Lives Are on the Line in PA’s Medicaid Expansion Debate

By Chris Lilienthal, Third and State

Cover the Commonwealth: Lives on the Line RallyLast week, hundreds of people from across Pennsylvania took the Capitol by storm to put faces to the debate over expanding Medicaid health coverage in Pennsylvania.

The "Lives on the Line" rally featured a number of speakers who talked about the stress of working full-time without health insurance. One woman named Petrina has diabetes, but her employer doesn't offer health insurance. She had to fight back tears as she talked about the struggle to control her insulin. She is understandably terrified.

Mary Lou struggles to get through the days, given that she's needed new glasses for years.

Cheryl from Washington County recently incurred thousands of dollars in ER charges and has no idea how she'll ever pay it back.

And it goes on…

Cover the Commonwealth: Lives on the Line RallyAll of the speakers would have the security of knowing they can see a doctor when they get sick if Pennsylvania opted to take a federal opportunity provided by the Affordable Care Act (ACA) to expand Medicaid coverage in 2014 to adults with incomes up to 138% of the federal poverty line (roughly $32,000 for a family of four).

The federal government will pay 100% of the cost of new enrollees for the first three years—2014, 2015 and 2016—and will cover 90% of the costs by 2020.

Hundreds of thousands of Pennsylvanians will be eligible for health coverage under expansion, cutting the state's uninsured rate in half. Acting on this opportunity will create jobs, strengthen Pennsylvania’s economy, and make its citizens healthier and more financially stable. Get all the facts about the expansion in a new fact sheet prepared by the Pennsylvania Budget and Policy Center (PBPC).

Despite the tremendous upside, Governor Corbett has yet to decide on whether the state will expand, and there are only a couple weeks left before the Legislature breaks for the summer. That’s why the Cover the Commonwealth Campaign (of which PBPC is a member) organized last week’s Capitol rally.

And it was a success, generating good press coverage. The Governor’s office and legislators took notice, and the crowd was fired up. But more needs to be done to keep the pressure on Harrisburg to do the right thing.

You can help by calling your state legislators at 1-800-515-8134 and the Governor at 717-787-2500. Tell them: My name is ___ and I'm calling because Pennsylvania needs to accept federal funding to expand Medicaid. Thank you.

Another Day Older and Deeper in Debt

By Mark Price, Third and State

Last week, the Pennsylvania Senate Banking and Insurance Committee in a narrow vote approved Senate Bill 975, opening the door to thousands of predatory payday lenders to come to Pennsylvania and charge fees on short-term loans that equal an annual interest rate of over 300% on a typical two-week payday loan.

In April, the Consumer Financial Protection Bureau (CFPB), the federal agency charged with reining in the abusive financial practices, released a white paper that examines payday lending. Based on data collected from payday lenders in 33 states, the paper provides a very basic picture of the key characteristics of the people using these products. As Figure 1 below illustrates, the CFPB found that the overwhelming majority (84%) of borrowers have incomes of less than $40,000.  

Figure 1. Income of Payday Loan Applicants 

With incomes this low, the typical customer actually falls farther behind in their bills after using a payday loan – a point we argued last year using data from the Bureau of Labor Statistics’ Consumer Expenditures Survey (CES).

Table 1 shows conservative two-week spending patterns for an average household making $25,000, $35,000, or $45,000 per year. These three family budgets are based on surveys of actual family spending patterns (drawn from the CES) and include expenses such as food, housing, utilities, transportation, and basic health care. They do not include additional costs such as child care, clothing, and previous debts, including credit cards or car loans. 

A borrower who takes out a $300 payday loan in one two-week period must repay the $300 in principal plus $38.22 in interest and fees during that same period. Based on the CES, families earning $25,000 or $35,000 would be unable to make up the cost of the payday loan and meet other basic expenses. These examples demonstrate why the majority of borrowers are repeat borrowers, taking out loan after loan as fees force them to fall further and further behind.

Table 1. Family Budgets and Payday Loans

The Consumer Financial Protection Bureau came to the same conclusion after examining data provided to them by the payday lenders:

However, these products may become harmful for consumers when they are used to make up for chronic cash flow shortages. We find that a sizable share of payday loan and deposit advance users conduct transactions on a long-term basis, suggesting that they are unable to fully repay the loan and pay other expenses without taking out a new loan shortly thereafter. Two-thirds of payday borrowers in our sample had 7 or more loans in a year. Most of the transactions conducted by consumers with 7 or more loans were taken within 14 days of a previous loan being paid back – frequently, the same day as a previous loan was repaid.

Supporters of SB 975 will argue that it establishes a limit of eight “consecutive short-term” loans, which is an acknowledgment that rapid, repeat borrowing is at the core of the payday loan product. But this limitation is effectively meaningless because the bill allows a borrower to simply wait three business days to borrow again, so the eight-loan limit would never really apply.

As the CFPB data make clear in states with laws like SB 975, the typical borrower of what is supposed to be a 14-day loan is indebted for more than half the year. In other words, the typical consumer borrows $350 and ends up paying $457 in just interest and fees in places where these types of products are legal.

High interest and fees plus repeat borrowing are the keys to payday lender profitability and why this product is ultimately harmful to consumers driving some into bankruptcy. 

To paraphrase that old song made famous by Tennessee Ernie Ford

You borrow over and over, and what do you get? Another day older and deeper in debt. 

Why I Won’t Be Coverin the PA Dems This Week

The Pennsylvania Democratic Party is convening Friday and Saturday in nearby Lancaster but I won’t be covering their activities.  A lot of resolutions and business are on the agenda but the powers that be (primarily the corrupt Bob Brady) will block everything once again.  I won’t be there however.  I’m fed up with Democrats violating their national charter by closing public meetings.  I’ve now been kicked out four times including at the last meeting when Fadia Halma evicted me from a By Laws Committee meeting.

In previous Party meetings Jack Hanna has thrown me out of the Southwest Caucus twice and Berks County Chair illegally closed a County Committee meeting and I was told I had to leave.

The DNC national Charter says that ALL Democratic Party meetings are open to the public.  That includes the press.  Closing these meetings tot he press or kicking me out of them is direct violation of their national Party rules.  I’ll no longer spend my time and money going to their meetings simply to be tossed out.  No more.

The By Laws Committee meeting at the last Party conference was very important.  The Progressive Caucus had proposed a by laws change prohibiting County Chairs from unilaterally dismissing duly elected committee people because they don’t agree with their politics, the Democratic candidates they choose to support (in unendorsed campaigns) or because they simply don’t want them.  Philadelphia County Chair Bob Brady and Berks County Chair Tom Herman have both been guilty of such actions.  I left the Democratic Party five years ago because of Herman’s actions against me when I chose to support Mike Morrill for the 126th State House seat against turncoat Tom Caltagirone.

So this by laws change was personal for me and I went to the By Laws Committee to witness and report on what transpired.  Ms. Halma told me the meeting would be closed and I had to leave.  Then Bob Brady killed the proposal behind closed doors.  I presume there was smoke leaking from under that closed doorway.  Doing business in smoke filled rooms continues in today’s Pennsylvania Democratic Party.

Unconstitutional NSA Searches

An unconstitutional search is an unconstitutional search.  The Fourth Amendment is very clear:  the government shall not conduct a search without a probable cause based warrant.  George W. Bush began the warrantless wiretapping of American citizens and we liberals all called for his impeachment.  Barack Obama has continued the practice and possibly expanded it.  These are impeachable offenses.  It makes no difference to me which Party the perpetrator of these crimes is from:  they are high crimes and misdemeanors conducted against the American people and in violation of the constitution.

The Supreme Corporate Court of John Roberts disagrees in its incapacity to properly read the constitution (they are also incapable of understanding the Second Amendment as written).  They claim to be “strict constructionists” except when it suits their purposes not to.  It is impossible for any reasonable person to read and comprehend the Fourth Amendment and approve the actions of the NSA and the CIA.  

Edward Snowden, a real patriot, agreed with this assessment and was appalled at what he saw as both an NSA employee and a consultant for Booz Allen Hamilton.  BAH is a giant private corporation which grew at an astounding rate after 9/11 as President Bush poured trillions into the national security apparatus.  As such Snowden discovered that any analyst with a security clearance could access any and all communications made by any American citizen.  Without suspicion of criminal conduct brought before a Judge for a warrant such eavesdropping and surveillance is unconstitutional.  Bush and Obama have done it anyway.  Bush should be prosecuted and Obama impeached.

For strange reasons though two thirds of Americans have determined they;d rather be safe than free and in a poll support the wiretapping.  Every telephone call, email and internet search is collected and stored in federal databases.  You have absolutely no privacy unless you’re either a Luddite or Amish.  We no longer live in a free society.

This is the magnitude of what The Guardian exposed with documents provided by Snowden who is now running for his life from the American government.  

RIP Frank Lautenberg

New Jersey Senator Frank Lautenberg passed away this morning.  A gentleman and unabashed liberal he championed the Garden State’s poor and working families in Washington.  I met him briefly in last year when he journeyed to West Chester, or, as he humorously termed it, “our western suburbs” to speak outside a Paul Ryan rally.  I recorded his comments that day:

NJ Gov. Chris Christie will appoint an immediate, short term successor meaning Democrats lose yet another Senate seat until a special election is conducted to fill the remainder of Lautenberg’s term (through next year).