation’s Covid-19 woes.
Education in the time Covid — Part 4: Higher Education
The spread of Covid through our universities has several implications in addition to the life-threatening effects of the virus itself. College campuses are experimenting with various methods of teaching, housing, and addressing Covid in their student and staff populations. Because there is no one-size fits all plan, colleges are following the guidelines of their state — or not — to determine the best course of action while trying to stay afloat financially without increasing the virus’ spread. Universities are facing financial strain due to diminished enrollment and inability to sustain typical channels of revenue. On top of that, students’ financial needs are increasing due to the impact of the pandemic on families in general, which is particularly devastating for students who already have greater financial needs.
A recent study from the National Student Clearinghouse Research Center estimates that undergraduate enrollment for the Fall semester has dropped nearly 3.9 percent, with community colleges and rural universities having the steepest drop. This is concerning with regard to equity and access in higher education, as community colleges serve more low-income and racially diverse student bodies, so a decrease in college enrollment could have long-term effects on Black, Latinx, Indigenous, and low-income communities. Those who already have financial barriers to college and who aren’t able to access higher education in the coming years could potentially be left out of the changing economy of the future — increasing the wealth gap even further.
Since March 13, there has been a decrease in FAFSA (the federal financial aid program) applications, nearly 100,000 fewer students applied for financial aid, indicating that many low-income students who would have normally applied for aid are opting-out of college this year. Rural and small towns have had the greatest decline in FAFSA applications. Additionally, the US Census Bureau found that students with families making under $75,000 a year were twice as likely to cancel plans to attend college.
With increasing student loan debt over the last decade and dreary projections for universities’ revenue, it is possible that tuition will in fact increase. This possibility is troublesome for rising student debt, leading some universities to take steps to mitigate this effect by freezing tuition so that students can stay enrolled and complete their degrees.
While this is concerning for the future of all students, the financial security of colleges is also at stake. With a decrease in enrollment certainly comes a decrease in tuition — however, as NPR reports, other revenue sources such as campus dorms and sports programs will be absent for many colleges this year, driving further deficits. For example, Syracuse University has already posted losses of $35 million, University of Michigan projects $400 million to $1 billion, and Pennsylvania State University System expects losses of $100 million. Additionally, many small private colleges with small endowments, who traditionally attract first-generation and lower-income students, will be facing deep revenue declines in the coming years, and some have already closed. This will help to fuel the disparity between elite private colleges, and smaller private colleges — leaving students to opt for public university systems or no college at all.
Some colleges are struggling to stay afloat, yet Harvard and its counterparts have recently posted endowment returns in the billions. The cushion that old, private, and capital-rich universities sit on only deepens the divides in the university system, which disproportionately impact less wealthy students.
Over the course of the pandemic, colleges have been making headlines with virus numbers increasing and a rapid spread to the greater local communities. Despite UNC at Chapel Hill shutting down after a week of in-person classes, and universities in Georgia deciding to remain open with thousands of cases throughout the state, other universities such as Cornell and Northeastern are taking precautions so they can remain open or open sooner. Namely, mass testing, diluted dorm rooms, and hybrid classes are keeping the numbers lower, but the struggle to keep infection rate down is ongoing and could change at any moment.
A group of researchers recently estimated that there were 3,200 new Covid college cases per day during the first two weeks of the fall semester. This is alarming because with each new case comes community spread and a chain of virus transmission. Moreover, the impact that small, rural colleges have on the economy of local communities could also be factored into a college’s decision to reopen — many people who rely on students to drive commerce and rent properties will be facing financial strain as long as they stay closed. But allowing students to return has in some cases increased community spread, so there is a delicate balancing act to perform in order to keep everyone safe and financially secure.
With all this in mind, students and families are now considering how much money the traditional college experience is worth. Remote courses might be better for some students and families, but does that mean tuition should decrease to account for the lack of the college experience? Concerns around financial aid will be different this year as well — as the FAFSA will use 2019 tax returns, aid packages won’t consider changes in a family’s situation due to Covid, so there is an extra burden on students and families to navigate more bureaucracy in order to pay for college.
With tuition costs looming over an uncertain financial situation for many students, some student activists are taking action by protesting, filing lawsuits, and threatening a tuition strike. While many colleges aren’t budging, it is notable that Georgetown, Princeton and Northwestern University have responded by reducing fall tuition by 10%.
In a recent letter to the House of Representatives, the American Council on Education on behalf of 45 higher education organizations urged legislators to pass at least $120 billion in aid to higher education in order to “partially mitigate the challenges that students and institutions are facing.” In response to universities’ increase in costs, the $46.6 billion initially requested has proven to be not nearly enough.
A new House Proposal allocates $39 billion for higher education, a far cry from the $120 billion in estimated need. Nevertheless, the bill would disburse $27 billion for public colleges, with states focusing on schools with more Pell Grant recipients to ensure money goes where it is most needed.
With safety at the forefront, colleges have an uncertain path going forward. What is clear is that funding is needed to address the gap in wealth that disproportionately affects individuals from low-income families and colleges that serve low-income communities. Unless there is a concerted effort to save these institutions and encourage students with barriers to entry to still pursue college, we could potentially see the past decades of work to address equity in higher education begin to fall apart.
Resistance Resources:
- National College Attainment Network — NCAN works to empower communities to close equity gaps in attaining postsecondary education. Visit their advocacy center to write letters to your Congress Members and get informed about relevant state and federal legislature.
- Partners for College Affordability and Public Trust — This nonprofit works to make affordable college a reality for all students. Check out their action center, their research on college tuition and flow of money, and their database of officials who determine tuition and fees in higher education institutions across America.
- American Council on Education — A member organization that convenes university leaders across the country, ACE is very involved in federal policy discussions around higher education. They provide a platform for higher education leaders to connect, discuss issues, and take action, in addition to providing detailed resources on higher education policy and activism toolkits.
- National Association of Student Financial Aid Administrators — NASFAA performs research and policy advocacy to remove financial barriers and create equitable access to postsecondary education. Check out their action center to send letters to your senator, share your story as a student or educator, or find out how and where to volunteer to support better access to and more robust funding for college student tuition.
Sources:
- Politico – Florida Governor Criticizes Universities
- Inside Higher Ed – Covid in Counties with Colleges
- Inside Higher Ed – Covid and Colleges — update
- Washington Post – Enrollment Down
- NPR – Colleges Under Financial Strain
- New York Times: Covid College Case Tracker
- US Census – College Students
- Marketplace – Low-income College Students
- National College Attainment Network – FAFSA decrease
- Politico – Covid Campus Success
- New York Times – Fafsa
- Boston Globe – Harvard Endowment
- Inside Higher Ed – Financial Toll of Colleges
- Education Dive – House Proposal for Higher Ed
- Times Higher Education – Covid Cases linked to College Reopening
- Reuters – Student Activists Address Tuition
- ABC – New House Bill
- Forbes – Covid and college Tuition
- Chronicle – Covid Testing Success
Updates on Senate Races in Kentucky, Montana, Michigan
As we return to the senate we see several races that have seen a significant rise in funding in recent weeks. The death of Justice Ruth Bader Ginsburg has left democrats reeling and rallying around many close senate races, especially in Kentucky, where Senate Majority Leader Mitch McConnell is in an incredibly tight race with challenger Amy McGrath. McGrath won a close primary against Charles Booker, a more progressive candidate who is Kentucky’s youngest black lawmaker. McGrath faces an uphill battle in a typically red state, but with the donations piling in and the backlash that McConnell is facing could form a perfect storm for McGrath. Recent polls show McConnell’s lead shrinking to 7 points and several insider reports indicate that McGrath is a leading receiver of donations since the death of RBG. It won’t be easy for McGrath, but it’s bound to be a closer race than polls indicate, and it will likely come down to mail-in ballots.
In Montana, which is a race we examined earlier this year, the race between incumbent Steve Daines (R), and former governor Steve Bullock (D), is coming down to the wire. Daines has seen his lead shrink to just 1 point in recent polls from the New York Times/Siena College, via fivethirtyeight.com. Bullock has seen his campaign receive a large portion of funding from ActBlue, a left-leaning PAC, coming his way after his race was indicated as one that could flip the senate. Daines has also faced some fire from his constituents after he tweeted that he believed that President Trump should go ahead with his nomination of Judge Amy Coney Barrett after the death of Justice Ruth Bader Ginsburg. In all likelihood a Daines vote to confirm Barrett will be one of his last acts as a Senator, as we believe that Bullock will continue his upward trend to win this race.
Back in Michigan, things are only looking up for incumbent Gary Peters, who has extended what was once a close polling lead to 7 points, according to Public Policy Polling. Peters was seen as the favorite to retain his seat, and the recent upheaval regarding a new Supreme Court justice has pushed Peters into a comfortable lead in his race. Peters’ opponent, veteran John James, has run for Senate once before, losing to Debbie Stabenow in 2018. James is an ardent supporter of President Trump, which is one of the reasons that he will likely lose the race. We expect Peters to cruise to an easy victory, which will all but secure a blue Senate come next January.
As election day approaches, we at USResist News want to remind everyone to do their civic duty and to vote. Vote early, by mail, or at the polls on election day, whatever way is easiest and safest for you and your loved ones. We promise to have continuing coverage of the races that will be coming down to the wire that will shape the future of our nation.
How the Supreme Court Impacts the Economy
Policy
The Supreme Court has an enormous influence on economic policy though this association is not commonly made. For example, the rights and well-being of the working and middle classes can hinge on the opportunity to unionize. This right suffered a blow in a 2018 Supreme Court case, Janus v AFSCME (American Federation of State, County, and Municipal Employees). The so-called “right to work,” was upheld by the court in a 5 to 4 decision restricting unions from the collecting “fair share dues. Prior to the decision, a union could take a “fair share” of the dues from the employee, without their consent, to cover the cost of collective bargaining. This ruling applies to persons who are in a collective bargaining unit but have not joined the union, since they benefit from the union contract. They can be applied only to collective bargaining.
In a 5 to 4 decision in June 2018, the court negated the fair share mandate saying that collecting fees from non-consenting employees violated the First Amendment rights guaranteed by the Constitution. Prior to that decision twenty two states had fair share provisions and 28 were “right to work” states barring collection of fair share monies. The decision voided the fair share mandates. The dissenting opinion, written by Elena Kagan, cited protections in the 1977 ruling, Abood v the Detroit Board of Education, which stipulated that fair share dues could only be utilized for collective bargaining which benefited all employees. She asserted that the ruling allowed the judiciary to intervene in economic and regulatory policy while weakening the unions.
With the current court poised to get another Trump appointment, the 6-3 conservative majority it would represent can do a lot of damage and, with the relative youth of the newer judges it could be sustained for decades. According to the Bloomberg report, the current nominee Amy Coney Barrett, represents positons to the right of Chief Justice Roberts. The fear is that the Court will overturn the Chevron Deference which maintains that federal agencies can interpret laws they administer as long as they are “reasonable.”
In the past, Anton Scalia supported the Chevron Deference, at least in the earlier part of his tenure, arguing that Congress intended to delegate authority and that the courts should uphold that perspective. Now that interpretation of Congressional intent is considered problematic and the judges are favoring seeing the laws as they are written. Flexibility in agency administration allowed the EPA to interpret the Clean Air Act to permit regulation of carbon emissions. The new court would halt the authority of agencies to interpret policy.
Analysis
These two examples indicate the great impact the court can have on workers, businesses, and the economy. Unionization is at an all-time low with 33.6% of government employees belonging to a union while only 6.2% of private workers are unionized. Nonunion workers average about $1500 less in salary and have to bargain for benefits. In 2010, Wisconsin Governor Scott Walker signed Act 10 into law that significantly gutted the effectiveness of public employee unions, including the most state and most municipal workers as well as the teachers. Teacher’s salaries fell an estimated 2.6% and their benefits dropped by 18.6%. Walker successfully faced a recall vote in 2011 over the crisis in public unionization.
Learn More
- https://www.epi.org/publication/supreme-court-decision-in-janus-threatens-the-quality-of-public-sector-jobs-and-public-services-key-data-on-the-roles-these-workers-fill-and-the-pay-gaps-they-face/
- https://www.bloomberg.com/opinion/articles/2020-09-24/trump-s-supreme-court-nominee-could-be-good-for-economic-growth
- https://www.theatlantic.com/politics/archive/2018/06/janus-afscme-public-sector-unions/563879/
- https://money.cnn.com/2017/11/17/news/economy/wisconsin-act-10-teachers/index.html
Resistance Resources
- https://aflcio.org/about-us/our-unions-and-allies the largest umbrella organization of union and union affiliates.
Trump EPA Refuses to Ban Pesticide Shown to Reduce IQ and Infant Brain Development
Policy
The Environmental Protection Agency under Donald Trump has released a new assessment of the pesticide Chlorpyrifos, claiming the current science is inconclusive as to the amount of exposure necessary to be harmful. Chlorpyrifos is an organophosphate pesticide typically used on crops, animals, and buildings, to kill various pests, including insects and worms. The chemical has been used extensively in grape, almond, soybean, and particularly strawberry production. It acts on the nervous systems of insects by inhibiting the acetylcholinesterase enzyme.
In 2015 the Obama administration announced it would ban chlorpyrifos citing studies by the EPA warning of the chemical’s potential to make farm workers sick and impede brain development in children. However, in 2017, before the ban could be enforced, the EPA Administrator at the time, Scott Pruitt, reversed the decision, igniting a legal uproar. The EPA was ordered by a federal appeals court to make a final ruling by July 2019 on whether to ban Chlorpyrifos. Upon that deadline, Andrew Wheeler, now EPA Administrator, announced the agency would reject the petition to ban the pesticide, questioning the significance of the data around the chemical’s neurological impact on young children. Despite the agency’s continued rejection of a ban, the EPA is required by law to review a pesticide’s uses at least every 15 years, and with another legal case pending in the U.S. 9th Circuit of Appeals, the agency will be due to deliver a new final ruling on the use of Chlorpyrifos in about two years. Meanwhile, the EPA says it will make an interim decision this October.
Preceding the interim decision and final ruling, while pending legal cases loom from a dozen environmental and labor groups demanding an immediate ban, the EPA released this September, a new assessment of the dangers associated with the use of Chlorpyrifos. The report concludes that “Despite several years of study, the science addressing neurodevelopmental effects remains unresolved…. With respect to effects on the developing brain, very little is known about the duration of chlorpyrifos exposure needed to precipitate adverse effects in the developing brain.”
Analysis
Some farm groups have defended the use of Chlorpyrifos, claiming the chemical has been a safe, effective, and versatile tool for protecting their crops since 1965. The EPA’s new assessment of the pesticide points to Oregon strawberry growers who have been particularly reliant on Chlorpyrifos for controlling symphylans, a pest that feeds on the plant’s roots. However, it should be noted that many certified organic strawberry growers throughout the country use a combination of alternative management practices to control symphylans and other pests, such as solarizing field soils with tarps, flooding fields, compacting growing beds, and incorporating cover crops. They prevent pest outbreaks naturally by maintaining optimal soil and plant nutrition throughout the growing season and establishing a balanced farm ecosystem.
The EPA’s assessment does acknowledge that Chlorpyrifos can have a negative effect on neurodevelopment, and even identifies “concerns about dietary exposure to chlorpyrifos and to pesticide handlers,” mirroring the same concerns expressed by the EPA back in 2015. However, the agency claims the risk of exposure to residential communities is “negligible,” and argues that there is insufficient data to definitively say what level of exposure is dangerous.
Many in the scientific community dispute this claim, pointing to several epidemiological studies, including one from Columbia University, showing “a correlation between prenatal exposure to chlorpyrifos and developmental disorders in toddlers,” such as lower birth weights, lower IQ’s, and higher risk of autism. The EPA’s recent assessment, however, has rejected those findings, citing a lack of access to the raw data of those studies. Spokesman for the EPA, James Hewitt, said in a statement that the agency “remains unable to verify the reported findings” of the Columbia study (despite having been supported by other peer-reviewed studies), deeming its findings inconclusive. This move by the EPA suggests that the agency may be unofficially adopting its proposed “secret science” regulation, aiming to reject or give less weight to scientific studies that do not (or cannot) publicly release their underlying data.
As previously reported by Lisa Friedman at the New York Times, “This controversial policy would eliminate many studies that track the effects of exposure to substances on people’s health over long periods of time, because the data often includes confidential medical records of the subjects.” Trump’s EPA has used this same argument to justify weakening restrictions and rejecting bans on other toxic chemicals and pollutants, such as perchlorate (a water contaminant tied to fetal brain damage) and asbestos, despite repeated objections from agency scientists. The EPA has not finalized or officially adopted the “[secret science] regulation that would officially restrict using such studies in decision-making, but the chlorpyrifos assessment suggests it has moved forward in applying it.”
EPA officials claim they have been prevented from independently assessing the findings of the Columbia University study, by not being provided the study’s raw data. Lawyers supporting a ban on Chlorpyrifos say researchers from the Columbia University study “were willing to show their data to agency officials in a secure location but have not released the information publicly because of privacy concerns.”
EarthJustice attorney, Patti Goldman, criticized the EPA’s new assessment of the pesticide, saying, “Ignoring the demonstrated harm to children doesn’t make chlorpyrifos safe. It shows a commitment to keep a toxic pesticide in the market and in our food at all cost.” Earthjustice has also accused the administration of “fudging the data” in the new assessment, to reach its preferred conclusion. Erik D. Olson, senior director for health at the Natural Resources Defense Council, said of the EPA’s report, “This shows that EPA has completely abandoned any commitment to protecting children from this extremely toxic chemical when their own scientists recommended twice to ban it. The science is being overridden by politics.”
California, New York, Hawaii, and other states have enacted their own bans and restrictions on the use of Chlorpyrifos. Corteva, the world’s largest manufacturer of the pesticide, says it has already ended production of the chemical. Entomologist Allen Felsot of Washington State University claims the use of chlorpyrifos is in decline, and notes, “The market tends to take care of a lot of this.” The EPA’s Draft Ecological Risk Assessment and Revised Human Health Risk Assessment of Chlorpyrifos will be open to scientific review and public comment once the Proposed Interim Decision is released this month. Both documents will remain open for review and comment for 60 days.
Resistance Resources
EarthJustice
- Behind nearly every major environmental win, you will find EarthJustice. EarthJustice’s legal work has saved irreplaceable wildlands, cleaned up the air we breathe, and fueled the rise of 100% clean energy. It has protected countless species on the brink of extinction, and secured long-overdue, historic limits on our nation’s worst polluting industries. https://earthjustice.org/
Natural Resources Defense Council
- Works to safeguard the earth, its people, its plants and animals, and the natural systems on which all life depends. Combining the power of more than three million members and online activists with the expertise of some 700 scientists, lawyers, and policy advocates across the globe to ensure the rights of all people to the air, the water, and the wild. https://www.nrdc.org/
Union of Concerned Scientists
- The Union of Concerned Scientists is a national nonprofit organization founded more than 50 years ago by scientists and students at the Massachusetts Institute of Technology. UCS uses rigorous, independent science to solve our planet’s most pressing problems. Joining with people across the country, UCS combines technical analysis and effective advocacy to create innovative, practical solutions for a healthy, safe, and sustainable future. https://www.ucsusa.org/
Sources Cited
- Friedman, L. (2020, September 23). EPA rejects its own findings that a widely used pesticide harms children’s brains. Retrieved October 02, 2020, from https://www.sun-sentinel.com/news/nationworld/ct-nw-nyt-epa-pesticide-chlorpyrifos-20200923-mehfao7iivatbmtswxhtb4ncgy-story.html
- Jenkins, D. (2020, September 24). EPA releases new assessment of chlorpyrifos. Retrieved October 02, 2020, from https://www.capitalpress.com/ag_sectors/research/epa-releases-new-assessment-of-chlorpyrifos/article_c2869bd2-fdef-11ea-8216-c72882240bbb.html
- Reed, G. (2020, September 25). EPA Chlorpyrifos Assessment: A Harbinger of Restricted Science Rule Havoc. Retrieved October 02, 2020, from https://blog.ucsusa.org/genna-reed/epa-chlorpyrifos-assessment-a-harbinger-of-restricted-science-rule-havoc
- U.S. Environmental Protection Agency. (2020, September 22). EPA Takes Next Step in Review Process for Insecticide Chlorpyrifos, Making Draft Risk Assessments Available. Retrieved October 02, 2020, from https://www.epa.gov/pesticides/epa-takes-next-step-review-process-insecticide-chlorpyrifos-making-draft-risk-assessments
The Dismal Future of Public Pensions
Policy Summary
Many workers opt for public sector jobs lured by generous pensions and other benefits such as healthcare and leave time. Private sector work may offer higher salaries and some benefits but they are much less likely to offer guaranteed defined benefit retirement plans. These refer to a guaranteed payment, often for life, based on formulas computed with age and years of service. Contributions are made from the employees’ salaries as well as by the agency. These pensions are guaranteed untouchable by states laws which protect their future. If revenues fall, the employers must absorb the risk and contribute more to compensate for the shortfalls. In the public sector 77% of employees enjoy defined benefit pensions in contrast to only 13% of private sector workers. The situation is different in counties and municipalities which become vulnerable to some reductions if they enter Chapter 9 bankruptcy. In defined contribution systems, the employee and employer pay into the system but there is no guaranteed payout and the employee assumes the risk. More companies are shifting to these programs and government may follow this path, too.
Economists have been sounding the alarm, for years, regarding the shortfall or gap between pension obligation and available assets. This is true in all pension plans, to a greater or lesser extent, from small local entities to the California state employee system, Calpers, which services 1.6 million employees. Economists have been warning pension administrators of demographic shifts leading to the decreased contributions from contracted workforces paired with growing numbers of retirees. The pandemic has accelerated this change leading to greater deficits from unemployment and revenues lost when businesses shut down. State and local pensions have seen a loss of one trillion dollars since mid-February. California, for example, has seen a loss of 69 billion dollars in their 404 billion dollar portfolio, compounding a shortfall already predicted by the state budget offices. Overall, estimates suggest an immediate state revenue gap of 650 billion dollars. Although state pensions are predicted to be stable, due to law and political pressures, some localities such as Detroit, were forced into reducing payouts as a consequence of Chapter 9 bankruptcy restructuring. Experts have been cautioning pension planners to shift form high yield to conservative investments but these warnings have gone unheeded. In 2019, state and local pensions averaged a 71% funding level but this is predicted to decrease to 62.7% in a healthy recovery and 55.5% in a sluggish one. Many entities have relied on “gimmicks” such as short term loans, tapping reserves, and/or deferring some costs to cover their obligations. Ultimately, these will exacerbate the problem by delaying a longer term solution.
Policy
Suggestions regarding changing investment patterns to solidify the available assets and minimize risk are rational but unlikely to meet the need of the changing ratios of active workers to retirees. It is possible that future public sector employees will not be offered defined benefit pensions. In recent years, increases in pensions and healthcare costs have been favored by unions as these benefits are not subject to income taxes though they are severely impacting government budgets. Some states are closing their pensions to new workers while others are increasing the employee contribution. In Kentucky, a state with a steep shortfall, teachers are now contributing 13% to their retirement, twice as much as their social security payroll tax. Other states, such as Illinois, have added a 3% tax compounded annually, an amount which exceeds inflation. Other remedies have been doubling the gas tax; tripling the real-estate transfer tax; increasing car registration; increasing car metering costs; legalizing and taxing marijuana; and instituting a property fee which is levied on all entities including schools and churches. These actions have cost the state some of its population.
Increased employee contributions to public systems are feared to discourage people from entering the public sector as teachers, firefighters, law enforcement, or agency workers. Post-pandemic restructuring of government agencies is predicted to reduce the number of public employees, further cutting into available revenue. The federal government should be providing aid to ailing states and local governments but it not moving in that direction. Mitch McConnell (R), the Senate majority leader has stated that Congress should move to allow state bankruptcy rather than depend upon federal aid. The short sighted management of pension funds was already putting these at risk prior to the pandemic. Now the issue is accelerating and attention should be turned to redesigning government polices with regard to pensions, social security, and employment.
Learn More
- https://www.nytimes.com/2020/04/02/business/coronavirus-public-pension.html
- https://www.usatoday.com/story/money/2020/06/04/coronavirus-pensions-retirement-covid-19-state-local-budget-markets/5198176002/
- https://theconversation.com/covid-19-will-turn-the-state-pension-problem-into-a-fiscal-crisis-139262
Resistance Resources
- https://www.aarp.org/entertainment/books/bookstore/money-work-retirement/info-2016/retirement-survival-guide.html A guide to retirement planning, especially important for those who do not have a defined benefit.