The Shriver Brief : Poverty Law Commentary & Insights : Sargent Shriver National Center on Poverty Law : Affordable Housing, Healthcare Reform

JPMorgan Chase may begin capping debit card purchases at $100 or even $50. Chase stopped issuing new debit reward cards in November of last year and recently announced that it will end the reward program for existing customers as well. Chase is also testing monthly fees on debit cards and checking accounts in select states. These are just some of the ways that banks and credit card issuers are responding to proposed regulations on interchange fees.

The recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act gave the Federal Reserve the authority to regulate the amount of interchange or swipe fees (i.e., the fees that a card issuer can charge retailers for transactions involving their cards) to ensure that they are “reasonable and proportional” to card issuers’ costs. About $16 billion in interchange or “swipe” fees were collected in 2009; averaging around 44 cents per transaction. However, a report issued by the Federal Reserve (Fed) found that the median total processing cost for debit and prepaid card transactions is 11.9 cents per transaction.

Using its new authority, the Fed has proposed rules that would cap interchange fees at 12 cents, starting in July. Since such caps could cost card issuers billions, they are examining potential sources of new revenue. For instance, a cap on interchange fees could cost Chase over $1 billion a year. In addition to getting rid of rewards programs, banks are considering “unbundling,” (i.e., dividing debit card services into components and charging for each of them separately). Some banks are also considering limiting the amount of debit card transactions.

At the same time, banks are also challenging the proposed regulations. TCF filed a lawsuit against the Fed claiming that the proposed regulations are unconstitutional because (1) they apply only to 1% of U.S. banks with assets of $10 billion or more and (2) they constitute an unlawful taking by the government of TCF’s property (i.e., debit card income). Although the U.S. Justice Department sought to dismiss the lawsuit the judge denied this motion.

In Congress, legislators are also concerned and have taken action to delay the proposed rules. Senator Jon Tester (D-MT) introduced the Debit Interchange Fee Act of 2011 (S. 575) and Representative Shelley Capito (R-WV) introduced the Consumer Payment System Protection Act (H.R. 1081). Sen. Tester’s bill would place a two-year delay on the implementation of any regulations and require a study examining the debit interchange payment system, including the costs and benefits of electronic debit card transactions and alternative forms of payment, the structure of the current debit interchange system, and the impact of the proposed rule reducing debit card interchange fees. Rep. Capito’s bill calls for a one-year implementation delay and a study of the various categories of all costs and investments associated with debit card transactions and the impact of any proposed rules. On the other hand, the Oregon State Legislature introduced a Senate joint memorial (SJM 18) urging Congress to proceed with interchange fee limits.

While consumer groups agree that swipe fees should be regulated, they are somewhat divided on how to achieve these objectives. Consumer advocates such as U.S. PIRG, Public Citizen and the Hispanic Institute support the new rule while the Consumer Federation of America has expressed concerns and has asked the Fed to increase the proposed rate cap.

For more information on interchange fees including other countries’ experience with similar debates, see the American Antitrust Institute (AAI)'s March 2010 report, “Electronic Payment Systems and Interchange Fees: Breaking the Log Jam on Solutions to Market Power” by Albert A. Foer.

For more information on the proposed regulations and the potential impact on consumers, see the resource page of the Sargent Shriver National Center on Poverty Law’s recent webinar, The Next Frontier in Public Benefits: Electronic Benefit Cards.

This blog post was coauthored by Ji Won Kim.

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Officially, the recession ended in June 2009. But for many Americans, the recession is still in full force. New research shows that the recovery is not being evenly shared. Overall, workers’ earnings are down because the jobs that are hiring pay less than the jobs that were lost. Minorities face much higher unemployment and live disproportionately in states which have the worst economic climate. Young people face especially daunting job prospects. So perhaps it’s no surprise that a recent CBS/New York Times poll shows that only 23% of Americans think the economy is getting better.

Meanwhile, politicians in Washington are discussing budget cuts that could derail the recovery and undermine our long-term competitiveness. Right now, we need to invest in the infrastructure of job training and education, which is a driver of our economy and will help put Americans back to work.  

Well-Being Is Not Improving After the Recession
The Center on Social Exclusion went beyond just measuring gross domestic product to examine 14 indicators of well-being in four categories (housing, health, jobs, and socio-fiscal). Looking back over the last 18 months, the study found that most states had not improved their well-being. Many are still treading water, and 15-24 states have actually continued to lose ground in each of the categories. Furthermore, states with higher percentage minority populations have fared worse on these measures than predominantly white states.  

Unemployment Is Improving Slightly,
But Long-Term Unemployment Continues to Worsen
Private sector hiring is improving, but even with 216,000 new jobs in March we have a long way to go. There is still only one job opening for every four unemployed workers. We need to add 127,000 new jobs every month just to keep up with population growth. At this rate it would take five and a half years just to halve the unemployment rate down to a more acceptable 4.4%. There at 13.5 million unemployed Americans who are actively seeking work, plus 8.4 million Americans who are working part-time only because they can’t find full-time jobs, and at least another 2.4 million who would like to work but aren’t looking right now. The length of time workers are unemployed is still inching up; half of those unemployed have been looking for five months or longer (the average amount of time out of work is now nine months and rising). The overall unemployment rate is 8.8%, but the rate remains especially high for those with limited education, Hispanics (11.9%), Blacks (15.5%), teenagers (24.5%), those aged 20-24 (15.0%), veterans who’ve served since 2001 (10.9%), and persons with a disability (15.6%).  

Real Earnings Are Falling While Corporate Profits Soar
While more Americans are finding work, wages and earnings are heading in the wrong direction.

The economy has been expanding for almost two years. Real corporate profits neared an all-time high in 2010, and top CEOs earned 23% more in 2010 than 2009. But the gains in productivity generated by American workers are not ending up in their pocketbooks. Instead, the Wall Street Journal reported last month that, while productivity has climbed 5.2% in the first 18 months of the recovery, that had translated into record profits for shareholders, not higher wages for workers. In fact, since that story broke, real hourly wages have fallen more than 1% in the last two months alone. And that’s not an isolated blip. From March 2009 to March 2011, the average American worker lost 1% of their total earnings in real terms. 

Good Jobs Lost During the Recession Are Being Replaced By Low-Wage Jobs
The National Employment Law Project released a report that shows that while the recession’s job losses were concentrated in higher-wage industries (especially construction, non-durable manufacturing, finance/insurance, and information), the limited job gains since have come disproportionately in the low-wage industries (temporary jobs, retail, administrative support, and the service sector).  

We Must Re-Invest in an Equitable Recovery That Creates Jobs
We need to invest in education and training for American workers so we can innovate, grow the economy, and create jobs that pay a family-sustaining wage. The president has called on all Americans to get at least one year of education or training after high school. That extra education is critical; workers over 25 with some college or an associate’s degree currently have an unemployment rate of 7.7%, compared to 10.5% for high school grads and 15.2% for those with no high school degree. Last year, the federal Workforce Investment Act system, which provides training and job search assistance, served 8.4 million Americans and helped 4.3 million get jobs.

But our national infrastructure for job training and education is under threat. The continuing resolution recently passed by Congress to fund the government through fiscal year 2011 cut $1 billion from our nation’s investments in job training and education, though even further cuts were averted. And House Budget Chairman Paul Ryan’s long-term budget proposal, which passed the House on April 15, included naïve assumptions about Pell grants, community colleges and the workforce development system, and drastic (though still vague) cuts to these critical programs. It should be obvious, but now is not the time to cut job training and employment services. Solving our budget crisis is important, but slashing the workforce development system will undermine our future competiveness and growth. Right now, we need to get Americans back to work.

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All too often, the news about low-income people and technology is bad. Low-income communities trail the rest of the country in their ability to access the internet. As a result, low-income Americans have less access to information, job opportunities, and public services than other citizens. Moreover, the bureaucracies that have an impact on low-income Americans’ lives—namely, the city, state, and federal agencies that distribute public benefits—usually lack the most current technological innovations, and efforts to modernize program administration are frequently delayed. In New York, for example, the New York City Housing Authority’s recent attempt to modernize by installing a new $36 million computer system has been plagued by delay and lost information. Additionally, some attempts to modernize public benefits administration have unintended adverse consequences for certain populations. As Cary LaCheen wrote in a recent Clearinghouse Review article, many public benefits agencies are using call centers to interact with clients in an effort to reduce face-to-face time and streamline operations. Unfortunately, this efficiency comes at a cost for deaf and hard-of-hearing individuals, who face multiple barriers when they try to communicate remotely with benefits agencies.

Against this dispiriting backdrop, Single Stop USA’s successful use of technology to benefit low-income Americans is especially welcome. Single Stop USA, which recently received a $1.1 million grant from the White House Social Innovation Fund, began in New York City as a project of the Robin Hood Foundation. Single Stop USA uses its revolutionary benefits enrollment network, or “BEN,” to help low-income people understand the public benefits maze and make sure that they are receiving all of the assistance for which they are eligible. 

BEN is proprietary software that Single Stop USA counselors access over the internet on their office computers. After Single Stop USA counselors are trained to use the BEN technology, they are placed in local organizations such as hospitals, churches, public defenders’ offices, and community colleges. When clients go to these organizations to meet with their attorneys, go to class, or get check-ups, they can also meet with Single Stop USA counselors. The counselors interview the clients, enter some basic information into BEN, and then provide the clients with information about city, state, and federal benefits that they are entitled to receive. Finally, the counselors either guide clients through the benefits application process or provide the clients with referrals to service providers who will help them, free of charge. BEN is constantly being revised and updated; just in time for tax season, BEN now has a “tax tab” that can provide clients with free tax preparation. This is particularly essential for low-income clients, many of whom think that they do not need to file income taxes when, in fact, there are often credits that they are eligible for, such as child care credits and the Earned Income Tax Credit.

Until recently, Single Stop USA’s work has focused on New York and California, but the White House Social Innovation Fund Grant will help it to expand nationwide. The BEN concept is well-suited for nationwide expansion, because the software can be custom-designed for every organization that Single Stop USA partners with and work with the particular array of state and local services available to clients in a given location. The White House grant is designed to help Single Stop USA with its efforts in community colleges, on which Single Stop USA plans to focus as it continues to grow. Community colleges are an ideal location for the Single Stop USA model, because the benefits that students receive from a Single Stop USA consultation can help them on multiple fronts. Obviously, students who meet with Single Stop USA counselors get immediate assistance with their taxes and benefits. Improved benefits and tax returns also help the students achieve their long-term goal: higher-paying jobs.

Single Stop USA is not the only organization using technology to benefit low-income Americans. Indeed, Pine Tree Legal Assistance in Portland, Maine, recently launched Stateside Legal. Stateside Legal acts much like Single Stop USA’s benefits calculator, but for U.S. military veterans. Any veteran can go to Stateside Legal, enter some basic personal information, and receive legal information about state and federal programs he or she might be eligible for, as well as general information regarding foreclosure, consumer debt problems, and health diagnoses common to veterans. Veterans can also use the site to find an attorney, if necessary. Stateside Legal has already received about 79,000 page views since its launch in November 2010. Stateside Legal received a $300,000 grant from the Legal Services Corporation’s Technology Initiative Grants Program, which “promotes full access and high-quality legal representation through the use of technology.” In fact, the Technology Initiative Grants Program funds many noteworthy uses of technology on behalf of America’s poor, including I-Can! E-File, a free electronic tax-filing system that helps low-income Americans file for the Earned Income Tax Credit. The I-Can! program has 560 partners in 49 states.

As more and more organizations follow the example set by Single Stop USA, and the Technology Initiative Grants Program’s grantees, hopefully we will begin reading more headlines about advocates successfully using technology to close the income gap and fewer headlines about the dearth of innovative technologies available to low-income Americans.

Editor's Note: The Editorial Team of Clearinghouse Review: Journal of Poverty Law and Policy would like to know more about how legal aid and other public interest law advocates use technology to stay informed. Please respond to our brief online survey by May 6, 2011.

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The Supplemental Nutrition Assistance Program (SNAP, formerly called Food Stamps) is one of the nation’s most important anti-hunger and anti-poverty programs and helps 44 million Americans buy food, including 1.8 million in Illinois. In 2009, SNAP effectively lifted 4.6 million Americans out of poverty. Today, SNAP is threatened by House Budget Committee Chairman Paul Ryan’s long-term budget plan, which passed the House on April 15, and other potential structural changes in government spending such as a global spending cap.

What is SNAP?
Food stamps have existed in one form or another since the latter years of the Great Depression, helping Americans avoid hunger and malnutrition. SNAP also helps American farmers and the 200,000 retailers who accept the benefits. The federal government pays for all SNAP benefits, and splits the cost of administering the program with the states.

SNAP is a critical part of the safety-net for American families. Three-quarters of all benefits go to households with children, and nearly one-third go to households where a family member is elderly (over 60) or disabled. SNAP serves American families whose income is less than 130% of the federal poverty line ($1,579 per month for a family of two or $2,389 for a family of four). This eligibility level is set by Congress.

SNAP benefits are keyed to the USDA Thrifty Food Plan, which is the Department of Agriculture’s estimate of the cost of a bare-bones, nutritionally adequate diet. The maximum benefits (including the small temporary increase provided by the American Recovery and Reinvestment Act) is currently $367 for a family of two or $668 for a family of four; that amount goes to families with no disposable income after certain necessities are deducted from their income. But the average person receives just $4.46 a day. Perhaps not surprisingly, food pantries report more need towards the end of the month, when people have exhausted their SNAP benefits and still need to eat.

Ryan’s Long-Term Budget Threatens SNAP
Chairman Ryan proposes radical, unwise, and unnecessary changes to the SNAP program including the following.

• Ryan would cut almost 20%, or $127 billion, from the SNAP program over ten years. Slashing this much from the program would require cutting off access to food for millions of Americans, or drastically reducing benefit levels.
• Ryan would change the structure of SNAP to a “block grant” starting in 2015. Block grants cap federal expenditures for a particular program, and the federal government simply gives states a fixed amount each year without regard to the level of need.
• Ryan would require adult recipients of SNAP to work or engage in job training. Our society should provide the most vulnerable among us adequate nutrition, even if they or their parents are unable to work.
• Ryan would make SNAP receipt time-limited, like Temporary Assistance for Needy Families (TANF). Such a policy would cause hunger and malnutrition for millions of Americans, especially the elderly, after they exhausted their period of eligibility.

Cutting $127 Billion from SNAP Would Rip a Hole in the Safety Net
Slashing 20% from the SNAP program would hurt millions of Americans, including the elderly and working families. It would also hurt farmers and retailers and shift a huge financial burden onto the states. In Illinois alone, a conservative estimate of the cuts would be $5 billion in lost support over 10 years. That is money that families could not use to buy healthy food, and money stores would not bring in, reducing employment and increasing food deserts, areas that lack access to healthy food. If the $127 billion in cuts come from solely from narrowing eligibility, at least 8 million individuals would need to be cut from the program. If the $127 billion in cuts come from a universal cut in benefits, it would be a reduction of over $30 per person per month, which adds up to more than $1,000 a year for a family of three. There isn’t much else to cut—SNAP is efficiently run and has an extremely low error rate, with over 98% of SNAP benefits going to households who are qualified for the program.

SNAP Should Remain a Federal Program
SNAP is, and should remain, a federally funded program for three main reasons. First, hunger is a national problem, and ensuring access to enough food for all Americans should be a shared commitment. Second, SNAP benefits food producers and sellers all around the country, ensuring steady national and local supplies of food. Third, if SNAP were block-granted, states would not be able to adequately respond to increases in need caused by natural disasters or recession. In 2005 after the hurricanes in the Gulf Coast, for example, SNAP provided two million suffering families $1 billion in benefits.

Block-Granting SNAP Would Undermine Its Purpose and Is Not Necessary to Control Spending
Chairman Ryan believes that block-granting SNAP would help keep spending down. In fact, the block-grant structure is unwise and unnecessary.

First, it’s unwise because a block-grant structure would rob SNAP of the flexibility to respond to times of increased need, like natural disasters and recessions. It is a testament to the flexibility of the program that in this time of unprecedented economic challenge it has grown to a record high, with 44 million Americans receiving SNAP in January 2011. SNAP must remain a counter-cyclical program to keep families afloat in difficult times.

Second, block-granting SNAP is not necessary to keep spending in check. Chairman Ryan incorrectly asserts that SNAP costs are rising out of control. In fact, the growth of SNAP is already slowing as the recovery begins. The non-partisan Congressional Budget Office predicts that SNAP expenditures will begin to fall starting in 2012. The program’s cost will return to a .3% share of GDP—the same as before the recession – by 2021. You can find state-level trends calculated by Food Research and Action Center here. 

In the last decade, SNAP costs have increased for four reasons. The vast majority of the rise is temporary and caused by the recession ,which has caused increase expenditure on SNAP because more people than ever qualify for help. The SNAP caseload closely tracks the number of people in poverty and the unemployment. Here in Illinois, for instance, in the last five years the unemployment rate has increased by 71% (from 5.6% in January 2006 to 9.6% in January 2011), and SNAP receipt has increased by 48% (from 1,216,433 to 1,803,223). Also, Congress and the President responded to the recession by temporarily boosting SNAP benefits by an average of $46 per household, which will expire in October of 2013. This expense is one of the best forms of stimulus in which our government has invested. A small part of the increased cost of SNAP comes from higher food costs, since the maximum SNAP amount is tied to the cost of a bare-bones nutritious diet. Finally, in the last decade we have made strides in getting qualified people who need help buying nutritious food enrolled in SNAP, but still one-third of eligible families do not receive SNAP, especially working families and the elderly. All this demonstrates that the biggest causes of the rise in the cost of SNAP have been the rise in the number of people who qualify for SNAP, and increase in benefits, both of which are temporary.

Adding a Time-Limit and Work Requirement to SNAP Are Impractical and Naive
The House doesn’t really think that people will stop needing to eat, do they? For many adults around the nation, SNAP is literally the only government support to which they are entitled that prevents their utter destitution and starvation.

Ryan’s proposal to require SNAP recipients to work or do job training is unrealistic and expensive. States already have smaller-scale employment & training programs for SNAP recipients, and require able-bodied childless adults to work or engage in training. But expanding this program to all recipients would swamp already-strapped states, driving up administrative costs with additional personnel and infrastructure. Paradoxically, elsewhere in Ryan’s plan he guts our nation’s investments in job training! Even the recently passed FY 2011 continuing resolution cut $1billion from job training and education.

Protecting SNAP’s Ability to Prevent Hunger in Challenging Times is a Moral Imperative
SNAP literally saves lives. SNAP helps families improve their nutrition, because 90% of SNAP benefits go to fruits and vegetables, grain products, meats, or dairy products, and the program includes a strong nutrition education component. Research shows that the national expansion of SNAP (Food Stamps) in the 1960s reduced infant mortality. That’s why prominent Americans, including conservatives like Bob Dole, support SNAP. Hunger and malnutrition in America was real—if you don’t remember it, watch this moving video. Today, tens of millions of Americans—one in five –struggle to buy food for their families.

Our lawmakers face a stark challenge—a growing structural deficit at a time of unprecedented need. But SNAP is not a part of the structural problem. For decades now our nation has embraced this core belief—that in a land so prosperous and fortunate as America, no adult, child, or elder should go hungry. Let us not turn our back on this most fundamental obligation.

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Here is how the long-term budget plans recently put forth by House Ways and Means Committee Chairman Paul Ryan and President Barack Obama compare on several critical factors.

Deficit Reduction
All agree that reducing the United States’ current $14 trillion indebtedness is a critical national priority. The President’s plan would reduce the deficit by $4 trillion over 12 years, enough to stabilize the national debt so that it increases no faster than the economy. Rep. Ryan’s plan would have no perceptible impact on the federal deficit, since by his own estimation, his proposed $4.3 trillion in spending cuts are entirely offset by his proposed $4.2 trillion reduction in taxes.    

Balanced Approach and Shared Sacrifice
President Obama follows the Bowles-Simpson deficit reduction commission’s recommendation that deficit reduction be 2 parts spending cuts to 1 part revenue increases. 50/50 would be a fairer balance, but there is at least the semblance of shared sacrifice as the wealthy are asked to give up their Bush era tax cuts when they expire next year.

Congressman Ryan’s budget has no balance or shared sacrifice. At least 2/3 of his recommended spending cuts are to programs for people of limited means, and he not only asks for no contribution from the wealthy but significantly enriches them by making the Bush tax cuts permanent, further weakening the estate tax, and lowering the top tax rate from 35 to 25%.

Distribution of Spending Cuts
The President would cut defense spending by $400 billion over 12 years and would also cut agricultural subsidies. Ryan’s budget does not cut in either of these areas, thus unfairly concentrating his proposed cuts on only limited parts of the budget.

Investing for the Future
While the President’s plan makes deep spending cuts in a number of areas, it also includes spending increases in areas he identifies as drivers of economic growth, including energy innovation, education, health care reform and infrastructure. Ryan’s budget makes no investments for the future.

Health Care
The fundamental differences between the Ryan and Obama plans come into high relief when their recommendations for the publicly funded health care programs Medicare and Medicaid are compared.

Ryan’s health care plan includes no cost containment measures and would, according to the non-partisan Congressional Budget Office, substantially raise overall costs for Medicare beneficiaries. It lowers federal health care spending solely by shifting costs on to the states and the elderly, disabled and low-income people who participate in these programs. Ryan would cut Medicaid funding by $1.4 trillion over the next ten years; Illinois’s share of this cut would be $47 billion.

In addition, Ryan would “block grant” the Medicaid program, meaning the amount of federal funding the state receives each year would be fixed and would not be adequately adjusted for such cost drivers as medical cost inflation, growth in the population, and aging of the population. The impact of block granting Medicaid would be harshest during recessions, when federal funding would no longer automatically increase to assist more people who lose their jobs, income, and health insurance. This would not only increase hardship and destitution in recessions, but also would further weaken a slumping economy and lead to the loss of many more jobs. And it would deprive states of one of the most important forms of enhanced federal support during recessions, deepening state fiscal crises and crippling the ability of states to meet the greater needs of their citizens in recessions.

Ryan would also end the Medicare program, which provides guaranteed health care to all persons over 65. He would replace it with a voucher paid to private health insurance companies that would shrink in value over time, shifting more and more of the cost of health care onto the elderly.

Obama proposes to bring down the cost of coverage by bringing down the cost of health care itself, instead of just shifting the cost. He would build on the cost containment measures in the Affordable Care Act, producing $100 billion in savings over twelve years from actual cost reductions. There would be no cost shifting to the states or program participants. He would not block grant Medicaid nor would he end Medicare.

Political Courage
Rep. Ryan’s plan imposes over 2/3 of its spending cuts on the politically safest target, low-income people, while offsetting all spending savings with extremely large tax breaks for the wealthiest Americans, accomplishing no net deficit reduction at all. He asks for no sacrifice from his base, and he creates clear winners among the financial backers of his political party. 

President Obama’s plan provides a balanced approach (albeit relying somewhat too much on spending cuts and not enough on revenue increases), shared sacrifice, and real deficit reduction without undermining the fundamental structure of our health care safety net programs. There will be significant pain among core elements of his base. The President leveled with the American people, making clear that the solution will not be achieved by magical elimination of “waste and abuse” or reduction of programs like foreign aid, but instead by austerity in basic programs and services that the vast majority of Americans want or need and a shared responsibility to produce needed revenue.

The Shriver Center acknowledges the Center on Budget and Policy Priorities analysis of the Ryan and Obama plans, on which this piece relies heavily.

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Yesterday the Congress passed a bill that will fund the federal government for the rest of fiscal year 2011.

Overall, the very worst cuts—ones that would have devastated vulnerable Americans and taken us off the road to economic recovery—were avoided. For instance, the appropriations to implement the Affordable Care Act were preserved, which will improve the lives of millions of Americans and save the federal government hundreds of millions of dollars. Our federal funding of education at all levels—from Head Start to K-12 to Pell grants for college, will hold steady. The appropriations to the new Consumer Financial Protection Bureau are intact.

However, there were many deep and important cuts that will negatively affect low-income Americans and their communities.

• 7%, or more than $500 million, cut to WIC, a food program for pregnant women and mothers.
• Nearly a billion dollars from the Community Development Block Grant, which helps communities all over the country with development goals.
• $30 million from the Legal Services Corporation which provides civil legal assistance to low-income Americans.
• $900 million from community health centers.
• Nearly $400 million from the low-income home energy assistance program.
• More than $1 billion in key job training and education programs.

There are tough choices and important work ahead, including the fiscal year 2012 budget, which is being debated now. The cuts made to the federal fiscal year (FFY) 2011 budget, difficult as they are for many low income people, are dwarfed by some of the proposals for cuts being floated for FFY 2012, including the House Republican version that passed the House today on a partisan vote. And the standoff and political difficulties that surrounded the finalization of the FFY 2011 budget six months after the fiscal year began now look easy compared to the fundamental and high-stakes debates that will take place before there is an FFY 2012 final budget. Stay tuned.

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The Illinois General Assembly has a lot of contentious, difficult, and time-consuming items on its 2011 agenda—the state budget, pensions, workers compensation to name a few.

But one item—passage of legislation establishing a competitive marketplace for health insurance where everyone will be able to find comprehensive coverage that is affordable—has already been researched and debated and is ready for a quick decision.

SB 1729, the Illinois Health Coverage Exchange Establishment Act of 2011, is the product of months of work by the Illinois Health Care Reform Implementation Council followed by open and robust discussions about the bill’s components and language in stakeholder working groups of patient and family advocates, employers, insurers, providers, and insurance producers convened by the Illinois Department of Insurance. SB 1729 is s sponsored by Senator David Koehler and, as of April 11, 2011, 13 other senators.

SB 1729 creates a marketplace in which individuals and small businesses can shop for high-quality, affordable health plans and individuals and families of modest means can enroll in public programs, such as Medicaid or All Kids, or obtain federal subsidies to purchase private health plans. Under the bill, this marketplace, officially called the Illinois Health Benefits Exchange, will be an independent body, governed by a nine-member board representing health care consumers, providers, small businesses, employees, labor, and insurance producers, who are appointed by the Governor and Attorney General, subject to confirmation by the Senate. Strong conflict-of-interest rules will keep board members focused on the public good, not narrow interests.

The Illinois marketplace needs to be up and running by January 1, 2014, when many of the federal Affordable Care Act insurance reforms (including no denials for pre-existing conditions and premium prices based only on age, geography, and smoking status and not on health condition) and expansions of coverage for lower income individuals go into effect. Illinois needs to have made substantial progress toward establishment of its marketplace by January 1, 2013, or the federal government will run it for Illinois.

SB 1729 will put Illinois on the road to having an effective exchange operational by 2014 and will allow Illinois to receive $150-200 million in federal funds for implementation. A competing bill, HB 1577, was drafted without any public input, lacks a governance plan, totally ignores the public program side of an exchange, makes preemptive decisions on insurance offerings, and delays Illinois’s progress toward establishing a health insurance marketplace that truly serves Illinois’s small businesses, employees, individuals, and families well.

Those interested in the future of affordable, comprehensive health coverage in Illinois should call their state senator and ask him or her to support SB 1729 and even become a sponsor. Call 1.888.616.3322 (AARP’s health line) to reach your senator.

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Sexual violence is occurring in our nation’s high schools in staggeringly high numbers. Even though it remains an extremely underreported crime, the available data points to its prevalence in secondary schools. Almost 4,000 incidents of sexual battery and over 800 rapes and attempted rapes were reported in public high schools in the 2007-2008 school year. And by the time they graduate from high school over one in ten young women will be forced to have sexual intercourse. Schools are not only in a good position to prevent and respond to sexual violence, but they are also required to by law. Title IX of the Education Amendments of 1972 (“Title IX”) is a federal civil rights law that prohibits discrimination on the basis of sex in education programs and activities. All public and private elementary and secondary schools, school districts, colleges, and universities receiving any federal funds must comply with Title IX. On Monday, April 4, the Department of Education’s Office for Civil Rights released a Dear Colleague letter to explain that the requirements of Title IX cover sexual violence and to remind schools of their responsibilities to take immediate and effective steps to respond to sexual violence.

Students who are victims of sexual violence must overcome major challenges as they try to meet school obligations while coping with the emotional and physical effects of the violence they have endured. In order for students to succeed in school, they must feel safe and attend to their mental and physical well-being. The new guidance reinforces schools’ Title IX obligations to create safer schools for both individual students who are survivors of sexual violence and the entire student population, and suggests steps to make that happen.

School’s Responsibilities under Title IX
The letter provides clear explanations of each school’s responsibilities to respond to sexual violence and examples of how a school might fulfill these requirements. The next few paragraphs highlight some of the most important pieces of the guidance. Schools have always been required under Title IX to allow students to file complaints regarding sex-based discrimination. The new guidance clarifies that sexual harassment and sexual violence are included in the umbrella term “sex-based discrimination.” In addition, the guidance clarifies that students can file complaints of sexual violence regardless of where the incident took place. This acknowledges that students may feel uncomfortable in school as a result of an incident that happened off school grounds, especially if the perpetrator attends the same school or other students find out about the incident.

The letter emphasizes that schools must have clear steps for students to file complaints under Title IX and make this widely known throughout the school community. This is especially important in regards to sexual violence—students are already hesitant to report it and are unlikely to look for ways to get help from their schools. Schools have to investigate all claims of sexual harassment and sexual violence, and they have to do this separately from any simultaneous law enforcement investigations, as long as it does not compromise a criminal investigation. In other words, schools have to conduct their own investigations whether or not a student chooses to report the violence to law enforcement or pursue court proceedings, or if a court finds the alleged perpetrator not guilty. The legal standard for a Title IX violation is the preponderance of the evidence standard (i.e., it is more likely than not that sexual harassment or violence occurred), a lower standard than needed to convict someone of a crime.

One of the most important pieces of the new guidance is its requirement that schools are responsible both for ending any ongoing violence and for preventing further harassment or violence from occurring. This shifts the emphasis from punishing the perpetrator to ensuring the victim’s safety. A survivor may need special accommodations to feel safe in school. This means providing a survivor with the option of receiving special accommodations whether or not the perpetrator is punished. The letter gives examples of actions schools can take to prevent further incidents, which range from changing class schedules to providing counseling services. The new guidance stresses that the burden of change should fall on the perpetrator rather than the survivor when possible to prevent re-victimization. 

Ensuring Success in School Initiative
The new guidance offers greater clarification of Title IX as it relates to the challenges students who are victims of sexual violence face in school and prioritizes the safety of students over all other considerations. The Shriver Center applauds the Office for Civil Rights on their renewed commitment to creating safe schools that allow all students to achieve success.

The Women’s Law and Policy Project at the Shriver Center created the Ensuring Success in School Initiative in 2003 to promote the safe and successful completion of school among elementary and high school students who are parents, expectant parents, or victims of domestic or sexual violence. As part of this effort, the Ensuring Success in School Task Force was statutorily created, and in June 2010 the Task Force submitted its final findings and recommendations to the Illinois General Assembly. These recommendations are well complimented by the new guidance from the Office of Civil Rights, highlighting both the national nature of this problem and the responsibility of schools to respond promptly and effectively. Indeed many of the Task Force’s recommendations are included in the clarification of Title IX, making the adoption of the Ensuring Success in School Task Force recommendations even more salient.

For more information contact Wendy Pollack, director of the Women’s Law and Policy Project at the Shriver Center.

Hannah Green, domestic and sexual violence education and economic opportunity specialist at the Shriver Center, contributed to this article.

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On April 12, 2011, Equal Pay Day events will be held throughout the country. April 12 is how long into the new year women must work to make the same amount of money as their male counterparts did the previous year. The Sargent Shriver National Center on Poverty Law is cosponsoring the Equal Pay Day Rally in Chicago at Daley Plaza on Tuesday, April 12, at noon. Illinois Lt. Gov. Sheila Simon, Evelyn Murphy of the Wage Project, and Doris Moy of the Illinois Department of Labor are scheduled to speak. Please join the rally.

This year the Equal Pay Day Rally falls soon after the release of the White House Council on Women and Girls’ first report on the status of women in America. Entitled “Women in America: Indicators of Social and Economic Well-Being,” the report paints a portrait of women’s status in America today compared with men’s and highlights women’s gains of the past fifty years. Women have made considerable gains in their participation in education and the workforce, but a wage gap persists between men and women. For this reason, this year’s Equal Pay Day is especially relevant.  

Women’s Employment Rates
According to the report, more women are employed now than ever before. Women’s labor force participation rates have risen over the past few decades, whereas men’s have declined. Still more men are in the workforce than women, but the gap between the two has decreased: in 2009 the labor participation rate for women was 61 percent; for men, 75 percent. Having affected fewer women than men, the recession has narrowed this gap. Whereas men’s unemployment rate doubled during the recession from 4.4 percent to 9.9 percent, the unemployment rate for women rose less, from 4.4 percent to 7.7 percent. This difference can be attributed to the recession-caused unemployment having affected mostly male occupations. For example, in manufacturing, production, and construction—overwhelmingly male occupations—unemployment rates rose dramatically.

The types of jobs held by women have also shifted over the past fifty years. Women today are more likely to hold business and finance jobs, although women still lag far behind men in this category. Women hold 14 percent of all management, business, and finance jobs today, up from 9 percent in 1983. However, one-fifth of all women in 2009 were employed in just five occupations: secretaries, registered nurses, elementary school teachers, cashiers, and nursing aides. 

Women’s Education Rates
One reason for the improvement in women’s labor participation is that women are pursuing education in much higher numbers. More women than men are enrolled in college and graduate school, and women have higher graduation rates than men across all academic levels. In 2008, 72 percent of women who graduated from high school enrolled in college the next school year as opposed to 66 percent of men; women made up 57 percent of total undergraduate enrollment.

Disparities are notable in the types of degrees that men and women pursue—mirrored in the gender segregation of certain fields. Although women earn more bachelor’s and graduate degrees overall, historically male-dominated fields such as engineering and mathematics continue to be overwhelmingly male. Women receive fewer than half of all bachelor’s degrees conferred in mathematics and the physical sciences. Health care and education continue to be mostly female.  

The Persistence of the Wage Gap
Women’s gains in labor force participation and educational attainment have not been matched by gains in wages. As women have received more degrees, their earnings have increased—up 33 percent since 1979—but not enough to equal men’s average annual earnings. Across all levels of educational attainment, women still earn only 75 percent as much as their male counterparts. For the average working woman, this pay gap will account for a loss of $430,000 over the course of a career, according to a recent report of the U.S. Congress Joint Economic Committee. The gap is even wider for black and Hispanic women, who earn 71 percent and 62 percent, respectively, as much as male workers. Because of this wage gap, women would have to work from January 2010 until April 12, 2011, to earn as much as men earned in 2010.

Not only does the wage gap persist between men and women in the same profession, but also women tend to occupy positions with lower average salaries. In 2009, compared to only 32 percent of professional men, 70 percent of professional women worked in education and health care, relatively low-paying fields. The fields in which women are least likely to get a degree or pursue a profession—mathematics and science—have the highest wages.  

The Wage Gap and Poverty
Women’s earnings increasingly constitute a sizable share of family income, and more households are headed by single women than single men. Family earnings, however, are the lowest among female-headed households, and those with children earn 30 percent less than those without children. Poverty rates for households headed by an unmarried woman with children have consistently remained high. Over the past forty years, in large part due to the wage gap, these households have had poverty rates two to three times higher than the overall poverty rate in the United States. Mothers see on average a 2.5 percent earnings decrease per child whereas men see a 2.1 percent earnings increase. The disparities are even starker for black and Hispanic families. In 2009 more than 25 percent of all black and Hispanic women had family incomes below the poverty line. 

Looking Forward—Equal Pay Day Rally in Chicago
“Women in America” presents promising data on the progress of the past fifty years, but it also shows the inequalities that remain. The wage gap persists in spite of major gains in educational achievement, with the result that female-headed households are the most impoverished. Please join the Shriver Center, Women Employed, and many other individuals and organizations at the Equal Pay Day Rally to show your support for equal pay and continue the fight for equality.

For more information, contact Wendy Pollack, director of the Women’s Law & Policy Project, Sargent Shriver National Center on Poverty Law.

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