Big Think

Introducing the concept of choice into our health care system

Public plan option. Three words in the health care reform process about which much has been said - a lot of it meant to stoke fears. Amidst all of the mischaracterizations being thrown around, let's focus on the most important of those three words: Option. As in choice. As in something that isn't common for American families when it comes to their health care. If your family has health coverage through your employer, that certainly brings some peace of mind. But there's still a good chance that only one insurance plan is available to you. If your premiums are high, if you can't choose the doctor you want or if your plan refuses to cover your pre-existing condition, there's little hope for improvement. In recent health care reform listening sessions I held in New Jersey, a top complaint of families who already have health insurance is that their claims keep getting denied. Without any other real options available to them, even families that have health coverage are struggling to get affordable treatment. Meanwhile, if you're not offered health coverage through work and don't qualify for Medicaid or Medicare, then you really have no health insurance choice at all. That's just not right. Setting up a system in which more families have a real choice of health insurance would be tremendously empowering. We can shop around for our car insurance, property insurance and life insurance. Why should our choice be so limited when it comes to the most important insurance -- the one that protects our families' health? Now, if your family is happy with your insurance as it is, you will continue to have it, even if there's also a public option. We have to be very clear about that. If you like what you have, you will keep it. We're not against private insurance; we just want to make it more affordable. Let's not forget that between 2000 and 2007, the premiums for employer-based insurance rose five times faster than average incomes, and between 2008 and 2016, the premiums we pay are expected to rise more than 83 percent. Choice in health care isn't just about allowing families to shop around. It's about making health care better through real competition for your business. A public option would change the way insurers do business. It would keep them honest, in order to keep their customers. That means lower costs for everyone: for individuals, for families, for small businesses. More options would get more people involved, bringing down the share of the cost burden any one family has to shoulder, and reducing the number of expensive emergency room visits that taxpayers have to pay for. In that sense it would promote not just public health care but public health. That's in everybody's interest. If we do it right, I think we're going to see substantial savings from having expanded options -- savings for families and savings for our nation. Amidst all the naysaying we've heard about health care reform, let's remember this basic truth about our nation's health care system and why we must reform it: Millions of Americans are prevented from accessing quality and affordable health care. It's not just the 47 million without health insurance. It's also millions more gainfully-employed Americans whose insurance just doesn't give them enough coverage, enough stability or enough peace of mind. To hear some of my colleagues criticize bold ideas meant to expand and improve health care coverage, you'd think the current level, quality and expense of health care coverage is acceptable. You'd think that keeping insurance companies in charge of your health care rather than doctors is the way to go. I know from my conversations with family after family that this just isn't so. It doesn't matter who you are or where your family lives - if your child has a cough that won't go away, if your husband or wife has a swollen knee, or if you feel discomfort in your chest, you should never be put in the position where concerns about the cost of seeking medical treatment can affect the health of our loved ones. The sooner we can fix health care, the sooner we can get our economy on a stronger footing, create American jobs that won't be shipped overseas, and help all our families rest a little easier. The old saying goes, there is nothing more powerful on earth than an idea whose time has come. With the right leadership in Congress, with President Obama on our side, and with the strong support of millions of Americans, we will make it absolutely clear, in the words we say, in the actions we take and the laws we make, that the time for health care reform has finally come.

June 25, 2009, 2:32 PM

Other Types of Bonuses Deserve an Examination

The well-justified furor over executive bonuses at banks that receive taxpayer money, which has been reignited over the weekend by the reports of AIG bonuses, is rooted in two entirely valid issues. One is the very appropriate concern over the wisdom of these payouts from a business perspective -- Americans have major ownership stakes in these banks and want a return on their investment. The other is something that is even more visceral: It's about a sense of fairness. Families who have had to trim their budgets, tighten their belts and change the way they live just to get by are understandably furious when they see these banks carrying on with business as usual. Because of that, positive balance sheets aren't the only things that would be good to see coming out of Wall Street. There would be enormous substantive and psychological value in seeing bank executives proactively demonstrate that they know we're all in this together, that they too have changed their way of life and that they too can sacrifice in times of crisis. This is why I'm unsettled by the recent reports of banks giving out deferred or creatively-titled bonuses, even as Congress was passing legislation to ban bonuses in banks that receive federal assistance under TARP. A big part of the concern is about whether these payouts constitute misuse of taxpayer money. Banks have argued that deferred bonuses can be kept completely separate from taxpayer money, though it's been said that money moves around like water at these firms. And banks have also argued that "retention awards" will help keep skilled brokers from jumping to a rival firm, though I doubt there are many jobs on Wall Street to jump to these days. But beyond whether or not these payouts make for smart business, I am concerned that these actions merely reinforce the perception that Wall Street will go to great lengths to preserve an out-of-touch way of life, even as it stays afloat on taxpayer money. From a personal perspective, financial institutions have laid off thousands of workers in my home state of New Jersey. It would be comforting to know that their former employers are doing everything they can to get credit flowing, become viable again and start re-hiring -- and it would be comforting to know that that my constituents' jobs weren't lost to save a CEO bonus. I have asked the Treasury Department to examine whether these alternative bonuses violate the letter or spirit of the law. I would think that if the banks believe these payouts to be necessary and productive, they would welcome this examination wholeheartedly. But it's really about more than the legality of these bonuses. It's also about whether banks "get it," even after all the controversy. Do they understand that it seems like they're pulling out all the stops to hang on to the status quo? Do they understand how this looks to families who are feeling a financial squeeze? Do they understand that they are held to a new standard of responsibility that comes with taxpayer money? The answers to these questions would help us understand if the banks are doing what they're supposed to be doing with taxpayer dollars: jump-starting the lending that allows homebuyers to get responsible mortgages, families to get auto loans, students to pay for their education and small business to create jobs and grow the economy. Banks need to show they understand what's going on in this economy -- that if your business is in trouble you can't just go about business as usual, that as families tighten their belts, banks have to tighten the reins on their internal expenses. All across America, this is a time for shared sacrifice. Whether they're using taxpayer dollars or not, banks need to focus their resources on lending -- for the sake of their future and for ours.

March 16, 2009, 11:31 AM

The Importance of Focusing on Credit Card Debt

A quick post of appreciation for Arianna Huffington helping to put the issue of out-of-control credit card debt in the spotlight. The nuts and bolts of why it is such a big threat to so many families and the already-battered economy are fully explained by Arianna (or in my November post). The bottom line is that, more than ever, we cannot allow credit card companies to continue fleecing consumers, or making them feel like it's all one big guessing game. The convergence of over-stretched family budgets, increasing reliance on credit cards just to get by and wild credit card interest rate hikes threatens to put many families into bankruptcy and deepen the economic crisis. I have reintroduced The Credit Card Reform Act -- the strongest credit card holder protection bill in existence -- to prohibit blatantly unfair actions, like unilateral interest rate hikes. The momentum exists to pass credit card reform legislation this year, and I'm optimistic we can get it done soon. One other point to mention: much fanfare was given to new federal regulations curbing certain egregious credit card company practices, announced in December. Although these rules do not cover the full range of tricks and traps that must be ended, they marked a big step forward. The main drawback to the regulations was their late deadline for implementation: July of 2010. Between now and then, far too many Americans could go bankrupt. I wrote the CEOs of the six biggest credit card issuers, urging them to implement these rules as soon as possible for the sake of families facing mountains of debt and for our economy. Five responded, and all but one claimed it was too much of a burden to do it any faster. Their feet should be held to the fire to reform their practices as soon as possible, and passing reform into law would be the most effective way to do it.

February 25, 2009, 7:59 PM

The Gathering Credit Card Storm

Our current financial crisis is a case study in ripple effects. A lot of bad mortgage loans, bad loans between organizations, bad evaluations by ratings agencies and bad oversight by government collectively toppled big Wall Street firms. This caused our credit markets to freeze, leading to business contraction, massive job losses, and deep economic pain on Main Street. First came the crisis over bad paper, now the crisis could get worse because of bad plastic. Consumer credit card defaults are a gathering storm. At the same time it's becoming harder to get new credit, Americans have almost $1 trillion of credit card debt outstanding. Defaults are rising. Delinquencies are at a six-year high. And the credit card debt itself is only part of the problem. While consumers are struggling, credit card issuers haven't let up on some of their most questionable practices, including exorbitant penalties and rate hikes. To make matters worse, just recently several credit card issuers have announced plans to raise interest rates, even for people who've paid their bills on time. We can't afford to watch consumers' finances dragged down by unfair credit card practices. It wouldn't be fair in any situation, but at a time of such national financial turmoil, it's an even bigger threat to our economy. Inappropriately high credit limits, high penalties, and high interest rates have nudged so many people toward bankruptcy in the first place. I've introduced a bill, the Credit Card Reform Act, to give consumers even greater protection from deceptive lending practices. The bill will end the industry practice known as "universal default," so a company can't raise your interest rate if you have a perfect record with that credit card, but miss a payment with some other creditor. It will force fees to be reasonably tied to costs incurred by the company, protect young consumers from card solicitations they didn't ask for, and make sure that when a company offers you a set of terms, they can't change those terms once you've applied for a card. Congress isn't the only body that can act. Following measures that I proposed in the legislation, the Federal Reserve has taken some steps to address this issue. Earlier this year it took action on retroactive rate increases and the amount of time customers have to make payments. It was the right move, but it was only a start. The Fed's rules apply to subprime lending, but don't address excessive fees on the vast majority of cards on the market. Now we're seeing the consequences of limited action. Earlier this week Secretary Paulson announced that the Treasury Department is considering giving tens of billions of dollars to the Federal Reserve to purchase securities based on credit card debt. I'm not necessarily against some kind of direct action, but if the government is going to get involved, it should insist upon a high degree of fairness and protection for the consumer. The Fed should issue guidelines for any credit card company that wishes to participate, prohibiting arbitrary rate increases, unilateral changes to credit card agreements and universal default. Now is the time to act, because, like the debt on our cards, if we keep putting this problem off month after month, it's only going to get worse.

November 18, 2008, 12:01 PM

Bush and McCain: Drilling us into a Deeper Hole

It's hard to imagine that John McCain was too happy today when President Bush echoed his call for drilling up and down our nation's coastlines. He was having a hard enough time trying pass the laugh test when claiming that his plan would have any effect on gas prices anytime soon. Now this over-hyped plan has the stamp of approval from the one person you want to avoid -- a president who is not only an oil man but has also been wrong on just about every issue over the course of eight years. Even without the Bush kiss of death, however, most people could see through this nonsensical idea. To hear John McCain or George Bush talk about it, you'd think that gasoline was going to be pipelined straight out of the ground and directly into your gas tank. But people understand that, in an area devoid of the appropriate infrastructure, it takes a long, long time to build the derricks that would line our shores, along with the pipelines to reach land and the refineries to process the oil. And people also understand that the type of production McCain and Bush are talking about is a drop in the bucket -- or a drop in the barrel -- compared to what this nation consumes. They may sell it as immediate relief at the pump, but what they're talking about is really a decade or more down the road and would amount to maybe a few pennies in savings, according to the Energy Information Administration. Who would think that's worth the wait? Or the economic risk? What John McCain and George Bush are not saying is how their friends at the oil companies are sitting on -- get this -- 68 million acres of unused land leased to them by the American taxpayer. 68 million acres. As we are moving to develop renewable energy, create alternative fuels and boost energy efficiency, that land represents domestic oil and gas production waiting to be had -- only the oil companies are not doing anything about it. I'm an original co-sponsor of Senator Chris Dodd's legislation to penalize the oil companies that leave this type of land unused. Big Oil is looking for yet another government handout by opening up our coastline and the Arctic National Wildlife Refuge for drilling -- it's time that our government stopped bending over backward for oil companies and instead started pushing them to do what they can with the generous resources they have been given. In the long run, this Bush-McCain drill, drill, drill mentality only ends up drilling us into a deeper hole. The continued dependence on oil is disastrous for our economy and toxic for our planet. The economic dangers now and in the future are obvious by just looking at what our reliance on oil is doing to our nation today. Families are pinching every penny so they can drive their kids to school or get themselves to work. With high food prices, some have to choose between putting a gallon of gas in their cars and putting a gallon of milk in their refrigerators. And many families aren't even thinking about flying anymore since gas prices have hit airlines so hard that fares are sky high and checking luggage is $15 a bag. While we look at the critical short-term economic issues related to gas and food prices that matter a great deal to American families, we have to also make sure our planet is healthy for our kids and grandkids. This dependence on fossil fuels does nothing to reduce the carbon emissions that have created our planetary crisis. The longer we put off transitioning from fossil fuels to clean energy, the more severe our weather will get, the higher the oceans will rise and the more damaged the Earth will become. For those of us living in coastal states, drilling in the Outer Continental Shelf presents another serious threat. With oil derricks and pipelines near our beaches comes the prospect of spills like the ones that have devastated the California coast in the past, which is why I introduced the COAST Act to permanently ban drilling on our coastlines. Even if a state government somewhere like my home state of New Jersey would maintain its ban on offshore drilling, the next state over could lift its moratorium, and our coast would be threatened just the same. The millions of people who go to the Jersey Shore this summer and the thousands of business-owners who thrive on the tourism can tell you better than I can how an oil spill would be devastating in many ways. There are so many reasons why the Bush-McCain drilling plan is absurd. There are hometown reasons, like the threat to our beaches. There are national reasons, like the failure to lower gas prices. And there are global reasons, like the future of our planet. In the end, this is a plan that brings relief to oil companies, not American families. John McCain and George Bush just don't seem to get that the future is in a green economy, renewable energy, alternative fuels and energy efficiency, not in oil. But then again, I guess we shouldn't expect anything more from a president who is an oil man and the candidate he supports, who chose to give his big energy and environment speech in Houston, oil capital of the nation.

June 18, 2008, 1:52 PM