Sebelius Key to Achieving Universal Health Care – National Consumers League

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by Sally Greenberg, NCL Executive Director

Universal health care has long been a top priority for the National Consumers League since our early Josephine Roche, who served as adviser to President Franklin Roosevelt and wrote the first universal health care bill during the late 1930s. Pieces of that legislation laid the groundwork for the Medicare and Medicaid programs.

President Obama pledged throughout his campaign to enact laws to provide that every man woman and child in U.S. has access to affordable, safe, and effective health care. It is unconscionable that the richest nation in the world hasn’t found a way to provide basic care for its citizens. The results of this failed policy are disastrous: 46 million Americans have no health insurance, and an abundance of bankruptcies due to lack of health insurance among consumers who face illness or accident and have to pay out-of-pocket for medical expenses. As many Americans lose their jobs in this difficult economy, and millions of families are added to the rolls of the uninsured, American companies, most notably the auto industry, have to pay $1,000 extra for every car they sell – an expense not borne by their European or Japanese counterparts – because of health care costs for their employees and retirees.

President Obama’s first pick to steer the nation on the path to universal care, former South Dakota Senator Tom Daschle, withdrew his name from the running when it turned out he hadn’t paid an important tax bill. That was a shame, because Daschle, the author of a book that has served as a manifesto on health care reform, knew where he wanted to go. He had the kind of close relationships in Congress required to steer this complicated legislative ship through the minefield that is inevitable as we see special interests fighting over every line in the health care reform bills.

The good news is that the President has nominated Kansas Governor Kathleen Sebelius, who looks to be a friend to consumers. A democrat in a red state (she enjoys a 57 percent approval rating) who casts herself as a “consumer champion,” Sebelius opposed rationed care and rapid hospital discharges as governor of Kansas, declined campaign contributions from industries she regulated while serving as Insurance Commissioner, and in 2002 rejected the purchase of Blue Cross and Blue Shield of Kansas by Anthem Inc, a company based in Indianapolis. Sebelius argued that the sale would result in higher premiums in Kansas, and she won the subsequent lawsuit challenging her decision.

The important thing to know about Sebelius (and a skill that will serve her well in the HHS post) is that she has fought battles to advance the cause of universal health care in Kansas, calling for universal coverage in her 2007 State of the State address, fighting to insure coverage of children 5 and under. She also comes from a political family; her father was Ohio Governor John Gilligan and her father in law, John Sebelius, served in Congress.

As we seek to finally achieve universal health coverage in the United States, this cabinet slot is perhaps more important than any other. I think NCL’s Josephine Roche would be pleased with the choice of Governor Sebelius to guide our nation in its quest to achieve universal care for all Americans (though Roche would no doubt be shocked to learn we hadn’t achieved it in 2009!) – and I think we should be too.

Stimulus to Aid Those Who Most Need It – National Consumers League

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by Sally Greenberg, NCL Executive Director

According to a recent New York Times poll, 55 percent of Americans are earning enough to just make ends meet; 6 in ten of those polled say they fear that someone in their household could lose his or her job in the next year. Sixty percent said the economic outlook is “very bad.” Despite those gloomy numbers, more than 75 percent still said they were optimistic: 55 percent said  they are optimistic about the next four years with Barack Obama as president.

That’s important, because the economic situation is dire, and the President is going to need a lot of wind behind his back to make his new budget – and the stimulus package that goes with it – work for our country.

The stimulus contains badly needed help for those on the bottom rung of the workforce, those who have lost their jobs and need help from an important safety net: unemployment insurance. But it comes with strings attached for any state that accepts the money.

The issue of providing help for those who’ve lost their jobs goes back to NCL’s roots – Florence Kelley, the League’s first General Secretary, advocated for unemployment insurance many decades ago. In 1922, the National Consumers League worked for passage of a bill that provided unemployment insurance in Wisconsin, the first such bill of its kind and did the same over a decade later, testifying in Albany before the New York Legislature for passage of unemployment insurance.

NCL also testified before Congress in the 1930s for federal support for state unemployment insurance. Along with minimum wage and limits on working hours, NCL’s leaders believed that help for those who, through no fault of their own, had lost their jobs, was a critical part of the economic safety net.

However, today, unemployment insurance is not available to everyone who has lost a job. And some states provide such restrictive coverage that those in greatest need cannot get help. So the stimulus law says that states getting stimulus money must extend unemployment protections to low income workers and others previously denied compensation.

To qualify for the first 1/3 of federal aid, the states need to fix eligibility requirements that exclude low income workers. To qualify for the rest of the aid, states have to chose from a series of options that include extending benefits to part time workers or those who leave their jobs for urgent family demands, like domestic violence or a very sick child. The National Employment Law Project or NELP, whose legal co-director, Cathy Ruckelhaus, spoke at the League’s Muller v. Oregon conference held in June of 2008, says that 19 states qualify for some of the federal financing, and a dozen others could become eligible by making some small changes in their eligibility requirements. Workers in the Deep South are the worst off – Louisiana, Mississippi and Texas stand out. Shockingly, some Southern state governors are threatening to reject this federal assistance for their poorest workers because they argue it could lead to new state taxes, among them Governor Bobby Jindal of Louisiana and Governor Mark Sanford of South Carolina. This is a disturbing stance, given the high rates of unemployment in these states.

We agree with the New York Times: “… by dumping billions of dollars into shrinking state unemployment funds, which puts money into the hands of people who spend it immediately on food and shelter, the stimulus could help states through the recession and into a time when unemployment trust funds can be replenished. In other words, the stimulus could make a tax increase less likely.” This federal assistance comes at a critical moment in history and governors should welcome it on behalf of their citizens, not find poor excuses for rejecting funds badly needed by the lowest income workers in their states.

Happy National Consumer Protection Week! – National Consumers League

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Yesterday was the official kick-off of this year’s National Consumer Protection Week, and consumer advocates (at least those not temporarily buried under a rare DC snowstorm) have begun the celebration!

Every year, federal, state, and local government agencies and consumer organizations from across the nation collaborate to bring American consumers timely, important info about consumer issues. This year’s theme is “Nuts and Bolts: Tools for Today’s Economy,” and it’s especially relevant, given how crazy and scary our economy is these days. The organizations and agencies we work with on the NCPW Steering Committee are an awesome group of dedicated consumer educators and advocates, and its their hard work that results in each year’s NCPW!

Whether you are interested in trying to stretch your paycheck, improve your credit history, or tell the difference between a real deal and a potentially fraudulent product or service, information is one tool that can always help you get the most for your money. And the best news is that this information is all FREE!

In celebration of NCPW, we at the National Consumers League have put together a new section at fraud.org about avoiding pyramid schemes (we blogged about this last week) and are working hard to educate consumers on a  wide variety of topics. Stay tuned for more this week about the issues that we think are important to consumers during NCPW — and year-round!

Economic Misery Increases Vulnerability to Pyramid Schemes – National Consumers League

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By John Breyault, Vice President of Public Policy, Telecommunications and Fraud

Millions of Americans are out of work and millions more worried about making ends meet. In the face of this troubled economy, consumers are giving home-based business opportunities more consideration as a way to make additional money. Unfortunately, scam artists often mask their fraudulent schemes as legitimate home-based business “opportunities.” The confluence of bad economic conditions and the proliferation of such scams could be putting many more consumers at risk of falling victim to these fraudulent pyramid schemes.

These are the conclusions of a new survey released today by the National Consumers League, produced in partnership with Opinion Research Corporation. Some of the worrying findings of the survey include:

  • 31% of survey respondents said that they are more likely to consider a home-based business due to the current economic environment.
  • One third of survey respondents couldn’t identify a pyramid scheme as a scam when one was described to them.
  • Low-income Americans could be especially vulnerable to pyramid schemes. Among respondents reporting annual incomes below $35,000, 39% were unable to identify a pyramid scheme as a scam, the lowest percentage among income groups surveyed. Low-income respondents were also the most likely (42%) to consider a pyramid scheme as a good source of supplemental income when it was described to them.
  • Chain letters were the most common kind of pyramid scheme that respondents reported being approached to join (33%), followed by general pyramid schemes (21%), gifting clubs (12%), and Ponzi scheme (7%).

For more highlights from the survey, click here.

To help address the growing threat of pyramid schemes, NCL has launched a new section on our Fraud.org Web site to help consumers identify and avoid falling victim to pyramid schemes, particularly the many scams masquerading a legitimate multi-level marketing plans. We’ve included a scam-spotting checklist that consumers can take with them to the often high-pressure sales “seminars” that are frequently used to lure victims into pyramid schemes, a handy chart comparing pyramid schemes and legitimate multi-level marketing plans, and links to additional information about pyramid schemes.

Consumers who have been approached to join a pyramid scheme or those who may have already fallen victim to one should definitely report the scam via our Online Fraud Complaint Form. These reports are incredibly important to helping federal, state, and local law enforcement and consumer protection agencies take action to help bring scam artists to justice.

If you’ve been a victim, don’t be afraid to report it. You are not alone! In addition to Fraud.org, there are several great forums online, including Scam Victims United and Scamwarners, where victims can network, share their stories, and hopefully avoid becoming repeat victims.

More bad economic news: Recession putting consumers at increased risk of being duped by pyramid schemes – National Consumers League

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February 26, 2009

National Consumers League issuing consumer alert, new resources at Fraud.org

Contact: 202-835-3323, media@nclnet.org

Washington, DC—With nearly a third of Americans saying the current recession has made them more likely to consider a home-based business offer, consumer advocates have issued a warning that fraudulent pyramid schemes disguised as legitimate business opportunities are posing a greater threat than ever to consumers’ wallets and financial health. While “pyramid” and “Ponzi” schemes have received some media attention recently, with Bernard Madoff’s allegedly fraudulent investment scams making headlines, it’s clear that even the most sophisticated consumers are vulnerable to business opportunity scams. Today the National Consumers League (NCL) announced the findings of an Opinion Research Corporation (ORC) survey and launched new resources at www.fraud.org aimed at helping consumers spot and avoid risky business “opportunities.”

Pyramid schemes have existed for more than a century and in a bewildering array of guises. Despite their differences, pyramid schemes tend to share common elements, such as a focus on recruitment of new members, promises of unrealistic or “guaranteed” returns and, most importantly, the inevitable threat of collapse. Increasingly, pyramid scheme operators have tried to cloak their scams as multi-level marketing (MLM) opportunities through the sale of dubious products or services with little or no established market. Legitimate MLM businesses, also known as “networking marketing,” operate legally and offer goods and services through independent distributors. In legal MLMs, the focus of the business is on sales of products, not the recruitment of new members into the business.

In the ORC telephone survey of Americans ages 18 or older conducted February 12-15, 2009, many respondents—particularly African-Americans, Hispanics, and those with low incomes—revealed themselves to be at risk of falling for pyramid schemes disguised as legitimate work-from-home opportunities. Lower-income consumers (those reporting annual income of less than $35,000) were found to be more likely to mistake pyramid schemes for legitimate ways to provide supplemental income (42 percent vs. 33 percent of all respondents). They were also least likely (61 percent), as compared with all respondents (66 percent), to correctly identify pyramid schemes as a scam. Similarly, African-American (46 percent) and Hispanic (48 percent) consumers surveyed were more likely to consider a home-based business than the average (31 percent) yet less able to identify a pyramid scheme as a scam (48 percent and 35 percent, respectively).

Overall, an alarming number of respondents reported being approached to join some type of fraudulent pyramid scheme including chain letters (33 percent), general pyramid schemes (21 percent), gifting clubs (12 percent), and Ponzi schemes (7 percent).

“In a time like this, when many are struggling to make ends meet, some consumers may lower their guard and find themselves considering offers that – under other circumstances – they would rightfully identify as sketchy and high-risk,” said Sally Greenberg, NCL Executive Director. “NCL’s Fraud Center is alerting consumers to use their heads when it comes to searching for new offers of income. Scammers advertise pyramid schemes as businesses that provide ‘easy money’ or ‘guaranteed income.’ Consumers must keep a level head, even when times are tough, and remember the old adage: if it sounds too good to be true, it probably is.”

NCL’s Fraud Center, which tracks consumers’ reports of suspected and confirmed telemarketing and Internet fraud, publishes information about new scams and prevention tips, and forwards reports to appropriate law enforcement in the United States and Canada, has launched a new guide for consumers about pyramid schemes. The new pages at www.fraud.org/pyramids offer tools for distinguishing legitimate business opportunities from scams, including checklists for evaluating home-based-business offers, information about common types of pyramid schemes, and warning signs.

For complete survey results, or to check out NCL’s new pyramid schemes education content for consumers, visit www.fraud.org/pyramids.

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About the National Consumers League

Founded in 1899, the National Consumers League is America’s pioneer consumer organization. Its mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. NCL is a private, nonprofit membership organization. For more information, visit www.nclnet.org.

Survey Methodology

This data is the result of a telephone survey conducted among a national probability sample of 1,006 adults, comprised of 504 men and 502 women, 18 years of age and older, living in private households in the continental United States. Interviewing for this CARAVAN® Survey was completed during the period of February 12-15, 2009.

About Opinion Research Corporation

Opinion Research Corporation, an infoGroup company, has offered innovative solutions to the toughest market research challenges of clients worldwide since 1938. Since the 1960s, ORC has conducted CARAVAN®, the USA’s longest continuously running consumer omnibus. In addition, the firm has been conducting national, speech reaction, state and flash/overnight polls for CNN since April 2006. To learn more, visit www.opinionresearch.com.

Update: Obama’s ‘Blueprint’ Delivered to Congress … – National Consumers League

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by Mimi Johnson, NCL Health Policy Associate

… and by redirecting taxes on the rich, instituting pollution surcharges, and cutting back on such things as farm subsidies, the President hopes to save money and help YOU. By raising taxes on the wealthiest 2 percent of Americans, Obama says he hopes to redirect the nearly $318 billion (over ten years) of increased revenue to the “health care reserve fund.” This fund of over $640 billion would help “finance fundamental reform of our health care system that will bring down costs and expand coverage.”

The budget also “accelerates the adoption of health information technology and utilization of electronic health records,” expands research – both in comparing the effectiveness of medical treatments and to better understand and fight cancer, and ultimately invests in health care infrastructure to help rebuild the health care system. Current government agencies such as the Centers for Medicare and Medicaid Services and the Food and Drug Administration would be strengthened and standards raised.

The federal budget won’t get out of the red anytime soon, though. In fact, the stimulus will send us further into debt, by spending money to employ Americans and rebuild our country, before we start to see an increase in revenue.

‘Blueprint for Our Future’ Includes Health Care Reform Wing – National Consumers League

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by Mimi Johnson, NCL’s Health Policy Associate

President Obama addressed Congress last night in a State-of-the-Union-like speech to prepare them – and the American people – for his forthcoming budget. During the speech, the President addressed three major priorities – energy, education, and health care – as we all try to rebound and rebuild during these tough times.

“So let there be no doubt: Health care reform cannot wait, it must not wait, and it will not wait another year.” Good news for consumers and not a moment too soon, as a new poll reports that a majority of Americans say their family has cut corners on their health care because of the economy. The Administration, however, is working to diminish the health care hardships on families and Obama reassured Americans that unemployment benefits and continued health care coverage will be available to those who have lost their jobs in this recession.

Still, Obama pointed out that health care costs cause “a bankruptcy in America every 30 seconds,” and it causes millions of Americans to lose their homes. Another alarming fact Obama reported was that” premiums have grown four times faster than wages over the last eight years,” resulting in unaffordable care even for the insured.

During his address, the President also promised a renewed commitment to cancer research, preventive care, and a move towards quality, affordable health care for every American. He also plans to “give our veterans the expanded health care and benefits that they have earned.” We were also reminded of two victories in health reform already signed into law this year, which protect and expand health care coverage for 11 million children (SCHIP), and ensure “health care professionals can continue caring for our sick” through the Economic Recovery and Reinvestment Act.

We commend the President and his Administration for “bringing together businesses and workers, doctors and health care providers, Democrats and Republicans to begin work on this issue next week.” The League has long recognized the importance of and strength in convening stakeholders from all sectors to work together on health issues. It is important that Congress and the American people continue to remember that health care costs account for a substantial chunk of the economy, and that we must move forward with reform quickly and deliberately.

FTC Fraud Forum – National Consumers League

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This morning, the Federal Trade Commission will kick off its two-day Fraud Forum, a free two-day event hosted by the federal agency to examine how the FTC can more effectively protect consumers from fraudulent schemes.

As y’all know, fraud protection is near and dear to our hearts over at the National Consumers League. We operate NCL’s Fraud Center, which tracks scams as they’re reported to us by consumers and relays trend information to relevant law enforcement.

The first day of the FTC’s Forum will be open to the public and will provide an opportunity for law enforcement, consumer advocates, business representatives and academics to look at just how big of a problem fraud is in our current economy, what drives con artists to do what they do, how victims are targeted, and whether certain types of consumers are more vulnerable than others, and more. Day Two of the event is open only to law enforcement officials, and they’ll grapple with how they can better collaborate to catch the crooks.

If you’re not planning to attend the forum, you can still be a part of it – the FTC will be streaming today’s panels online. Savvy Consumer contributor John Breyault, who runs NCL’s Fraud Center, will be speaking on a panel about under-reported fraud. Check him out at 11 am here at the Webcast.

Check Us Out! – National Consumers League

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Congratulations are in order for the LifeSmarts state champion teams emerging across the nation! We’re less than two months out from the National LifeSmarts Championship in St. Louis, MO, and around the country, our state coordinators are hosting exciting in-person competitions to determine who will represent their state at Nationals!

LifeSmarts state programs are getting some nice press, too! You go, guys! Here’s a sampling (and a sneak peak at some of the state champs who will be headed to St. Louis in late April)! We’ll link to more as we find them. Way to go, LifeSmarts teens and coaches!

News in Northeastern Wisconsin: Oconto High School 4-peats! Fox6News covered the competition, too! Video here.

Missouri champs declared, beating out 134 (!) other teams

Minot Daily News: “Ray High School’s award-winning Lifesmarts team doesn’t have any slackers.” Cute photo and all!

Reining In Shameful Executive Pay – National Consumers League

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by Sally Greenberg, NCL Executive Director

Congress did it: it capped corporate pay for the first time in our nation’s history. The stimulus package Congress adopted at the end of last week goes further in capping executive salaries than even the Obama administration recommended. Nonetheless, the President has signed the bill into law. The stimulus pay cap applies to top execs and the highest paid employees at all 359 banks that have already received government assistance, according to the Washington Post. Panic has set in among executives; there’s talk of mass exodus among the top brass at companies where pay has been capped.

“That is pretty draconian — $500,000 is not a lot of money, particularly if there is no bonus,” James F. Reda told the Washington Post. Reda is founder and owner of his own compensation consulting firm. “And you know these companies that are in trouble are not going to pay much of an annual dividend.”

Now let’s get this straight. Executives of companies that took on too much risk and saw their firms collapse had to turn to the government for a taxpayer funded bailout – which they readily sought and accepted. Now when the government wants to put strings on that money, the talk is that these same executives, who failed to keep their companies solvent in the first place, will walk away because they need higher salaries – $500,000 isn’t enough for these kingpins even if it is 8 1/2 times the salary of the average American family. (figuring that Americans’ average annual salary is around $61,000) .

Mr. Reda said only a handful of big companies pay chief executives and other senior executives $500,000 or less in total compensation. He said such limits will make it hard for the companies to recruit and keep executives, most of whom could earn more money at other firms.

But the financial world brought this on themselves, with kingpins such as Lloyd Blankstein of Goldman Sachs, who made $68.5 million in 2007, setting Wall Street salary records. Richard Wagoner, the chief executive of failing General Motors, made $14.4 million in 2007 (much of it in stocks and options on a base salary of $1.6 million). (Read more on this from the Wall Street Journal.)

These shameless compensation packages and bonuses are taking place in a year when millions of Americans have their lost jobs and with it, their health insurance. Millions of homeowners are facing mortgage foreclosures, and food pantries are facing unprecedented demand. The rich have seen their incomes grow by leaps and bounds in the last 30 years while the wages of those on the bottom have stagnated. According to Lane Kenworthy, Professor at the University of Arizona, in 1979 household income among those in the top 1% averaged $325,000 (in 2005 dollars). By 2005 that had increased to nearly $1.1 million. Among the poorest 20% of households, average income was $14,500 in 1979 and $15,500 in 2005. Among the middle 60% of households, average income rose from $42,000 to $51,000.

So Congress is understandably reacting to constituent outrage about the pay packages of the top execs. For years policy makers and shareholder activists have tried to figure out how to curb outsize executive pay, with little success. Now they’ve finally done something. We agree with the President, who told NBC Nightly News: “If the taxpayers are helping you, then you have certain responsibilities to not be living high on the hog.”