Year Of Action On Inequality? Ten Days Later, Obama Cuts 8.7 Billion in Foodstamps

 Harlem residents choose groceries at the Food Bank For New York City, Dec. 11, 2013. in New York, N.Y. - John Moore/Getty


On Friday, President Obama added his signature to legislation that will cut $8.7 billion in food stamp benefits over the next 10 years, causing 850,000 households to lose an average of $90 per month. The signing of the legislation known as the 2014 Farm Bill occurred at a public event in East Lansing, Mich.

The food stamp cuts are one component of a massive omnibus bill which also includes billions of dollars in crop insurance and various other programs and subsidies involving American agriculture. Before he signed the legislation, President Obama praised it as an example of bipartisan problem-solving that would help create jobs and move the American economy forward.
“Congress passed a bipartisan Farm Bill that is going to make a big difference in communities across the country,” said the president.

Obama’s remarks also focused heavily on economic inequality, which he has previously called “the defining challenge of our time.” The Farm Bill, he said, would “give more Americans a shot at opportunity.”

When House Republicans originally argued for a food stamp cut of between $20.5 billion and $39 billion, the White House threatened to veto both of those proposals. During his Friday speech, the president did not say whether he was satisfied with the final $8.7 billion figure, or even mention the cuts at all. Instead, he praised the food stamp program and said that the final Farm Bill preserved much-needed benefits.



“My position has always been that any Farm Bill I sign must include protections for vulnerable Americans, and thanks to the hard work of [Senate Agriculture Committee chair Debbie Stabenow, D-Mich] and others, it does just that,” he said.  Stabenow, who played a key role in Farm Bill negotiations, fully embraced the cuts in a speech delivered shortly before the president took the stage.

“This is a nutrition bill that makes sure families have a safety net just like farmers do,” she said. “The savings in food assistance came solely from addressing fraud and misuse while maintaining the important benefits for families that need temporary help.”

Speaking to reporters on Air Force One before the speech, Agriculture Secretary Tom Vilsack made much the same point, saying that the $8.7 billion cut “probably makes the program more legitimate than it was.”

In fact, the benefits reduction would eliminate the state-level “Heat and Eat” policies currently employed in 15 states and Washington, D.C. Left-wing opponents of the Farm Bill, including Rep. Jim McGovern, D-Mass., expect the burden of burden of the cuts to fall disproportionately on the elderly and disabled.

“Poor people are getting screwed by this Republican majority [in the House] and Democrats in my opinion aren’t doing enough to push back,” he said. “I wish there had been more of a fight from the White House and others.”

McGovern also admitted to being “puzzled” by the White House’s silence on hunger and food stamp cuts. He predicted that Republicans’ success in getting a several billion dollar food stamp cut meant that they would soon try again for even more.

“They know they can’t get a $40 billion cut right off the bat, so what they’re doing is they’re chipping away at it,” he said.

Article Source:  Resnikoff, Ned. "President Obama Signs $8.7 Billion Food Stamp Cut into Law." MSNBC. NBC Universal, 01 Feb. 201. Web. 07 Feb. 2014.

U.S. Justice Dept Joins The Target Credit Card Data Breach Investigation

The investigation behind Target’s data breach, which affected 40 million customers and is one of the largest hacking incidents in retail history, just intensified. The U.S. Justice Department has joined the hunt for the perpetrator, which already includes the FBI and the Secret Service, which usually oversees the federal government’s credit card fraud cases.

U.S. Attorney General Eric Holder told the Senate Committee that his office is trying to find the hackers who are responsible for the data breach, as well as anyone using stolen data to commit credit card fraud.

Between Nov. 27 and Dec. 15, credit and debit card numbers from 40 million Target customers were stolen. Then earlier this month, Target said that up to 70 million additional customers also had personal information stolen, including email addresses and phone numbers.

Last week, the FBI warned U.S. retailers to prepare for more data breaches involving the same kind of malware used against Target, which harvests data from point-of-sale systems, including cash registers and credit-card swiping machines.

Target is not the only company affected. Neiman Marcus also said that its data had been breached, with 1.1 million customer cards exposed, and Reuters reports that several other retail chains have also been affected. The FBI said that the malware used, RAM scraping, is becoming increasingly difficult to track down because one variation, Alina, is frequently updated remotely.

TechCrunch’s John Biggs recently wrote a post with more details about the specific form of malware used on Target, which grabs sensitive data from point of sale terminals. Data security expert Brian Krebs found that the version of the software that appeared on Target computers had been designed to hide itself from anti-virus software. He also traced it to a programmer called Antikiller who sold it on hacker forums.

“The accessibility of the malware on underground forums, the affordability of the software and the huge potential profits to be made from retail POS systems in the United States make this type of financially motivated cyber crime attractive to a wide range of actors,” the FBI wrote in a confidential report that was sent to retail companies.

Target’s data breach has far-reaching implications. In addition to the $3.6 billion fine the corporation is liable for, retail companies now have to deal with eroding customer confidence about how they manage their credit card information.

Article Source:  Shu, Catherine. "U.S. Justice Dept Joins The Target Credit Card Data Breach Investigation." TechCrunch. AOL Inc., 29 Jan. 2014. Web. 02 Feb. 2014.

Republicans Just Won the Food Stamp War

Congress is set to approve $9 billion in cuts to the food stamp program even as a record number of Americans live in poverty.

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House Speaker John Boehner (R-Ohio). James Berglie/ZUMA Wire/ZUMAPress

On Wednesday morning, Republicans won a years-long battle over whether to slash or spare food stamps when the House passed the farm bill, a $500 billion piece of legislation that funds nutrition and agriculture programs for the next five years.

The farm bill has been delayed for more than two years because of a fight over cuts to the food stamp program, which is called the Supplemental Nutrition Assistance Program (SNAP). Last June, Speaker of the House John Boehner (R-Ohio) forced a vote on a bill that would have cut $20 billion from SNAP. But conservatives said the cuts were not deep enough, Democrats said they were far too deep, and the bill failed, 234-195. That September, House Republicans drafted new legislation slashing $40 billion from the food stamp program. That billpassed the House with Republican votes only. After months of negotiations with the Democrat-controlled Senate, which wanted much lower cuts of around $4 billion, the House finally passed a farm bill 251-166 Wednesday that contains a "compromise" $9 billion in reductions to the food stamp program.

Both the Senate and President Barack Obama are expected to approve the legislation.

Here's why the compromise level of cuts is a Republican win: In addition to the $9 billion in food stamp cuts in this five-year farm bill, another $11 billion will be slashed over three years as stimulus funding for the program expires. The first $5 billion of that stimulus money expired in October; the rest will disappear by 2016. In the months since the first $5 billion in stimulus funding was cut, food pantries have been struggling to provide enough food for the hungry. Poverty remains at record high levels, and three job applicants compete for every job opening.

And yet, despite the $5 billion in cuts that already happened and the guarantee of $6 billion more, Republicans succeeded in getting their Democratic peers to cut food stamps further. This is the first time in history that a Democratic Senate has even proposed cutting the program. Now the upper chamber is expected to pass cuts twice the level it approved last year.

"It's a net loss for Democrats," Rep. Raul Grijalva (D-Ariz.), co-chair of the Congressional Progressive Caucus, tells Mother Jones. "It's absolutely a GOP win," agrees a House Democratic aide.

How did the GOP do it? In November, Dems said that Boehner was interfering with House-Senate negotiations on the farm bill, rejecting proposed legislation that contained shallower food stamps cuts. (Boehner's office denies this.)

But Dems deserve much of the blame, the Democratic aide says. Last year, House liberals were scheming to get progressives to vote against any farm bill that contained SNAP cuts. The idea was that if enough progressives voted no along with the House conservatives who think the cuts are too low, Democrats could defeat the bill. In that case, food stamp funding would be preserved at current levels. A "$9 billion [cut] is too much…It hits in the gut," Rep. Gwen Moore (R-Wis.) told Mother Jones earlier this month.

When the final bill came up for a vote in the House, the Congressional Progressive Caucus advised its 76 members to vote against the bill. But not enough Dems voted to block the cuts. One hundred three Democrats voted against the farm bill, but 89 voted in favor. If 43 more Democrats had voted no, the farm bill would have failed. "Dems are…complicit in changing [the] law, when they could just [block the bill] and let that status quo continue," the Democratic aide says.

Democrats in the House and Senate agreed to cut nutrition aid for poor Americans because they "have shifted to the right on SNAP politically," the staffer adds. "If Dems were as absolutist as the tea party, this bill would be dead on arrival and SNAP would continue as is."

But the assault on the food stamp program "could have been much, much worse," argues Ross Baker, a professor of political science at Rutgers University. Stacy Dean, the vice president for food assistance policy at the nonprofit Center on Budget and Policy Priorities (CBPP), agrees. Democrats succeeded in stripping many draconian GOP provisions from the bill. Republicans wanted to impose new work requirements on food stamp recipients; allow states to require drug testing for food stamps beneficiaries; ban ex-felons from ever receiving nutrition aid; and award states financial incentives to kick people off the program. None of those measures were in the final legislation, Dean notes.

The cuts to the food stamp program come from closing a loophole that lawmakers on both sides of the aisle agreed needed to be addressed. A household's level of monthly food stamps benefits is determined by how much disposable income a family has after rent, utilities, and other expenses are deducted. Some states allow beneficiaries to deduct a standard utility charge from their income if they qualify for a federal heating aid program called the Low Income Home Energy Assistance Program, even if they only receive a few dollars per year in heating aid. The arrangement results in about 850,000 households getting a utility deduction that is much larger than their actual utility bill. Because the deduction makes these families' disposable income appear to be lower than it actually is, they get more food stamp money each month. The farm bill that passed the House on Wednesday saves $9 billion by closing that loophole.

The savings from closing the heating aid loophole could have been returned to the food stamp program. Instead, Republicans succeeded in prodding Dems to accept $9 billion in new cuts on top of the $11 billion in expiring stimulus funds. That extra $9 billion in cuts means that close to a million households will see their benefits slashed by about $90 a month—enough to pay for a week's worth of cheap groceries for a family of four.

Article Source:   http://www.motherjones.com/politics/2014/01/republicans-won-food-stamps-farm-bill

Congressmen Defend Abusive Payday Lending Industry

In Twist, Attacks Justice Department Investigation

Rep. Darrell Issa (R-CA)

CREDIT: EVAN VUCCI/ AP

The payday lending industry is infamous for providing 12 million Americans each year with short-term loans that end up costing an average of more than 138 percent in interest and fees. But as the U.S. Department of Justices moves to crack down on those lenders who have illegally taken billions from the checking accounts of consumers, two powerful U.S. Congressmen are going to bat for the industry, a letter obtained by ThinkProgress reveals.

Each year, millions incur long-term debt by taking out a short-term loan that’s intended to cover borrowers’ expenses until they receive their next paychecks. Most take out nine repeat loans per year with an interest rate as high as 400 percent. Forty-four percent of borrowers ultimately default, even after paying back their loans several times over, and thus are pushed ever closer to poverty. Critics have called the practice “legalized loan sharking” and describe the industry as “bottom feeders.” In recent years, major banks have also joined in the practice.

In recent weeks, the U.S. Department of Justice began to take aim at the big banks that illegally help payday lenders rip off consumers. “Operation Choke Point” is a massive investigation into whether banks help payday lenders illegally siphon billions of dollars from consumers’ checking accounts in exchange for a fee. Some banks, which offered loans of their own, recently announced they would get out of the payday lending business entirely to avoid a separate regulatory crackdown.

But rather than cheer this consumer-friendly move, two powerful Congressmen are moving to stop it. House Oversight Committee Chairman Darrell Issa (R-CA) and Subcommittee on Economic Growth, Job Creation and Regulatory Affairs Chairman Jim Jordan (R-OH) sent a letter to Attorney General Eric Holder on January 8, accusing the Justice Department of “using its civil investigative power” to “inappropriately target two lawful financial services: third-party payment processing and online lending.”

They wrote:

The Department has consistently stated that its goal is to combat mass-market consumer fraud. However there is ample evidence that the true target of Operation Choke Point is the online lending industry, not actual frauders. Initial press reports of the Department’s investigations support such an understanding.

As their “strongest evidence,” Issa and Jordan cite a press release by one bank that cited inquires that were “part of an industry-wide DOJ investigation” of electronic financial transaction services “provided to payday lenders.” They demand any documents and communications, dating back to 2011, relating to the operation.

Since he became chairman of the House Oversight Committee after the 2010 elections, Issa has consistently used the committee to defend the interests of corporations. In December 2010, he sent a letter to scores of companies and trade associations asking for their “assistance in identifying existing and proposed regulations that have negatively impacted job growth in your members’ industry” and “suggestions on reforming identified regulations and the rulemaking process.” And weeks before that, he promised that if he became chairman, ““I won’t use it to have corporate America live in fear that we’re going to subpoena everything.”

Article Source:  http://thinkprogress.org/economy/2014/01/27/3209121/issa-payday-lenders/