Progress Illinois

Yesterday, the proposal to create a Consumer Financial Protection Agency (CFPA) cleared a major hurdle when it passed the House Financial Services Committee. Regular readers know that the future of the agency -- which has been a top priority for consumer advocates critical of the federal government for its lax regulation of predatory lending and other risky financial products -- has seemed touch-and-go at times. After months of heavy lobbying by the banking industry and the willingness of the conservative "New Democrats" (led by Illinois' own Melissa Bean) to do their bidding and weaken the agency's proposed powers, the CFPA bill (H.R. 3126) was approved with its teeth largely intact.  That being said, portions of the original bill were certainly weakened, according to the Wall Street Journal:

Lawmakers made several significant changes to the White House's original proposal during a week of debate, particularly in response to lobbying from business groups. For example, they voted overwhelmingly to exempt automobile dealerships from any scrutiny by the new agency, a major win for dealerships that rake in high fees from auto financing. That change may not make it into the final version of the legislation.

The agency would be charged with policing consumer financial products and practices, such as mortgages, credit cards, and overdraft fees, regardless of whether they are offered by banks, finance companies, or most any other type of firm.

Consumer advocates are keeping the pressure on to see that some of those banking-friendly concessions are reversed as the bill winds its way through Congress.

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Big banks have been doling out wads of cash and stepping up political pressure on Capitol Hill in an effort to kill a package of new consumer protections. But following the latest surge in profits, along with a series of decisions to hand out historic bonuses at a time when consumers are being saddled with exorbitant fees and arbitrary rate hikes, they are losing sympathy in Washington. Even Illinois' own Rep. Melissa Bean, who agreed to introduce an amendment that would weaken the proposed Consumer Financial Protection Agency (CFPA) as the lead negotiator for the "New Democrats," appears to be taking the side of the consumers advocates who've been giving her an earful lately. The Washington Post has the details:

Large banks are on the verge of losing a key legislative battle over the shape of financial reform, an unusual setback that reflects the continued political backlash over their role in creating the financial crisis [...]

The debate came to a head last week. Bean's group said it would propose an amendment to retain the current [preemption] law. Liberals warned that if the amendment drew enough Republican support to pass, they would oppose the broader legislation to create the new agency. House leaders and the White House pressured Bean and the moderates to fall in line.

Despite tremendous pressure from the banking industry, Bean ultimately agreed.

We put out a call to Bean's office and her spokesman said only that "it's unclear" what will transpire in the House Financial Service Committee tomorrow. However, The Hill reports that Bean plans to introduce her amendment then withdraw it with the understanding that the issue will be discussed if and when the measure makes it to the House floor. The Woodstock Institute's Tom Feltner tells us that the latest developments are a step in the right direction but the battle over consumer protection is far from over.

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Yesterday we noted that Illinois' own Melissa Bean appears poised to introduce an amendment that would assist the banking industry by taking the teeth out of the proposed Consumer Financial Protection Agency (CPFA). As the lead negotiator for the New Democrats on the House Financial Services Committee, Bean is attempting to preempt states' authority to set and enforce stricter protections against the risky financial products that have made the financial services sector billions. That measure could come up for a committee vote as soon as Thursday. And Illinois Attorney General Lisa Madigan is already pushing back, telling Bean and her fellow members of Congress that its time to "put the interests of our consumers before those of the banks." From a release:

“To truly protect consumers and ensure that the current economic crisis cannot happen again, the proposed federal agency must be able to coordinate enforcement efforts with state and local agencies,” said Madigan.  “It is absolutely critical that states be allowed to continue to investigate abusive practices by major players in the financial services industry, regardless of whether these institutions have a state or national charter; and to enforce our state consumer protection laws against all lenders doing business within our borders.” [...]

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Illinois' own Melissa Bean has become a divisive figure on Capitol Hill these days. As the lead negotiator for the New Democrats, the North Suburban congresswoman has become a key ally to the financial services industry as they continue to fight the creation of a Consumer Financial Protection Agency (CFPA). As we recently noted, Bean is thought to be preparing a banking-friendly amendment that would water down the long-overdue consumer protections being pushed by the Obama administration. According to Reuters, she's poised to act sooner rather than later:

A Democratic lawmaker hopes to derail congressional efforts that would allow states to adopt stricter laws for firms offering mortgages and other financial products, a source familiar with the matter said on Monday.

Democratic Representative Melissa Bean could as early as Wednesday propose an amendment to a House of Representatives bill that would remove a provision giving states more rights over federal laws to protect consumers from risky financial products, the source said.

While the language of Bean's amendment has yet to be unveiled, the goal is apparently to preempt states' authority to set and enforce the sort of strict rules that would protect unwitting consumers from getting gouged by risky financial products. Among the outspoken critics of a preemption clause is Illinois' own Attorney General Lisa Madigan, who has repeatedly made the case for why more robust state rules are essential to protecting consumers. The Woodstock Institute explains:

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Last week, the House Financial Services Committee Chair Barney Frank (D-Massachusetts) finally rolled out a draft proposal (H.R. 3126) to create a consumer protection agency that would be tasked with regulating the risky financial products -- subprime mortgages, credit cards, payday loans --  that have brought American consumers to their knees. Considering that entire city blocks are mired in foreclosure and thousands of households are buried in high-interest rate credit card debt, it's not surprising that there's overwhelming public support (PDF) for the federal government to provide oversight of the get-rich-quick instruments cooked up by Wall Street. But after months of deliberation, the proposed bill is weaker than many had hoped. Even so, banks are still unsatisfied, arguing that the reforms are too cumbersome.  And it appears that Illinois Rep. Melissa Bean (D) is lending them a hand by proposing to strip the Consumer Financial Protection Agency (CFPA) of even more regulatory power. Politico reports:

[M]oderates, who are members of the centrist New Democrat Coalition, are unhappy with proposed bill language that would force federally chartered firms to comply with state consumer protection laws. The moderates want to maintain the status quo, in which financial institutions that elect to have a national charter are exempt from additional state consumer protection laws.

Rep. Melissa Bean (D-Ill.), a lead negotiator for the New Democrats, told POLITICO on Tuesday that their position on pre-emption would most likely be offered as an amendment rather than changed by Frank in the existing bill, though talks are still ongoing.

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BaucusCare is here! That, and the latest local news in today's health care round-up.

Health Care Professionals Demand Real Reform

Before we get to the Senate Finance Committee, be sure to watch the latest video courtesy of the Sargent Shriver National Center on Poverty Law and United Action for Power and Justice. In it, we hear from three health care professionals who are on the ground in Illinois helping people navigate through the treacherous health insurance industry:

BaucusCare Introduced ... Finally

After months of anticipation and fractured bipartisan negotiations, Sen. Max Baucus (D-MT) finally released his committee's proposal (PDF) to remake the nation's health care system yesterday.

On policy, it's a mixed bag. (I'll rely a good deal on Ezra Klein's blogging from yesterday, as it's the most substantive I've seen. Be sure to check out his Washington Post site for the nitty gritty.)

To be clear, there are some glaring problems with this bill. For starters, no public option is included, as was expected. Instead, a co-op proposal, described by Klein as "neutered," has emerged. No employer mandate exists, either. Also, rather than require employers to cover their workers, the bill relies on something called "free rider" requirement, which would merely slap a fee on those who refuse to provide coverage to workers if those workers qualify for federal subsides.  The Center for Budget and Policy Priorities points out this provision's massive flaw: it discriminates against low-income workers, specifically single parents.  Dana Goldstein has more.

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Here's our latest health care round-up:

Reconciliation Is On The Table

As you've probably heard by now, the latest news from Washington -- as reported by the Wall Street Journal -- is that Congressional Democrats are considering splitting health care legislation into two parts if the Gang of Six can't reach a sensible agreement in the Senate Finance Committee. The first bill would include non-budget items with broad support -- insurance consumer protections, establishing the health insurance exchange and a co-op system, small subsidies for people who can't pay premiums -- that could pass the Senate with more than 60 votes and avoid a filibuster.

The second would include many progressive elements of the reform effort that effect the budget and could thus be considered under the reconciliation process. Under this scenario, 51 senators would have the leeway to push through measures like a broad expansion of Medicaid, new taxes on individuals or employers, more generous subsidies for people buying insurance, cost-saving Medicare and Medicaid reforms, and possibly a public plan. If the GOP and conservative Democrats show no interest in legitimate compromise, the theory goes, then mainstream Democrats should leave them behind and pass a meaningful bill on their own terms.

The tactic might backfire. After all, Republican senators might not approve of the first bill, even if it means voting against common-sense and widely-popular insurance regulations, if they think they are clearing the path for President Obama's full agenda. But that the plan is being considered -- and discussed publicly -- shifts the Congressional debate in the right direction, argues The New Republic's Jonathan Cohn:

But even the theoretical possibility of Democrats passing reform on their own would change the dynamics in Congress, by giving Republicans new incentives to negotiate in good faith--and giving Democrats a way to enact legislation in case the GOP remains as obstructionist as it is now.

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Here's the latest Illinois-centric health care news:

Citizen Action Targets Bean, Halvorson, Foster

In today's edition of Crain's, Paul Merrion writes that, when it comes to health care reform, suburban Reps. Melissa Bean, Debbie Halvorson, and Bill Foster are all "stuck in the middle, still uncommitted and coming under pressure from both ends of the political spectrum."  On the left, Citizen Action/Illinois is doing its part to push these moderate reps towards supporting a public option:

"The next five or six weeks will determine whether we have a strong health reform plan or a weak one," says John Gaudette, Illinois health care director for Citizen Action, a non-profit advocacy group leading local efforts for Healthcare for America Now, a national coalition pushing for a low-cost government-run plan to pressure private insurers' premiums.

Two weeks ago, Citizen Action generated more than 1,000 calls to the three moderate Illinois Democrats, urging them to support a strong government-run plan, and the group is planning a rally with upward of 300 people in Ms. Bean's district later this month. "She's the one we've been focusing on the most," Mr. Gaudette says.

Office Visits For Health Reform

Over the weekend, Organizing for America urged supporters of health care reform across the country to schedule a visit to their congressman's district office.  From their email blast announcing the "Office Visits for Health Reform" action: 

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Here's our latest health care round-up:

Senate Finance Closer To Deal

The Washington Post has the scoop of the morning, reporting that Senate negotiators in the crucial Finance Committee -- the only committee with jurisdiction over health care that hasn't yet passed a bill -- may be close to reaching a bipartisan agreement. The "Gang of Six" will meet with President Obama today to discuss those details, which don't look promising with regards to the public option:

The emerging Finance Committee bill would shave about $100 billion off the projected trillion-dollar cost of the legislation over the next decade and eventually provide coverage to 94 percent of Americans, according to participants in the talks. It would expand Medicaid, crack down on insurers, abandon the government insurance option that President Obama is seeking and, for the first time, tax health-care benefits under the most generous plans. Backers say the bill would also offer the only concrete plan before Congress for reining in the skyrocketing cost of federal health programs over the long term.

The committee also seems to be coalescing around an idea pushed by Sen. John Kerry to raise revenue by taxing insurance companies on their most-expensive policies. Unlike the 2 percent surtax on the wealthy, this option has broader support.

How high the subsidy levels for the uninsured will extend and how the Medicaid expansion will be structured is still unknown. But right now, the objective is to get something out of committee by Obama's September 15 deadline to keep the ball rolling. If that can't be done in a bipartisan fashion, Obama says the Democrats may have to go at it alone. "I promise you, we will pass reform by the end of this year," he said in Indiana yesterday, "because the American people need it."

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As the national battle over health care reform enters a crucial stage and lawmakers make their case to voters during the August recess, we're going to be regularly tracking the latest health care news across Illinois. Here's our first update:

Schock's Misleading Memo

While Illinois Democrats were busy advocating for comprehensive health care yesterday, Illinois Republicans kept up their effort to stand in the way of such reform. This morning over his Twitter feed, Rep. Aaron Schock sent along a memo, prepared by Republican Whip Eric Cantor (R-WI), providing (PDF) "key facts about the House Democrat health care bill for the 18th District of Illinois." But as you'll see, Cantor and Schock use the term facts rather loosely. Here's the first of many distortions in the two-page sheet:

Independent analysis by the Lewin Group shows that 2 out of every 3 people would lose their current coverage, including up to 114 million people who receive health benefits through their employer or other current coverage if a government-run plan “competes” with private companies.

The Lewin Group is hardly "independent." In fact, it's "wholly owned" by UnitedHealth Group, one of the nation's largest insurers. And the Congressional Budget Office released a preliminary analysis (PDF) of the House Democrats' so-called "tri-committee" bill last week and found that a net 3 million people will gain employer-based insurance under the Democratic plan.

But Schock and Cantor aren't done:

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