Author: Bill Egnor

Welcome to part three of this series. I am writing about the process of bankruptcy from the inside for a couple of reasons. First, it is so mind numbing and overwhelming that I have to do something. Since I write, well, that is what I do to get things straight in my own head. The second reason is the more important one, the hope that having some record of this experience out there will help someone, anyone, who has to go through this process in the future. If you are interested in how Liz and I got here and what going and talking to the lawyers is like you can find those installments at the links below:

My Bankruptcy – An American Story 1
My Bankruptcy – An American Story 2

This installment has a lot of personal stuff, so if that is not to your taste, you can probably skip this one. One of the things I have found with this process is how easy it is to get frozen; to find yourself with many things to do in order to get the process going and finished by being completely unable to face it.

The Nuns used to say that procrastination is its own punishment, you suffer while you avoid your work, then you still have to do the work. This is exactly where Liz and I find ourselves. We start to work on it, then find that any other work is more compelling. Do a little work and then its “Oh! I think the grout in the second bathroom needs to be cleaned” or “This book shelf would really be better if it was alphabetized” or “Who wants to clean out the gutters?” Anything at all to avoid this.

Strangely one of the hardest things we have had to do up to now is go through all our possessions and put some kind of value on them. The standard you are supposed to use is what would you pay for this item at a garage sale? I can’t speak for others but this standard is killing me. I don’t shop at garage sales, to start with, but the real thing that gets me thinking I need to clean the gutters is that I keep imagining that I am seeing all our possessions out on the lawn with bargain hunters pawing through it.

I always thought I was pretty detached from my possessions, they are just things, they are not family members or even pets, they are merely material possessions that can and will be replaced. Yet, I seem to be morning for them, even as I go through the process that will save them from being taken away from me. It is completely nuts, but then this process seems (at the moment) to be a series of flash-bulb moments of barely controlled insanity anyway.

Let me give you a little example. As a result of the Bankruptcy Reform act, you now have to take a credit counseling course before you can file. I have always been of two minds about this; it is a an indignity and it slows down the process of getting out from under the crushing weight of debt that someone filing bankruptcy has. On the other hand, it is worthwhile to give folks who, for whatever reason, have gotten so deep into debt that they need to have those debts forgiven some reminders of techniques that might help them prevent this in the future.

In any case it is what it is, it is a requirement and Liz and I have to go through it no matter what. We got a list of companies that do this counseling. Which is a bit of scam. You see the services are free, but if you want the certificate (suitable for framing or sending to the court) you have to pay a fee for it. Okay, that little bit of sophistry is annoying but a business does need to make money, so it is a minor psychic wound.

What pours salt in it is that we go to one that is local and on-line and what do we find in addition to this mealy mouthed shell game about costs? Down in the corner of the website a little box that says “Search the Bible. Enter the Bible Passage, keyword or topic you want to find”. The second thing that jumped out at me was the fact that it should be “Biblical” not Bible Passage. The first was that there is even such a thing on a website for bankruptcy.

While I guess that there are some Christian folks who are going bankrupt that might find this comforting, the rest of us are out of luck. As an atheist this is like having a thumb stuck in your eye. I don’t need anything more stressful right now. Still I am a total curious kind of person, so I entered bankruptcy in the search engine. No results found. Apparently the Christian god is agnostic on bankruptcy.

Needless to say we are not going to use that service. But going back to putting a value on our stuff (see how adverse I am on this, I digressed for 200 words in my own article just to avoid thinking about it!). There is a twenty-one page form we have to fill out about our property. In it you list what you have, if it is owned by one or other of you or is community or joint property. You list your share of the ownership, the amount of equity and if you think it is going to be exempt (I am sure the lawyer goes over that part before it is entered for the court). You also put in your market value.

Maybe we are going at this wrong because we are such nerds, but for home furnishings we have compiled the list of everything in the house and are trying to figure out what we would pay for it if we found it on someone’s lawn some sunny Saturday morning. What is our 18 year old leather coach worth? It is nicked and a little dry but it is still functional and comfortable enough for the den where it sits. How about the bedroom set we bought with my first project bonus? It all matches, but is also used and the veneer is missing in a couple of small spots. Is that worth $500? $300?

One of the things which seems unfair about this process is that some of the folks (Liz and I maybe, probably) are not very good about paying the right amount of money for possessions. It has to be part of how people get to this point, so making them put a value on these things seems like a good way to get an inflated value, doesn’t it?

All this is very frustrating, which leads to the other problem that has been cropping up. Liz and I have had a few arguments. I know that sounds pretty mild, but we are (usually) as simpatico as two people can get. All of these arguments are over stupid stuff, they have to be since the real cause is stress. We get loud, we say make crappy arguments based on flawed logic and emotion. Then one or the other of us leaves to take a walk. When they come back it is race to see who gets to apologize for being an asshole first. That’s the good part, but the bad part is that we are having these fights at all. This is a time when we need each others support the most. The stress, the guilt and the frustration that is causing them is external to our relationship. Neither of us had a substance or gambling problem. We did not get here from being crazy with our spending, Liz’s health problems and both of us losing our jobs took us over the brink. Still we both seem to be internalizing the fault and then lashing out from shame.

We have a very strong marriage, but this is the kind of thing that can erode even the strongest marriage. It makes me very nervous, she is the love of my life and as bad as this is, losing her would be even worse.

The fun doesn’t end there either. Looking at our income and what our outgoing costs will be after we are through filing it does not look like we will make enough to cover everything. With insurance Liz has to have $150 worth of medications a month to keep her back injury under control. This is very important as she has to be able to look for work and then be able to take the job if and when she gets it. Between paying for that, insurance of the car, power and water and food, it does not look as though we will be able to keep our house that we have lived in for the last 14 years.

We are back on the hope bubble, we’re going to try to keep the house in the bankruptcy and then if we don’t find work, well we can let them foreclose on it. It is the last desperate Hail Mary of our first financial life. I can’t decide if I am being stubborn or foolish on this. We could just let the bank take the house in the Chapter 7 filing and that would be that. We might be able to find a place to rent that was low enough that we would start to have extra income right away, but at this particular point, I just can’t face that. I know, when you are declaring Chapter 7 there is no place for pride, but I can’t quite give up everything, not all at once.

And who knows? The horse might learn to sing. Things are supposed to be turning around in this economy and we are both skilled and educated people, we should be employable, right? This week will see another 15 or so applications and a job fair. Hopefully something will break lose soon.

So, it is off to value my possessions some more. The gutters are clean, the grout is shining, the books are alphabetized to death and this article is written. There is no getting around it anymore.

The floor is yours.

 

In this installment, I am going to describe the visit to the attorney and talk about making the choice between Chapter 7 and Chapter 13 bankruptcy. If you are interested in the first part of this series, you can find it here. It is a description of how my wife and I worked ourselves into the position of needing to go bankrupt. Before I start, let me tell you all something I learned which everyone should know. Your 401K and other retirement accounts are exempt up to the first 1 million dollars. If you are in dire financial straights, do not raid these accounts to stay afloat. You will want that money later in life!

So, after coming to the painful realization that there were exactly zero options other than bankruptcy Liz and I had to start the process. If you are willing to go that route you can buy a book and file for bankruptcy on your own. If you have no money or assets then it is not very likely you will be on the hook for any kind of debt. However Dad was an attorney and if there is one thing an attorney is going to always tell you it is: if you are getting involved with the law, have an attorney.

The question then becomes where do you find one? We have a relationship with a labor law attorney (he sued the Workers Compensation insurance company for us when Liz was hurt at work), so Liz gave them a call. Their practice is strictly labor law, but they did have a recommendation.

After moping for about an hour we called and made an appointment. Even knowing that we had no other options there is this huge resistance that we both feel to doing this. I think that this is something we have been conditioned to, but there is this feeling that it is somehow cheating to declare bankruptcy. It completely ignores that fact that businesses do it all the time when it is to their financial benefit, but it is there and it is something we had to face down.

Any time you are in a new situation weird things come up as you try to judge the appropriate way to behave. I spent the morning before we went going back and forth wondering if I should wear a suit or not. I know, crazy, like the lawyer is going to care what I am wearing, or like we should be putting on front like we actually have more money than we do. All I can say in my defense is that Mom was a hell on wheels about proper dress when I was a kid, so maybe I was falling back on that early training. In the end I did not wear a suit, just a dress shirt and jeans.

We drove to downtown Denver to the lawyer’s office. Up to the fifth floor, then wondered around a little until we found their office suite. The office was very nice, a couple of leather couches, a big reception desk with primly dressed late middle-aged receptionist parked behind it. She ushered us into a conference room to wait. This law firm must do pretty well as the conference room held a twenty foot long cherry wood table surrounded with 12 Aeron chairs in the dark graphite color.

The receptionist asked if we would like anything to drink while we waited. I asked for a cup of coffee. She wanted to know how I take it and I said, “Oh, just black will be fine”. As she walked away Liz asked me why I didn’t use my old joke of “I like my coffee like I like my women, black and bitter” which made me laugh out loud. It is stunning how tense this whole thing made me. Was the lawyer going to look down his nose at the deadbeats who needed his help? I did not think that was going to be the case, but I was still worried about it. I should not have been.

The lawyer came in and introduced himself. He sat down and we got to it. The first thing that he did was to explain the difference between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 is basically a forgiveness of debts, minus any assets. This does not mean that they are going to take everything you own and sell it, there are a lot of exemptions. For example, if you have a car (which we do) in Colorado there is a $5,000 per person exemption for the value of the car. So our 7 year old 100K mile Subaru is not going to be sized and sold to try to pay off our creditors.

The same goes for the house. As long as we can stay current with the payments we can keep it. If we fall behind, we will be foreclosed on, just like someone not in bankruptcy. There is a means test for Chapter 7 bankruptcy. If you currently make more less the median income of your state (you can find a table at this link) you are allowed to file Chapter 7.

If you do make more than the median there are further tests; Is the difference between your bills and your income more than $166.66 a month? If it is you will not be eligible for Chapter 7.

If you have an income that is $100 a month more than your bills and you can pay down at least 25% of your unsecured debt? If you do then you have to file Chapter 13.

Since we our income form unemployment is way below the median and we do not have enough to cover our bills on a monthly basis we are eligible for Chapter 7.

What Chapter 7 does is wipe away your unsecured debt. That is all your credit card debt. What it will not wipe away is your mortgage, any taxes you owe and your student loans. You can get out from under your student loans, but you have to show either fraud or that you can not use the education you paid for. Our attorney said that this is nearly impossible to achieve, but that we did not have grounds to try anyway.

The other option is Chapter 13. This is different than Chapter 7 in that is more of a repayment plan. You enter into an agreement with your creditors to pay as much as you can for 3 to 5 years and they agree to wipe away any remaining debt that is left over after that time.

In Chapter 13 allows some thing that Chapter 7 does not. First off, if you have a house with a second mortgage that is worth less than the current balance of the primary mortgage you can petition to have it declared an unsecured debt and it goes into the payment plan like the credit cards. You can also use Chapter 13 to make a payment plan with the government for your taxes. You are still on the hook, for your student loans though.

Chapter 13 is more expensive, as things like trying to get out from under your second mortgage will be contested by the bank and this will mean your lawyer will have to spend more hours on your case. You will also have to have an appraisal, which will run about $400. There is also the risk of not being able to meet your payment plan and having to eventually file Chapter 7, with the costs of doing that as well.

The lawyer went through a process of asking us about our income and assets. We basically answered no to all the questions having spent everything we have and not having bought any new cars, electronics in the last 4 years or even clothes in the last 15 months. For some strange reason he kept asking if we had any Arabian horses. I am sure this was a joke but we were so serious and focused we just kept answering no.

He laid out the costs for us. I sold cars for several years and there is this look that people get when they are mentally changing the amount of money they were going to offer. I saw a similar look before he told us that it would be $2,200 for us to file Chapter 7 with him and around $4,000 for Chapter 13. I don’t know what he usually charges but I am confident that he was giving us his rock-bottom price for doing the work.

This money has to be all paid in advance for the Chapter 7 (you can’t be piling up new debt while you are in the process) or ¾ of it for Chapter 13 (he would be part of the payment plan for the rest). It is not an inconsequential amount of money, but Liz’s brother had already agreed to loan us the money we need to go bankrupt.

He also explained that we would have to go through credit counseling and do this before we filed. He gave us a packet with all of the information we would need to provide him. One of the things everyone has to do is go through all of their possessions and estimate a value for them. In Colorado you have a $6,000 personal exemption for clothes and such.

I asked him what he thought we should do, in terms of 7 or 13? What would he tell us if we were his cousins in this situation. The first thing he said is that this will not be as bad as we think (easy for someone not admitting to being a dead-beat to say, but nice of him anyway). This was about a new start. It would be a big relief not to be crushed under this debt and the calls and letters would stop as soon as we filed. As for which way to go, 13 would let us get out of the $16,000 of our second mortgage, but given the job market it might just be postponing going into Chapter 7. He did not offer any specific advice one way or the other.

We thanked him for his time and told him we would be in touch (after all, short of giant bag of money falling from the sky we would be back to start the legal process). As we walked out Liz said “Well, we are probably not the worst bankruptcy in the world”. She is right, we are just the worst bankruptcy in our world.

So now we are looking at all the options. I don’t see a way that we could possibly afford Chapter 13 no matter what the payment plan really is. Even 25% of our unsecured debt (including the second mortgage) is $20,000. There is no chance we can pay that off in 60 months. Then there is the problem that we are both still without jobs. I am an optimist, hope got me in this position after all, but coming up on 8 month without a single job offer and a year for Liz we can’t be optimists about finding work. That plus the much higher costs and the question of even being able to get rid of the second mortgage all add up to too much risk. So we will file Chapter 7.

On the personal side, I’d like to talk about the strange split in reactions you get when you tell people you are going bankrupt. For the most part people say they are so sorry, kind of like you told them an Aunt died or you have a serious illness. There is a strange little club as people (often in sotto voce voices) tell you they have been there. I am really amazed at the number of people I know who have gone bankrupt and I never knew.

For the most part people are very supportive (and I thank all of the ones that have offered support since I started writing this), but the ones that are not more than make up for it. Maybe it is the guilt and shame I feel for screwing up my financial life so badly that makes their reactions sting so much. I don’t know. It is hard to say that I am blameless, since I made the choices that got me here. Sure there were events beyond my control, but my reactions to the were part of what lead me here.

Still there are those that look at me as a cheat, as a failure, as fool who could not manage his money and now has to rely on the forgiveness provided by the Courts to get out of debt I willingly took on. The fact that it will kill my credit for years, that it will raise my insurance rates, that it will complicate getting a new job does not seem enough punishment for these folks. I don’t know if they want to lord their superior money management skills over me or if they are just striking out to make themselves feel like they are not as close to my position as they really are. It is still pretty traumatizing.

We’ll stop here for this installment. I would like to say one thing though. If you think you are headed in this direction, don’t wait until things are completely unmanageable to start. It is going to cost some amount of money to file and it is going to take some time. If there is a lot more money going out than coming in, start this process now. It is a blow to your ego, but that will happen anyway if you wait. The thing is to get the new start as soon as you can. You are not alone, and no matter what the mean folks might say doing this does not make you a dead-beat or a loser. It is what it is.

The floor is yours.

Tags: Chapter 13, Chapter 7, personal bankruptcy

 

As we grapple with an economy that is somewhere between 15 and 25 million in deficit with jobs, the number of people that are or will be declaring bankruptcy is on the rise. In fiscal year 2008 1.25 million Americans filed for bankruptcy protections. Starting today, my wife and I will be one of the ones filing in fiscal year 2009.

It is surprisingly hard to write that. There is a stigma attached to filing bankruptcy, the assumption is you are a bad person because you entered into debts that you could not repay. Even knowing that I am not a bad person, I still feel some of that social conditioning as my little family faces its financial ruin.

Since I am a writer, I am going to write about this. This is path that I never thought I would be on, which I think is like most folks who face bankruptcy. Since there is this wall of silent shame and since there may be some of you reading this who will find themselves in the same straights, I am going detail the process and what it does to my wife and I in the course of this series.

There will be a lot of personal stuff in this series, as well as information about the bankruptcy process so I hope those reading it will bear with me. This process is not a dry clinical one like it might seem from a distance. When you are talking about admitting that you can’t pay back the people who you owe money to, well, that is a hard thing. Still this is not about sympathy, it is about letting the readers know what the process might be like if they ever wind up in a similar position.

So, let’s get started. Today Liz and I will be visiting a bankruptcy attorney. We have come to the decision that we will not be able to pay back our bills and waiting will not make things any better. One of the things that the attorney wants is a list of our debts. We have that, since we have been living with it and worrying about it for months. Since we will be telling the attorney how we got to this place I think I should detail it to you as well.

One of the quintessential American traits is hope. We bought the house we live in during the spring of 1996. It is nothing huge, but it is a three bedroom, 2 ½ bath house in what was called a “starter” neighborhood. 1400 sq feet, a small back yard and a tiny front yard. Just like a million other houses all over the country.

We refinanced a couple of times, and in 2001 took out a second mortgage which brought the total we financed up to $164,000. Since then we have not used the house as an ATM, and before the bubble burst we were ahead of the appreciation game. That is no longer the case.

Real troubles started four years ago when Liz’s boss at our local housing authority was fired. Since she was his executive assistant, she was let go as well. We were like most Americans, living right up to the edge of our means, with no savings outside of 401K plans. Still we had been making modest progress in paying down debt. We had only one car and were keeping up with our credit cards and other expenses, there just wasn’t anything left over at the end of the month. This is where the hope starts to hammer us. I had a very good and stable job, so we were not too worried. Liz had to find work, but it was not a crisis, or so we thought.

We reduced our expenses, but we even with unemployment, we were not going to stay afloat. We chose to put just a few minor things on the credit cards, you know, to keep our cash flow smooth, and keep our credit good. Liz would have a good job in a month or so and that would allow us to get ahead and pay back anything we put on the credit cards.

Well, one month turned into two, then five. We decided that we had to stop putting more debt onto our credit cards, so instead we raided Liz’s 401K. There was 16,000 dollars in there, and while we knew we were making a mistake, it seemed like the responsible thing to do. Pay your bills, pay your debts, if you have to work longer before you retire, well, then it is your own fault, right?

Liz found a job with as a temp with an engineering firm. The job was supposed to turn into a permanent one, but it did not when the contract they were expecting fell through. No ones fault, just one of those things. So, after only three months on the job, she was back on unemployment.

We continued to spend her 401K and eventually it ran out. Things were getting desperate, so she took a job at Starbucks. It was way below her normal pay, but it was enough that if we really buckled down to only necessities we could get by. That year an unexpected $14,000 dollars came in from my Dads estate. We used it to pay off our car loan and 10,000 of our credit card debit.

In the summer of that year Liz’s leg was hurting a lot. She went to the doctor and was told that she would have to have surgery on her tendon, and have it sometime in the next three weeks. This meant she would be out of work for at least two months, as work at Starbucks means standing and she would not be able to stand. The good news was that Starbucks has a pretty good short-term disability program, so she would get 70% of her income, the bad news was that is was not enough to cover our bills, and we started to rack up debt again. It actually took three months for Liz to recover enough to go back to work.

This brings us up to the end of 2007. Prices on everything were soaring including gas. Liz worked at a Starbucks in downtown Denver, about 20 miles from where we live. Since she mostly opened she could not take a bus, so the cost of gas, even for our four cylinder Subaru was eating us alive. To make matters worse, there were too many people at her store and no one was getting 40 hours. She even became a shift supervisor, which meant a 10% raise, but the cost of living had pushed us into negative territory again.

By December, things were bad. We were getting lots of hostile calls from our credit card companies, we were maxed on all the cards, and we were behind a month in both our mortgages. We bit the bullet and arranged payment plans with all the cards. This would freeze what we owed, stop the penalties from accruing and if we kept up with the plans give us a much lower interest rate when we emerged. We looked at all our expenses and cut out clothes and reduced our cable service to the most basic of packages and took a complete moratorium on buying books (I read two to three books a week, so even buying them used adds up). With all of that we could commit to making these payments.

We had some hope, Liz was told she was on the list for a full managers position, which would have been about a $10,000 raise and we could tough it out. I got a good raise that year and was in a job that had bonuses, which while not steady were at least earn-able. We’d get past this tough patch and things would get better.

Things did not get better. The regional manager that had told Liz she would get a store left and the new one had other ideas and other favorites. The cost of living continued to sky-rocket with the cost of gas going to $4.00 a gallon. The bonus program at my work was cut back severely, so the money I thought I would be able to bring in did not materialize. All of this, pushed us to the point where we had to start using our credit cards to keep up with food and other expenses.

That year the car kind of fell apart. It needed $300 in break work, which revealed that there was a problem with both front bearings, another $1,000. Then a rock hit the sunroof and that had to be replaced before the winter came, another $800. Still we were not in too bad a shape.

Liz’s leg had never really gotten back to 100%. Frustrated she went to see a different surgeon. He took one look at the MRI and said that she would have to have another bigger surgery. The first operation had not fixed the problem and now they would need even more effort to repair it. This time she would be off her feet for four months. Again we had her short term disability, but it was not going to be enough.

We swallowed our pride at that point and asked her brother to cover our house payments while she was out of work. We would owe him $4800 at the end, but at least we would not go under while she could not work. I have to admit that I did spend some money on restaurant food during this time. Between caring for Liz, working full time and doing all the house work, I just could not cook every night. Obviously this money went on the one credit card we had any credit left on.

Liz went back to work on Christmas Eve 2008. The economy was crashing but we both had jobs, so we should be able to start pulling ourselves out of the hole we were in. The price of gas had plummeted and that gave us a little breathing room.

Usually at my work we got a raise every year. This year all raises were frozen, as our sales were off by 25%. It was a way to keep everyone working we were told and while I really could have used the money I thought it was better if the company did not have to lay anyone off.

In April 2009 Liz was fired from Starbucks. It came as a complete shock to both of us. In Colorado we are what is known as an “At will” state. This means that an employer or employee can terminate the working relationship at any time for any reason. As gob smacked as we were, there would be unemployment. It would be a lot less than the last time Liz was on it as she had been making a lot less at Starbucks, but it would be something. That is until Starbucks contested her unemployment. We eventually won the appeals (two of them) but it took 10 weeks in past the usual time when unemployment would start. During this time we used up the little credit we had left and started to go behind on our bills again.

The massive blow to the economy affected me as well. In July 30% of our company was laid off. I was part of that lay-off. I got a decent severance package; one weeks pay for every year I had been at the company and all my vacation time converted into cash. In all about 2 ½ months of my normal pay.

I was devastated, but I am a 6 Sigma Black Belt, which is a (or was) a pretty in demand profession with good pay. It would be okay, I’d have a job before the severance ran out. Since I was no longer working there, I could access my 401K and we did to buy ourselves some breathing space.

We used some of the money to get current with our bills and decided to hoard the rest against emergencies. One thing about bankruptcy is that is never happens when your life is going great. My mother become very ill and had to have surgery. She was in the hospital for five months, four of them in Intensive Care. She lives in Michigan. Since for most of this time it looked as though it would be the end of her life, this meant I went back to Michigan three times for a total of 23 days. Even driving her car and staying some of the time with friends and family, this cost a lot of money. Between this and trying to stay current on our bills, by the New Year the 401K money was gone.

Part of the problem in losing my job was that it came with great insurance. I was covered for free, and Liz was covered for only $100 a month. Even with the COBRA subsidy our insurance cost $400 a month. Liz, because of her back injury, takes seven different prescriptions that even with insurance cost $150 a month. We can not be without insurance. In December, we went back to her brother. We asked if he might be able to cover the COBRA payment. He kindly agreed.

Even with that burden lifted we are not making enough to cover our bills. We are behind with the mortgages (one month) and behind a month on most of the credit cards. We can not even get back into their payment plans, as you have to have an income to do that.

This is where hope ends. We have applied for literally thousands of jobs. No offers. We can not know when we will get a job, given the state of the economy. In all we owe $224,000 but that might as well be a billion at this point.

So, we will have to go bankrupt. I am sorry this is so long, I thought it best to explain the whole situation and breaking it into two posts did not seem to work. In the next installment I will talk about what we find out from the lawyers.

The floor is yours.

Tags: bankruptcy, Bill Egnor

 

Welcome to “Battle at the Blair House,” the bipartisan health care summit taking place today between 10:00am and 4:00pm. You can watch it live on C-Span 3 here, or via the embedded video.

The meeting will be divided into four segments:

Controlling costs – introduced by the President

Insurance reforms – introduced by Secretary Sebelius

Reducing the deficit – introduced by the Vice President

Expanding coverage – introduced by the President

This is part three, which should still be focussed on insurance reform, at least at the start. . . part one’s liveblog can be found here, part two is here.

We are picking up in the second half of the second section. And away we go!

1:45 – Just waiting for everyone to come back from the lunch/vote break. Anyone want to place a bet on whether they will be better able to stay on track time wise?

1:52- I am watching this on MSNBC and Chris Mathews made an interesting point about the end time of this summit. If they go late then the President will not be able to get out and spin the summit for the evening news. Tweety gets up my nose sometimes, but I think he is on to something.

1:56 – Unbelievable! MSNBC is going to the Winter Olympics. I wish my statelite company carried C-Span 3. Now the President is coming back. They should start up in just a minute.

2:01 – President setting out the next steps of the summit. Rep Rangel wants to be sure that he will be to talk. A question asked about when it will adjourn, 4:15 is the goal. Rep. Dingle wants to speak too. With all of these folks who want to speak on insurance reform, that end time looks dubious.

2:10 – Sen. Mike Enzi – Wants separate the Medicaid from the rest of the overhaul. Pining for the old days while failing to note that the Republicans are the ones the ended any pretense of bipartisanship. Brings up the HSA for younger Federal Employees. Says that he likes the exchange idea (is that going to get him pilloried by the Tea Party folks?), then comes the but (as PeeWee Herman said, everyone has a big but).

Sen. Harkin – Another story. I love that we are getting these, but they really slow things down. Farmer got a 14.6% increase in cost from his insurer. Getting less while paying more. The farmer can’t control his insurance risks and costs and wants to be able to get out of the “high risk” pool. Sen. Harkin lays out the amount of time already spent on the HCR. Notes the number of Republican amendments. Notes that 9 out 10 of the Republican Houses proposal are in the Senate bill (which is why it is such a bad bill). Great point about the inability to do this piecemeal. “Incremental approach is like throwing a drowning man 50 off shore a 10 foot rope” .

Segregation is not allowed by disability or color or race or creed, but we do allow it based on health. Health insurance is flawed because of segregation by health (nice idea, but the real flaw is for profit health care. The incentives are all wrong as long as profit is a motive.

(Liveblog continues after the jump.)

 

One of the reasons I have always argued for a full investigation of the treatment of prisoners by the U.S. government is that the truths is going to come out sooner rather than later. For those who want to hide from accountability under the law later is always the better goal. The longer it takes for the abuses of the Bush Administration torture program to come to light the less likely there is to be an outcry and the more likely those who ordered and carried out torture are to elderly or dead.

Today the British government lost its appeal and was forced to disclose a new piece of the torture puzzle. In 2002 a British subject by the name of Binyam Mohamed was arrested in Pakistan. He claims he was tortured there, then sent to Morocco where he was also beaten and finally in 2004 sent to Guantanamo Bay. If Mr. Mohamed’s name seems familiar to you, it should. He is the man who claims he was tortured by a scalpel slicing his genitals.

What makes Mr. Mohamed’s case particularly galling (as if genital slicing was not enough) is that he has been released without ever being charged either by the British or the U.S.

Mr. Mohamed is one of seven British subjects who are suing their government for its complicity in torture. This new information came from a summary that a judge wrote after reviewing intelligence reports from the United States.

Here are the seven paragraphs, from the Guardian:

It was reported that a new series of interviews was conducted by the United States authorities prior to 17 May 2002 as part of a new strategy designed by an expert interviewer.

v) It was reported that at some stage during that further interview process by the United States authorities, BM had been intentionally subjected to continuous sleep deprivation. The effects of the sleep deprivation were carefully observed.

vi) It was reported that combined with the sleep deprivation, threats and inducements were made to him. His fears of being removed from United States custody and “disappearing” were played upon.

vii) It was reported that the stress brought about by these deliberate tactics was increased by him being shackled in his interviews

viii) It was clear not only from the reports of the content of the interviews but also from the report that he was being kept under self-harm observation, that the interviews were having a marked effect upon him and causing him significant mental stress and suffering.

ix) We regret to have to conclude that the reports provide to the SyS [security services] made clear to anyone reading them that BM was being subjected to the treatment that we have described and the effect upon him of that intentional treatment.

x) The treatment reported, if had been administered on behalf of the United Kingdom, would clearly have been in breach of the undertakings given by the United Kingdom in 1972. Although it is not necessary for us to categorise the treatment reported, it could readily be contended to be at the very least cruel, inhuman and degrading treatment by the United States authorities.

Reading these paragraphs it is pretty clear why the British and the U.S. government wanted to keep them secret. There are at three big factors here; first that the U.S. was in charge of the questioning. Second that the British were well aware of it, and finally that at least one Judge sees this as meeting the standard of torture under both the Geneva Convention and the International Conventions Against Torture.

This is a very big deal. Even if Attorney General Holder is willing to stonewall full investigations of torture, in contravention of our laws, the British Courts are not. The connection between the British activities and the U.S. activities give us a window into what happened to many prisoners not just the so-called “high value” prisoners.

It dovetails nicely with what we have seen the Republican view of torture to be. Any prisoner taken into custody for any accusation of terrorism is potentially subject to torture. If you think this is a reach, think about the calls for the Fruit of the Boom Bomber, Mr. Abdulmutallab. The whole push to have him put in military custody is based on the idea that he could be more harshly interrogated, which is, of course, code for torture.

This is just one more dip in the slow stream of the truth coming out. It makes the case Mr. Mohamed and his co-plaintiffs are bringing against the British government that much stronger. If they are successful in proving the British complicity in U.S. torture of prisoners, it further erodes the spurious “looking forward” reasoning of the President and the DoJ in regards to the Bush era torture program.

This whole situation makes me incredibly angry. Think about what Mr. Mohamed has gone through. He was arrested, held for seven years by a series of four different nations, beaten, sleep deprived, had his genitals sliced, and then was released without ever being charged by either the U.S. or his own government with any crime. This is what unreasoning fear and a desire to be tough has brought us to, this is what the nation that wants to be the “Shining city on the hill” has become, a nation that will not only orchestrate this kind of atrocity, but will not own up to it.

This is another drip. It will not be the last. The truth will come out. In the end the United States will have to decide if it is a nation of laws or if the powerful really can do as they like because they are powerful. Hopefully we will redeem our national honor and pride, but as of today, we have not.

The floor is yours.

“Originally posted at Squarestate.net“

 

The recent Citizens United decision by the Supreme Court has caused a lot of consternation, to say the least. The main concern is that decision is so broad that, if they care to, any cooperation could spend unlimited amounts of its collective money to influence the election of a Senator, a Representative or even state level judges and elected officials.

Today the House Judiciary Sub-Committee on the Constitution, Civil Rights and Civil Liberties held a hearing on the impact of this decision and where there might be legal curbs placed on the now unlimited money. There were four witnesses today, Professor Lawrence Tribe from the Harvard School of Law, Monica Youn from the Brennan Center for Justice, Sean Parnell the President of the Center for Competitive Politics (an anti-reform group) and Donald J. Simon of Sonosky, Chambers, Sachse, Endreson & Perry, LLP, a law firm that specializes in representation of Native American interests. He is also General Council for Democracy 21.

All but Mr. Parnell testified to the expected negative impact of the Citizens United ruling. Mr. Parnell, of course, does not think that the Supreme Court stripping away all limits on corporate spending on elections is a problem, as his group tends to think that if you have the biggest stick you should get what you want.

The hearing, from the point of view of the Representatives was how big a problem this is and what could be done legislatively to mitigate the problem. The three big ideas from the witnesses who were in favor of restraining cooperate spending were as follows:

1) Much stronger requirements for reporting to shareholders on expenditures and requirements for direct shareholder approval of expenditures in advance.

2) Strengthen FCC Disclosure – this would include a requirement that all 527 groups fully disclose where they get their money.

3) A law allowing the States to regulate cooperate expenditures in State elections. Currently this would not be possible since the Commerce Clause applies to corporations.

Interestingly none of the pro-reform witnesses were in favor of a Constitutional Amendment, like the one proposed by Representative Donna Edwards. They had two arguments against this, first off the time it would take to amend the Constitution would allow a lot of influence by domestic and foreign company’s to our elections.

The other, which came from Ms. Yuon, was that we should push back on the actions of the Court legislatively before we work on the Constitution. This is the solution I am in favor of but for another reason.

No matter what we do the ilk like Citizens United is going to push to have the elections in this nation be like the Wild West. However, it takes time for court cases to work their way through the system. There has to be some harm done, then an initial case in District Court, an appeal the Circuit Court then it gets back to the Supreme Court. This process is very rarely shortened, even when we are talking about things like habeas corpus. So by putting some limits in right now we buy some time to really dig in and find a way to fix the problem the Supreme Court has handed us.

Ms. Yuon hit the nail on the head about the effects of time on this issue. The Republican members of the committee were unconvinced that corporations really would jump in, one went so far as to say that corporations were the political speakers most likely to be intimidated, citing their willingness to change when boycotted by consumers. The question that shot to my mind was “Who is going to be able to boycott Exxon, exactly?” Even if you don’t buy gas from their station, the number of products that use their oil is shocking. Besides, do we really think they care? If they did, would they be continually fighting to reduce the judgment against them for the Exxon Valdese accident?

There is a lot of hoopla about the proposed Constitutional Amendment. For those who have not seen it, the text reads :

Amendment XXVIII

Section 1. The sovereign right of the people to govern being essential to a free democracy, the First Amendment shall not be construed to limit the authority of Congress and the States to define, regulate, and restrict the spending and other activity of any corporation, limited liability entity, or other corporate entity created by state or federal law or the law of another nation.

Section 2. Nothing contained in this Article shall be construed to abridge the freedom of the press.

While this is a good thing in and of itself the path to passage is far from sure. Passage requires not only a 2/3 vote in both the House and the Senate, it requires that ¾ of the states also ratify it. For someone that lived through the attempted ratification of the Equal Rights Amendment as a kid, I am far from convinced that we will be able to get this done.

It is far better to work the system, to make law that has to be challenged in the courts and keep doing so until we can find a set of conditions that protect the people from the non-people corporations.

This is not to say that we should not push ahead with the Amendment attempt, we should. It is just that we need to focus on the immediate future and not allow our political system to be held hostage by the mere threat of enormous amounts of money being spent.

The floor is yours.

 

There is a tendency in political arguments to take things to their logical, yet absurd conclusion and then argue about that being a bad idea. This is called reductio ad absurdum. It tends to be a bad way to argue, since most of the time things do not get to their absurd and logical conclusion in real life. However, in Colorado Springs we have a real life example of things going to the level of the absurd.

For those who don’t live in Colorado or don’t follow the whole “Tax Payers Bill of Rights” (TABOR) movement I need to set the stage a little bit. There is a this very conservative fellow by the name of Douglas Bruce. Old Dougie is more than a bit of a nutter about taxes. He and Grover Norquist have the same idea,namely, that the government never spends money well and should always be starved of all the money possible, at every turn

TABOR being passed, first in Colorado Springs, then state-wide in Colorado. One of the provisions of TABOR is that tax revenue cannot be increased except by the popular vote of the people, beyond the rate of inflation plus the rate of population growth. Beyond that limit the State or the City has to return any revenue they have collected.

That would be bad enough, but TABOR is based on the previous year, so if we have a recession like the one we are in, and revenues fall, then the next year the City or the State has to start from that lower limit. They can’t stay where they were the previous year and to raise anymore revenue requires a popular vote.

You can see where this is going. When there is a long term recession, revenues fall, and then the next year there is even less to start with. This is where the City of Colorado Springs is now.

Last summer the City knew it was in trouble. They had to cut out the health inspections of pools and day care centers, because there was not enough revenue. They put the idea of raising taxes before the people and the anti-tax crowd in the Springs, lead by Douglas Bruce not only defeated it, they managed to unseat some incumbents on City Council who had proposed the increases and campaigned for them.

Fast-forward to February 2010 and the City is in real trouble. How much trouble? Check out this from the Denver Post today;

More than a third of the streetlights in Colorado Springs will go dark Monday. The police helicopters are for sale on the Internet. The city is dumping firefighting jobs, a vice team, burglary investigators, beat cops — dozens of police and fire positions will go unfilled.

The parks department removed trashcans last week, replacing them with signs urging users to pack out their own litter.

Neighbors are encouraged to bring their own lawn mowers to local green spaces, because parks workers will mow them only once every two weeks. If that.

Water cutbacks mean most parks will be dead, brown turf by July; the flower and fertilizer budget is zero.

City recreation centers, indoor and outdoor pools, and a handful of museums will close for good March 31 unless they find private funding to stay open. Buses no longer run on evenings and weekends. The city won’t pay for any street paving, relying instead on a regional authority that can meet only about 10 percent of the need.

This is where reductio ad absurdum meets the real world. Now you would think that at the point where your city is turning off half the lights, where it is will stop paving roads, where it will let the parks die (and if you don’t water and care for parks in Colorado in the summer they are going to die) the people would be getting pissed to the point where they raise taxes and get the revenue, right? Not so much. More from the Post:

Voters in November said an emphatic no to a tripling of property tax that would have restored $27.6 million to the city’s $212 million general fund budget. Fowler and many other residents say voters don’t trust city government to wisely spend a general tax increase and don’t believe the current cuts are the only way to balance a budget.

snip

Community business leaders have jumped into the budget debate, some questioning city spending on what they see as “Ferrari”-level benefits for employees and high salaries in middle management. Broadmoor luxury resort chief executive Steve Bartolin wrote an open letter asking why the city spends $89,000 per employee, when his enterprise has a similar number of workers and spends only $24,000 on each.

This is the kind of thinking that the anti-tax crusaders engage in. Even though they know their city is going to be dark and dangerous and ugly they still can’t seem to get it through their heads that they can’t treat it like a business which hires part time people. They would rather have the second largest city in the State of Colorado go down the toilet than raise taxes even a little. We are talking about a 22 million dollar shortfall here, not billions, in a city of more than 300,000 people.

It would be funny if it were not so sad. This entire situation is a real life example of following things to their absurd conclusions. The TABOR crowd has had a strangle hold on the very conservative city of Colorado Springs for years and now they are on the verge of strangling it to death.

If anyone needs an example of what the (Hair) Club for Growth wants for America, you need look no further than Colorado Springs. This is not an unintended consequence, this is not a bug of their plan; this is a feature and the future for any State or City that votes for this insane legislation.

The floor is yours.