#StopTheDebtTrap

How the Consumer Financial Protection Bureau is siding with predatory payday lenders over consumers; why many baseball players are paid less than minimum wage; PLUS: Chad Bolt joins with the news of the week ICYMI. Subscribe to Off-Kilter on iTunes.

This week on Off-Kilter… just weeks after forcing hundreds of thousands of federal workers to miss multiple paychecks during the longest government shutdown in US history — pushing many to turn to high-cost credit to stay afloat — the Trump administration is now trying to roll back an Obama-era policy protecting borrowers from predatory payday lenders. Rebecca talks with Lauren Saunders of the National Consumer Law Center about the proposed rollback and how we can fight back.

Later in the show, pitchers and catchers report to Spring Training this week, getting baseball fans across the country (Rebecca included) excited for the start of baseball season. But a little known fact: many of the players at spring training aren’t being paid. And the rest of the year, many minor leaguers make less than the minimum wage. Rebecca talks with Pat Garofalo of TalkPoverty.org about why.

But first: Chad Bolt is back for another ICYMI roundup taking a look at what we’re learning about the winners and losers from the #TrumpTaxScam now that filers are starting to get refunds (and to be Rebecca’s tax policy valentine)… plus the rest of the week’s biggest stories.

This week’s guests:

• Chad Bolt, associate policy director, Indivisible
• Lauren Saunders, associate director, National Consumer Law Center
• Pat Garofalo, managing editor, TalkPoverty.org

For more on this week’s topics:

• To learn more about the Trump admin’s attempt to roll back protections against predatory payday lenders — and submit a comment in response to the proposed rule — check out stopthedebttrap.org
• Read Pat Garofalo’s piece for TalkPoverty, “The MLB makes millions on minor league players. It refuses to pay minimum wage.”

For more on this week’s ICYMI topics:

• Read up on why some folks are seeing smaller tax refunds than expected, and what it might have to do with Trump’s tax law
• Dig into the new survey data finding that a whopping 62% of furloughed federal workers depleted most or all of their savings during the shutdown
• Learn more about why February marks Valentine’s Day for millionaires via a massive tax windfall — and how inequality is hurting Social Security’s bottom line
• Learn more about the FAMILY Act in this handy Indivisible explainer
• With 2/13 marking the #1FairWage national day of action, stand with tipped workers (who’ve been paid $2.13/hour for the past 28 years) and say #NoMoreTwoThirteen

What we’re reading this week:

• A (super wonky but really important) study on what really happened in the wake of the 1996 welfare law (spoiler: taking income assistance away from poor families doesn’t just hurt parents, it hurts kids too and with long-lasting negative consequences…)

This week’s transcript:

REBECCA VALLAS (HOST): Welcome to Off Kilter, the show about poverty, inequality, and everything they intersect with, powered by the Center for American Progress Action Fund. I’m Rebecca Vallas. This week on Off Kilter, just weeks after forcing hundreds of thousands of federal workers to miss multiple paychecks during the longest government shutdown in US history, the Trump administration is now trying to roll back an Obama-era policy protecting borrowers from predatory payday lenders. I talk with Lauren Saunders of the National Consumer Law Center about the proposed rollback. Later in the show, pitchers and catchers report to Spring Training this week, getting baseball fans across the country (myself included) excited for the start of baseball season. But a little known fact: many of the players at spring training aren’t being paid. I talks with Pat Garofalo of TalkPoverty.org about why.

But first, Chad Bolt and I’m not even going to mistake you with Rick Perry this week, I’m just going to say it’s Chad Bolt. So how am I doing?

CHAD BOLT: Always appreciated, we’re off to a good start.

VALLAS: We’re off to a great start. So I was just saying before we starting rolling what was I going to do to open this up before we get serious and our producer Will really wants me to talk about space, like he really wants me to talk about space. And I just, I don’t know, it’s not my area Will, so I don’t know that I can talk about this Opportunity rover but if you want to, do feel free.

WILL URQUHART (PRODUCER): No, I’ll let you guys go.

VALLAS: You’re going to let us get into talking about poverty and inequality and you’re going to spare us the — and I really did think you were pitching that because it’s called Opportunity rover and that wasn’t even your sell, so know your audience Will, know your audience. So Chad, it’s tax season.

BOLT: It is, it’s upon us.

VALLAS: Tax season is upon us, I have not dealt with this myself and anyone who knows me is going to be not surprised at all that is the case. But you have been looking into tax season from the standpoint of what it’s telling us about all of Trump’s promises about his tax law.

BOLT: That’s right.

VALLAS: And you’ve got a report.

BOLT: Well, we’re starting to see intial reports at least, and to take a step back we heard when the new tax law was passed at the end of 2017 that this was going to be a boon for American workers, that this was designed to help the middle class and that this was going to bring about economic miracles.

VALLAS: I love that as you’re saying this you’re actually laughing, you can’t even say it without laughing at it but please continue talking about the economic miracles that were promised.

BOLT: Totally, and you may remember that initial reports after passage of the tax law and some of the initial economic activity that we saw as a result didn’t really bear that out. And that shouldn’t come as a surprise because when your tax law is centered around slashing the corporate tax rate, exempting millions more in estate value from the estate tax, opening up an entire new tax loophole for private law firms, hedge funds and the Trump Organization, the pass through deduction and you’ve lowered rates for the very top incomes, it shouldn’t come as a surprise that those things didn’t really benefit the middle class but it was a huge windfall for the wealthy and corporations. Nevertheless, we keep hearing that the middle class is going to be so much better off after this tax law.

VALLAS: As recently as last week, it was Trump in his State of the Union where he was telling us, he called it a working families’ tax law, he said it’s especially helping blue collar workers and wages are going up, he said a lot of things there.

BOLT: Yep, and so it’s tax time and this is really the last opportunity for Trump’s tax law to prove us wrong. We knew that it was not going to be the economic miracle for working families that Trump promised. But it again, it’s tax season, now is the time for us to be proven wrong and that is not what we’re seeing so far. What is clear however, what we’re seeing is reports that folks are getting smaller than expected refunds and that actually has more to do with the IRS and the withholding tables that are used to calculate how much employers withhold from your paycheck every week in taxes.

VALLAS: You’re getting nerdy Chad, I like it, you’re going to the withholding tables, bring it on, don’t stop there.

BOLT: I do want to be clear because a lot of folks are saying ah, see, here’s the evidence, we knew that the thing was a scam. And it is true, it is a scam, but it’s not because — God, I’m getting really worked up. This is the most worked up I’ve ever been.

VALLAS: You are, Chad I feel like I only see you this worked up when you’re talking about a certain person number 1’s tax returns needing to be released. But maybe it’s just all of tax that gets you worked up, don’t stop.

BOLT: It really is, I’m about to go to paid tax preparers in just a second.

VALLAS: Oh.

BOLT: For the record, for the listeners’ knowledge, I was literally waving a finger in the air a second ago.

VALLAS: The temperature in this studio is climbing as Chad continues to talk about taxes and we haven’t even got to paid tax preparers. So you were just saying people were getting smaller than expected refunds but let’s not make too much of that but you were going to continue.

BOLT: That has more to do with the withholding tables being used to withhold taxes from people’s paychecks. And keep in mind, we actually don’t know, it could be that the Trump administration pressured the IRS to adjust those withholding tables to make it look like people were getting a big tax cut from the tax law, even though they knew that this could cause people to under-withholding the amount of taxes and that they would actually end up owing come tax season.

VALLAS: So there actually could be nefarious intentions that are driving this. We don’t know that yet but that is something that some experts are speculating.

BOLT: Yes, we don’t know that that’s not the case so I want to be careful. I’m not suggesting that’s what’s at hand.

VALLAS: But it could be.

BOLT: Although it might be something worth looking into if these reports continue but that’s not clear is who are the winners and losers of this tax law?

VALLAS: Something that we’ve all been putting estimates to and that people have been putting aggregate numbers to but now we’re seeing it in a kitchen table way, and that’s I think where you’re about to go with this.

BOLT: Yeah I think I would just encourage folks to think about the windfall or not so much windfall they’re getting this year in terms of their taxes versus the windfall that say, big banks got totaling in the billions of dollars in tax relief. The windfall that corporates got and instead of using to hire new workers or raise wages they instead decided to enrich their shareholders in the form of stock buy backs.

VALLAS: Something that we talked a lot about last week, code for making your shareholders even richer than they already around.

BOLT: Indeed, the windfall that pharmaceutical companies got on their tax bill even as they raised drug prices so it’s clear who won out and who did not. So that’s the tax law side of tax season but it might be worth getting into some other policy stuff too.

VALLAS: I should say, it’s not that now that I know how you feel, now that I’m being reminded how you feel because Chad before you went to Indivisible you used to work on tax issues almost all the time.

BOLT: I did.

VALLAS: Back in the day when you were at the organization formerly known as the Corporation for Enterprise Development, CFED, which is these days called Prosperity Now.

BOLT: Indeed and they do such great work around tax time as an opportunity for savings for working families. And there’s one big policy element that comes up every year around tax time and that’s that in most states hairdressers are actually more heavily regulated than paid tax preparers. And why is this a problem? It’s actually the majority of paid tax preparers don’t go through any formal training, they don’t have any formal certification, they’re not subject to any state or federal regulation and that’s a problem because it leads to predatory practices. It means that they draw people in the door with a promise of a big refund but then they take a huge slice of that refund out and people actually lose out on substantial chunk of the refund that they’re supposed to get because they have to pay it in preparation fees to this unscrupulous preparer. Or it could be that their return is just not prepared accurately, which leads to more problems down the road. So there is an urgent need to regulate paid tax preparers, it may sound like a wonky thing but it would actually go a long way.

VALLAS: And some of that comes down to not just the accuracy of the returns that they’re filing, which is hugely important and is especially important for lower income folks for whom tax refunds can be a substantial portion of their income throughout the year, especially if they the EITC for example, the Earned Income Tax Credit or the Child Tax Credit, that’s another really important source of income that comes in that lump sum form at tax time for folks.

BOLT: Exactly, it’s actually the biggest lump sum savings opportunity that a lot of families have throughout the year. They use it to make a car repair, to pay down bills they have, a lot of folks have already spent, like mentally spent their refund before they get it, either over the holidays or again just to pay down debt that they have, cover an emergency or unexpected bill. So they really rely on this refund that they get at tax time.

VALLAS: So really important that it be accurate but also to have a huge chunk taken out for fees that can be charged all kinds of exorbitant rates because there is no regulation of this industry, just another way that low income folks are being preyed on.

BOLT: Yep, that’s exactly right. And one of the most accurate tax preparers out there is through the program called the volunteer income tax assistance program, the VITA program, the volunteer income tax assistance program.

VALLAS: I love VITA, huge shoutout to all the people out there who are VITA volunteers who are doing that work right now.

BOLT: Yes and they’ve got a 94% accuracy rate. So would encourage to find people, if you’re looking for help preparing your tax returns, would encourage you to find out if you’re eligible for help from a VITA provider near you.

VALLAS: And we’ll have a link in the syllabus page about where folks can find out more information about VITA if that’s something that they’re looking to do. So Chad we promised, while we’re talking taxes, we promised last week to give a quick readout, and I want to keep our promises unlike our person number one. We promised to give a read out on a particular hearing that was happening last week that you of all people were monitoring with interest.

BOLT: Yes.

VALLAS: And that of course was a hearing where the concept of maybe the Democrats in control of the House asking for Trump’s tax returns came up.

BOLT: Yes, so I obviously can’t let tax season go by without talking about the need and the great expectation among the American people that Trump’s tax returns get obtained by the House Ways and Means committee.

VALLAS: Honey.

BOLT: Honey, they’ve got existing authority to do it and so there was a hearing on this subject last week in the Ways and Means Oversight subcommittee the good news is HR 1, the new pro-democracy reform package that’s moving through the House, Title X of that bill has a requirement that presidents and vice presidents release their tax returns hoping that the bill can be amended by the way, to include business returns as well because there’s a lot that we could learn from this particular president’s business returns. But there was also a lot of discussion at this hearing not only about the requirement in HR 1 to do this but about the committee’s existing authority to do it. There was a panel of experts convened and they all agree, I don’t think anyone questioned that the committee had the authority to see the returns and that they should, but they also discussed everything that the American public could potentially learn from getting the returns. The extent to which he has foreign business entanglements that present a conflict of interest when he’s conducting foreign policy, the extent to which he’s benefitted from, he’s personally benefited from the tax law that he’s pushed through congress, the extent to which he has even paid the taxes that he owes or whether he continues to engage in the kinds of tax avoidance schemes that were exposed by The New York Times in October of last year. So I think this hearing really helped to convey the urgency and the interest among Democrats about getting this done. Listeners of the show will remember that I’ve said before that the Chairman of the House Ways and Means Committee Richie Neal is perhaps moving methodically but not with the sense of urgency that we’d like to see around getting this done. And so I hope that he got a sense of that urgency from his members through this hearing and again, it totally validated the committee’s authority to do it.

VALLAS: So Chad, it pains me to bring up our next topic because I’m still so over it I can’t even stand it, and of course that is the government shutdown.

BOLT: Yes.

VALLAS: So I’m going to spare us here on the horse race, there’s a lot going on literally as we’re taping that is going to make this a minute to minute conversation. So rather than having a whole conversation about what we know right now, let’s let the other shows do that. What I would like to focus on, recognizing that congress is likely to strike a deal that avoids a shutdown and maybe it’s an 11th hour deal and we’ll all be doing the nailbiter thing, especially 800,000 plus federal workers who are wondering are they about to be sent home pay again, to say nothing of the contractors who never got backpay after the last shutdown. So I’m going to save us having to do all of that right now but what I would love to bring up is actually there’s a new set of numbers that come to us from a survey done by Prudential Financial that are helping to show that the toll the shutdown took was in a lot of ways even more substantially economically on a massive swath of this country than anyone had any idea was the case. What do we know from this new survey.

BOLT: So some of the top line figures that we learn are that 62% of federal workers depleted all or most of their savings.

VALLAS: 62 percent.

BOLT: I know, that is a staggeringly large number. And it’s easy to understand why they may have to do that. They missed multiple paychecks over the course of this shutdown and one of the things that it underscored is not only federal workers but just how many American families generally don’t have enough in savings to whether a financial emergency. So 62% of federal workers all or most of their savings —

VALLAS: You told us last week actually I think it was, or maybe the week before, I don’t know, every day is blursday to me, that we had new analysis actually from your former employer, Prosperity Now, telling us it’s 40% of American households couldn’t weather a —

BOLT: Couldn’t live three months at the federal poverty level.

VALLAS: That’s what it is.

BOLT: Yes.

VALLAS: So basically 40% of this country is a paycheck away from poverty.

BOLT: Yeah, that’s exactly right including many federal workers. 42% of federal workers took on debt to make ends meet through the shutdown, which I think you’re going to talk about later in the show.

VALLAS: And actually it is a great teaser for one of our later conversation where we’re talking about payday loans, which are likely a big part of that debt that folks were taking on if they weren’t able to make ends meet, so plug, I’ll be talking to Lauren Saunders of the National Consumer Law Center later in this episode about how for a double whammy, the Trump administration is also now rolling back or trying to, really important protections against predatory payday loans so taking with one hand and the other hand from federal workers here who might now be in that boat.

BOLT: Yeah, it’s just a disgrace. One in four federal workers tapped their retirement accounts to make ends meet during the shutdown, can you imagine? And keep in mind, a lot of American families actually won’t even be in a position to tap their retirement account because they don’t have one. But to have to resort to that degree of action o make ends meet, terrible.

VALLAS: An action that I think is going to have, all of these things illustrate really long term consequences. We already have a looming retirement crisis in this country and people aren’t able to retire with the security that they’ll not be eating cat food into their golden years and so when people take money out of their retirement accounts for right now to make ends meet right now, that is a terrible state of affairs that people are unlikely to be able to reverse because that would take putting money right back in, which would mean having more money than you need at this money right now in a way that we are very clearly putting numbers to the fact that most people don’t have that if they’re in this boat.

BOLT: And that issue is going to come up at least two more times in this segment so put a pin in that. And finally, one in four federal workers had to visit a food bank during the shutdown.

VALLAS: Because grocery stores don’t accept IOUs, just a quick reminder, quick reminder, weekly reminder of that one.

BOLT: Donald Trump.

VALLAS: So really startling new numbers coming out of this survey that again show the tremendously long lasting impact that this government shutdown is continuing to have and will continue to have on American families’ financial outlooks, even if the shutdown does not come back and knocking on all kinds of wood that as we are, as listeners are actually listening to this we are not back in shutdown although that isn’t where it looks like we are headed. So Chad I’m going to close the book on shutdown because that’s about all I can take of that again. Still very done with it.

BOLT: Let’s move on.

VALLAS: There’s other stuff going on in congress and it’s stuff I would much rather talk about because it’s the kind of policies that the American people have been clamoring for and we’re actually seeing them get some real traction. It start with something to do with paid leave.

BOLT: That’s right, and if I can just for a second highlight, that was a beautiful segue.

VALLAS: You liked my segue?

BOLT: I’m a fan of good segues.

VALLAS: You are.

BOLT: But just to comment on the segue itself —

VALLAS: Wait wait, you’re commenting on my segue?

[LAUGHTER]

BOLT: The contrast between the disastrous policies of the Trump administration ravaging American families, ravaging our economy in furtherance of his xenophobic agenda over a border wall and what we’re about to talk about, which is what’s moving through the House of Representatives controlled by the Democratic Party, things like paid leave, Social Security expansion, Green New Deal, that should, that contrast should really hit home for voters and it should really build in people’s minds as we look ahead to 2020.

VALLAS: So take us to the paid leave part of that because it’s really, really exciting.

BOLT: So yeah, there was a new bill introduced in congress this week by Senator Gillibrand and Congresswoman Rosa DeLauro and it’s called the Family Act. And again, this is about providing workers with paid family and medical leave. So you might so don’t we already have that? And we do have, there’s an FMLA poster hanging about my water cooler. So we do have FMLA and that’s an important law in itself. It provides job protections to workers who are eligible although 40% of workers are not.

VALLAS: An acronym alert, the FMLA is the Family and Medical Leave Act.

BOLT: Yes, thank you for filing in that blank.

VALLAS: I do what I can.

BOLT: So it provides job protection to workers who need to take certain types of leave but what it doesn’t provide is financial security because the leave isn’t paid. And so what this would do is provide 12 weeks of paid time off for birth or adoption of a child, taking care of a parent, spouse, or child for your own care. And how it would work is workers and their employers both make a small contributor, it’s about 2 cents for every $10 in wages via payroll deduction and that goes into a fund that disperses the benefit out to workers when they become eligible for it. This is actually a really popular idea both among Democrats and Republicans.

VALLAS: Just not those in congress.

BOLT: That’s right, yes, I should clarify. The American people strongly support this idea, not so much Members of Congress on the Republican side. But I’m glad you mentioned that, Rebecca, because given the tremendous popularity of the idea, it’s not surprising the Republicans have tried to elbow their way in on it. The problem is they are providing their own versions of quote, unquote “paid leave” that fall way short of what workers actually need.

VALLAS: And I would go a little farther and call them not even lip service, it’s basically they’re trying to make it look like they back the idea when nothing could be further from the truth and they want credit for what they don’t deserve for having good talking points and really crappy policies. So tell us why that is, Chad.

BOLT: That’s exactly right. So you already mentioned earlier the retirement crisis that is looming in our country and the importance of a strong Social Security program that Americans can rely on. So the Republican paid leave imitation plan actually just forces people to choose between dipping into their Social Security benefits now and using it for paid leave or deferring their Social Security benefits, essentially starting to collect Social Security later in life down the road.

VALLAS: It’s not even robbing Peter to pay Paul because at least Peter and Paul are different people that you’re dividing and conquering.

BOLT: Just robbing yourself.

VALLAS: It’s robbing you to pay you so that Republicans can pretend that they cared about you. That’s what this proposal is.

BOLT: Yep. Make no mistake. There are other imitation plans out there too, in fact we’ve already talked about the tax law, that had a temporary pilot program intended to incentivize employers to provide paid leave through tax credits. It’s not a particularly strong incentive and I don’t think many will take advantage of it but we’ll see how that goes.

VALLAS: I love when you get diplomatic, Chad. [LAUGHTER] It’s a little bit unsettlingly because it’s not usually your style but in this case I’ll take it.

BOLT: But again, in terms of proposals that have actually been introduced in Congress, the Family Act goes the furthest to help working families with the paid leave that they need.

VALLAS: And you mentioned Social Security and actually I’m going to throw you another high quality segue which is that Social Security hasn’t just come up in the context of Republican proposals to cannibalized existing popular programs to make it look like they care about paid leave, it’s also been really high on Democrats’ list for listening to the American people when it comes to what economic agenda they’re pushing especially in the House where Democrats control the House but also in the Senate and that’s been a big part of the conversation this week in Washington as well.

BOLT: That’s right, there is a new bill introduced this week as well to expand Social Security benefits. Expanding Social Security is a very, very popular idea with the American people.

VALLAS: Very, very, very, popular idea and again, not just with Democrats, also with Republicans, that’s something I think doesn’t get nearly enough attention is how wide the gulf is between what even Republican voters want and where they’re elected officials are on Social Security.

BOLT: And Rebecca, I bet you didn’t know but we are having this conversation, we’ve got a holiday to commemorate.

VALLAS: We have a couple of holidays to commemorate actually. This is a holiday episode in some ways. But are you about to ask me if I have any plans for Valentine’s Day, is that what this is?

BOLT: It could be, would you be my health policy valentine?

VALLAS: Oh my God, I would be your tax policy valentine. [LAUGHTER] I already have a health policy valentine.

BOLT: What?!

VALLAS: Sorry, yeah.

BOLT: This episode of Off Kilter is over.

VALLAS: It’s Topher Spiro! Come on.

BOLT: Fine, fine, fine.

VALLAS: But I’ll be your tax policy valentine, but Valentine’s Day is actually where you were going with this.

BOLT: I thought I was Topher’s health policy valentine.

VALLAS: I feel like I just stepped in it. we’ll hash this out on Twitter later.

BOLT: I’m just kidding, he and I have had no discussions to this effect at all. No, what actually the holiday I was going to mention was Valentine’s Day for billionaires.

VALLAS: Yes, well for millionaires.

BOLT: Yes, millionaires, sorry.

VALLAS: And billionaires too.

BOLT: So you may remember that Social Security is funded through a payroll tax. And the way the law is currently set up is only the first roughly $130,000 of salary is subject to the payroll tax. And how it works in practice is after a millionaire or anyone making more than this per year has earned that $130,000 in pay, they just stop getting the payroll tax taken out of their paycheck. So for the vast, vast majority of American workers they pay into Social Security all year long. For millionaires, they only pay until February 18th.

VALLAS: And if, back to things we would learn if we had Trump tax returns, if Trump is to be believed in terms of how much money he told us he was earning before he got to the White House, Trump would have stopped paying into Social Security forty minutes into January 1st.

BOLT: 40 minutes.

VALLAS: So he doesn’t even make it to Valentine’s Day. Just to put a little bit of a finer point of what you were saying.

BOLT: It’s absurd and eliminating this cap would actually go such a long way to extending Social Security’s solvency. It’s like fake crisis is generated in DC, what are we going to do about Social Security solvency? It used to be that 90% of your yearly earnings were subject to the payroll tax and that changed when Congress instead decided to use an arbitrary number that gradually rises every year. It’s now $132,000. So getting rid of that cap would go a long, long way to extending solvency.

VALLAS: And those sounds pretty wonky but it brings us to the factoid of the week.

BOLT: Yes, let’s get to it.

VALLAS: Drum roll for myself here which I feel like we should rename the Rachel West factoid of the week because this is another week in a row where we’re using a number that our fabulous brilliant friend and colleague Rachel West actually crunched but to dewonkify just a bit what you were saying, roll the clock back to 1983 and back then 90% of earnings that are covered by Social Security were subject to the payroll tax. So we were capturing most of the tax base, that was how the policy was supposed to work. Now fast forward to today and the percentage of covered wages that are actually captured has slipped and slipped and slipped and slipped because rich people, those people we always talk about who have three yachts now thank to the tax law have gotten richer and richer and richer so much so that more and more of their income is escaping that payroll tax cap. And here’s what brings us to the factoid of the week; if that payroll tax cap had stayed fixed so that 90% of covered earnings were actually caught by the payroll tax today Social Security’s trust funds would have $1.4 trillion more in them. there’s your point about Social Security solvency, the culprit here is inequality and the new guilded age that we’re all living through coupled with the fact that policy makers have enacted to update this payroll tax cap or to eliminate it entirely which some people are calling for in a way that would require millionaires and billionaires to pay into the system all year round just like the rest of us. So there you go, your Rachel West factoid of the week.

BOLT: Thanks Rachel.

VALLAS: Thanks Rachel, you’re on the show even when you’re not. So really, really exciting to see Social Security expansion continuing to be so high on the agenda for Democrats, consistent with exactly as you said, what the American people have been clamouring for and the exact opposite of what Trump has actually been delivering despite his promises not to cut the program when he was a candidate. He of course has called for $72 billion in cuts to Social Security, specifically targeting people with disabilities because he’s also a monster, not just someone who breaks his promises. But we’ll leave that there for now.

BOLT: And just to say one more thing and not leave it there for now.

VALLAS: That was such a Colombo move of you, that was classic Colombo, one more thing.

BOLT: Just to underscore all of the economic forces working against working families today is setting us up for this again, this impending retirement crisis, stagnant wages, difficulty saving, a turbulent job market, it’s only going to underscore the need for American families to be able to rely on Social Security when they’ve reached retirement age because these other means of saving for retirement, a majority of American families don’t have a retirement account.

VALLAS: Pensions just aren’t a thing anymore.

BOLT: Yeah, pensions are not a thing anymore, everything is moving, even folks who earned a pension as part of their pay through their working years are now being denied those pension benefits because their employer went bankrupt or there’s just not enough money to pay out the benefits they earned. We are moving towards a situation where American families just will not have savings of their own to rely on for a safe and secure retirement when they get to be that age and so it’s only going to make the value and the need for Social Security that much greater.

VALLAS: So Chad, you helped us mark Valentine’s Day for millionaires, which is actually coming up next week, it’s February 18th but today the day that we are taping, as I pull a classic Jeremy Slevin and reveal the day that we’re taping, which is 2/13 is also a really important holiday and that’s because 2/13 is the amount of money that tipped workers actually earn in this country legally because they have not gotten a raise in 28 years. So we talk a lot on this show about how the minimum wage, the federal minimum wage has not kept pace with inflation, speaking of Rachel we actually had her on a couple of weeks ago talking about this and nerding out on this extensively and the fact that minimum wage workers are taking massive paycuts in real terms because their wages haven’t kept pace. But often part of what really gets buried in the conversation about the minimum wage is that tipped workers, which largely is restaurant workers but is also folks who work for and earn tips in an kind of capacity, that’s nail salon workers, valet folks, there’s a lot of different categorie of tipped workers, people at the airport who are pushing around wheelchairs.

BOLT: And these are disproportionately women and people of color.

VALLAS: Correctly, absolutely, tipped workers are legally able to be paid $2.13 per hour as their base pay. Now some people might be going yeah but they make it up in tips. We’ve talked extensively on this show about the need to raise the tipped minimum wage because of the tremendous volatility that people face, the greater rates of poverty that people face, actually outright discrimination particularly that tipped workers of color can face. And so that’s why today on 2/13 there are restaurant workers across DC and across the country standing up and saying no more $2.13, it’s time for one fair wage. I am a former server who is extremely proud to stand with restaurant workers and other tipped worker in calling on congress to pass one fair wage as part of its efforts to raise the wage and that’s part of why I’m so excited that that bill we were talking about a few weeks ago that has been reintroduced in congress doesn’t just raise the minimum wage to $15 an hour but it makes sure that tipped workers as well as people with disabilities who are also eligible to receive a sub minimum wage below that really paltry federal minimum of $7.25 also are brought up to one fair wage.

BOLT: Yeah Rebecca, there’s so much that I love about you but I didn’t realize that you were a fellow former server.

VALLAS: Oh were you also?

BOLT: I was at a little restaurant at Humblestown, Pennsylvania called the Soda Jerk, which is a 50s style diner right outside of Hershey Park.

VALLAS: Aww.

BOLT: So fun.

VALLAS: I feel like we should talk about this more but not now. [LAUGHTER] So I’m going to make anyone not listen to us do more of this. But join the conversation at #OneFairWage and 2/13, a day to mark as we try to help congress understand that this is a really important action to take so that’s why we’re going to make this our action of the week. Tell workers, tipped workers that you stand with them at #OneFairWage. So Chad, we’re running out of time but we’ve got two more quick things that we wanted to hit on. One of which actually happens to be good news coming to us from the state of Michigan.

BOLT: That’s right.

VALLAS: Oh you’re looking at me, is that one of mine? [LAUGHTER] Alright Chad.

BOLT: I’m going to do Green New Deal and you’re going to do Michigan.

VALLAS: Oh I’ll do this one, ok, thanks Chad. [LAUGHTER] Over to you, Rebecca. So I wanted to give some kudos, this is the opposite of the shame bell, which we’re going to reserve for a later segment in this show actually where it gets rung plenty.

BOLT: Also for ourselves when we don’t give ourselves a good segue.

VALLAS: I know we need the “that was a crappy segue” bell, Will if you could get on that. So as I botch the segue and go to the wrong person because I didn’t go to myself on this one, so I wanted to give kudos to Governor Whitmer in Michigan, the new Democratic governor in Michigan, she just this week in her State of the State speech announced that she is not going to stand by idly and allow jobless workers in her state to lose their health insurance through Medicaid, which is what the Republican controlled legislature had tried to box her into doing, and what her predecessor in the gubernatorial spot in that state had also wanted to see be the case, people might remember that Michigan and Wisconsin power grab moment right during the lame duck legislative session after the midterms had been an immense blue wave in states like those. And so she announced, you know what, I’m actually going to be asking the Trump administration not to have to do this because I don’t want to be stripping jobless and underemployed workers of their health care in my state, that makes no sense. So kudos to you Governor Whitmer, now obviously all of this is subject to what Seema Verma, who runs Medicaid and Medicare for Trump wants to do about this. And so I’m sure this is going to be not the easiest path forward but really, really pleased to see this kind of leadership. This is what democracy looks like.

BOLT: She is not my health policy valentine.

VALLAS: Oh, why?

BOLT: Because she keeps taking Medicaid away from people.

VALLAS: Oh you meant Seema Verma, I thought you meant Governor Whitmer and I was about to be like, yo!

BOLT: No she’s fine, absolutely no, that’d be totally fine with me. I’m talking about Seema Verma she’s trying to take Medicaid away from people who can’t find work, can’t get enough hours at their job, that’s not cool, and that is not health policy valentine material.

VALLAS: She should not be your health policy valentine but Governor Whitmer I think is eligible.

BOLT: That’s fine.

VALLAS: So that was my kudos, opposite of the shame bell, always nice to have a piece of good news, lots to watch on that front to see if that actually does move forward. So we’ll close with what we’re reading Chad, and it’s a pretty wonky thing but it’s this study.

BOLT: Yes, so we also came to find this because of Rachel West, thank you Rachel. So this is a new paper out this week that surprise, demonstrates that taking away cash assistance from poor families in the 90s actually did not result in positive outcomes for their children.

VALLAS: My God, breaking news, this is sort of like when we broke the news that when you pay people more they get less poor, some of the minimum wage research out there. No, this is not going to sound shocking to anyone but it’s actually a huge deal in terms of the research findings here.

BOLT: Yes.

VALLAS: So we’re talking here about a piece of research coming out of the National Bureau of Economic Research, NBER so the ultimate in nerd gold standards and it’s titled super wonk-ily, “The Effects of Maternal Work Incentives on Adolescent Social Behaviors” but you were just doing a really good job of decoding this. What this study looks at is what happened when in 1996 we blew a huge massive hole in the safety net and decided to end cash assistance in this country by transforming a program that used to be called Aid to Families with Dependent Children, AFDC into a program called TANF, Temporary Assistance to Needy Families and in the process basically make the program one that serves almost no poor families with kids. So this study is taking a lot at what happened and in particular what happened to the kids.

BOLT: Right and it’s really intended to get one of the talking points around this issue from the 90s which was that, this was obviously coming from the Republican side but too much from the Democratic side as well, if we just stop giving these handouts to families it will change their behavior, turn them into more upright citizens.

VALLAS: It’s the bootstraps argument.

BOLT: Exactly, exactly that’s a good way to sum it up. And so I just want to read just a sentence from the abstract that I think really ties this up neatly, which is “overall the intergenerational effects of welfare reform on adolescent behaviors were unfavorable, particularly for boys and do not support long standing arguments that limiting cash assistance leads to responsible behavior in the next generation.”

VALLAS: So translation, when you take money away from poor families with kids it not only doesn’t do the boostraps things for the parents it also really screws up the kids and doesn’t teach them some kind of lesson in the creepy paternalistic way that anyone who thought that blowing a huge hole in the safety net to teach poor people a lesson was somehow going to be good social policy.

BOLT: Exactly, no favorable effects on youth behaviors and in fact lead to decreased volunteering, increases in skipping school, damaging property, fighting, increases in smoking, this is a really, really important report because it substantiates everything that we thought we already knew back when this was moving through the 90s in a gold standard research study.

VALLAS: So Chad, I’ve kept you here past your bedtime I’m sure because we’ve had so much to talk about and I’ve botched so many segues but at least I gave you pizza.

BOLT: You did save me a slice of pizza, that was so thoughtful.

VALLAS: Because I consider you my tax policy valentine. See you next week Chad, don’t go away, more Off Kilter after the break, talking about pay day loans which we now know tons of federal workers might have taken out because of all that debt they took on. So don’t go away, won’t want to miss this segment about how the Trump administration is actually looking to make pay day loans even more predatory.

[MUSIC]

You’re listening to Off Kilter, I’m Rebecca Vallas. The Consumer Financial Protection Bureau, or CFPB exists for a simple reason — consumers need their finances protected. But someone should probably tell that to Trump’s newly installed CFPB director Katheline Kraninger because last week the agency under her leadership announced that it will be gutting protections against predator pay day lenders that were an Obama era set of protections scheduled to go into effect in August of this year. So with the fox firmly taking up residence in the hen house I’m thrilled to welcome Lauren Saunders from the National Consumer Law Center onto the show to cut through the wonky jargon about this rollback, what it means for low-income borrowers. Lauren, thanks so much for joining the show.

[…]

LAUREN SAUNDERS: Thanks for having me.

VALLAS: So before we get into what the Trump administration specifically is doing here and what this proposed rollback means and all the wonky process pieces there, I’d love to actually go a couple of levels up and start at the beginning and have you explain a little bit what are payday loans?

SAUNDERS: Sure a classic payday loan is a short-term two-week loan made to somebody who probably can’t afford to repay it. You make see signs of “Fast cash”, “get a quick cash”, “cash advance”, and typically the way they work is you walk in, you bring a copy of your bank account statement showing that you have some income coming in, say you want to borrow $500, you write out a check for $575, the pricing is usually $15 for every hundred that you borrow, you date that check two weeks from today and then you walk out with your $500. The problem is if you don’t have $500 today, you’re probably not going to have $575 in two weeks. Or at least you’re not going to be able to make it to the next paycheck if they cash that check. So they count on people being stuck and having to come back into the store and say please, please don’t cash my check. They say no problem, just pay us $75 and write out another check for two weeks from today. And you get into this cycle of borrowing again and again and again.

VALLAS: And what you’re describing is very intentionally the business model that payday loans are set up on. They, as you said, banking so to speak on people not being able to show up with everything that they owe but that’s not just a concept, that’s not just a hope, that’s actually born out by the numbers. Tell us a little bit about what we know about how payday loans play out in people’s lives.

SAUNDERS: Absolutely, payday lenders count on the loan looking cheap. $15 for a hundred, that doesn’t actually sound so bad. But it actually equates to nearly 400% annual interest and it turns out that 75% of the fees that get paid to payday lenders are from people who are stuck in 10 or more loans a year. This is very much the business model. These do not exist for people to take out a loan, pay it back in 2 weeks and walk away. They are counting on people stuck in that debt trap. Sometimes it’s with the paper check and sometimes they take electronic access to your account and will debit it electronically if you don’t come back in and roll the loan over.

VALLAS: Now one of the statistics that has been actually getting a lot of attention these days and we say it a lot on this show because of what we care about it’s really been breaking through into mainstream media because of the government shutdown. And that’s that 4 in Americans don’t have even $400 in the bank and wouldn’t be able to come up with $400 if they had some kind of an unexpected or an emergency expense. So this isn’t just an issue that’s affecting people who live below the poverty line or even people who might consider themselves to be low-income. That’s a really significant share of the country living a paycheck away from poverty and that’s the population of folks who often turn to payday loans is that right?

SAUNDERS: Yes, there are too many people who don’t have savings and that’s a real problem. But payday loans of course, make things worse. They have this great line that they can tell people in an emergency with a shortfall but that’s not really the way they operate. Most people who are stuck in payday loan debt actually are using them to pay their regular bills to buy food, to buy utilities and it’s not helping them with a one time occasional expense. It just they are stuck in a debt trap because they can’t afford to repay that loan and get through the rest of the month. That’s what they’re counting on and there’s no easy answer to not having enough money. But getting stuck in a predatory loan is certainly worse than doing nothing.

VALLAS: Now a bunch of states have stepped up to the plate over the years and said whoa, this is a practice that we definitely need to regulate and protect people against. Tell us a little bit about how this industry has continued to balloon in ways that have largely been unprotected. And then I’m going to take us back to why the CFPB is so important here as well.

SAUNDERS: Sure 15 states and DC don’t allow payday loans. They have interest rate limits that limit the interest rate, the annual interest rate that lenders can charge at 36% a year or sometimes a little lower than that. And it used to be that all states had that kind of interest rate caps. But over the last few decades a lot of those rate caps were repealed and that’s where payday lenders jumped in. But the most effective protection against predatory lending is limiting the interest rate that lenders can charge because that’s the source of the problem. And in fact voters overwhelmingly support rate limits. Over the last five years, in the last few years five states have voted to cap interest rates at 36% or less including conservative states like South Dakota and most recently this past fall, Colorado.

VALLAS: So now enter the Consumer Financial Protection Bureau, the CFBP and back in 2016 that was when they were actually proposing new rules that would target some of the most egregious and harrowing practices in the industry. Tell us a little bit about the rules that were proposed and which were scheduled to take effect and are now the target of the Trump administration and the Trump administration’s CFPB.

SAUNDERS: Sure, under the first director of the CFPB Richard Courdray, the CFPB spent about five years studying payday loans. Doing their own study, getting a lot of data, getting input from over a million people of all stripes, individual consumers and advocates and the industry and banks and studied all this enormous information to figure out what the problem is and what they could do about it. Now the CFPB does not have the authority to limit interest rates so they couldn’t’ do the simplest and easiest thing. But what they could do was say we’re going to address we’re going to address the worst aspects of the problem — people who are stuck in loan after loan after loan after loan, and we’re going to require payday lenders to do what any responsible bank or responsible lender does, and first assess what a person can afford to repay the loan on its own terms without getting stuck into a debt trap.

So the rule requires lenders to do that basic ability to repay assessement before they can make a loan. There is some wiggle room, let them make up to six loans a year without doing that assessment as long as they don’t get stuck in more than three back to back loans and if the loans are back to back they need to step down in size. For example, the first loan would be $450, you can come back in two weeks and get a loan for $300 and then a third loan for $150 and then you got to pay the break. So that’s the core of the protection of this rule.

VALLAS: Now when the rule was originally proposed and you the National Consumer Law Center, you and a lot of the other folks who work on these issues were all at the forefront trying to help support this important rule, it was estimated at the time that it was going to help struggling families avoid $8 billion in fees from predatory payday lenders every single year. So huge impact expected from these rules if they take effect. I expect you’re about to tell me that number has even grown in the time since those kinds of analyses were being done. But now tell a little bit about what is going to happen if these rules are stopped from taking effect.

SAUNDERS: So as you just said, the impact of these loans on people is huge, $8 billion, probably closer to $10 billion today and the bulk of that are people who are stuck in loan after loan after loan, not people who take one loan and walk away. These are being taken from people who are really hurting. What happened of course is President Trump appointed a new head of the CFPB, Kathy Kraninger and before she took effect there was an Acting Director Mick Mulvaney who reported to Trump. And under the two of them they have proposed to roll back the rule and to gut the key ability to pay requirements and really leave the rule [INAUDIBLE]. They just came out with that proposal about a week ago and the public has about three months to comment on it before they finalize it.

VALLAS: So what is the road ahead for this process? We talk a lot on this show about wonky things like rulemaking and people are very well versed in these kinds of threats because they’ve happened on the Medicaid front, the nutrition assistance front, there was the public charge rule making. So this is another one of those kinds of proposed rulemakings you mentioned that there’s a lengthy comment period. What do people need to know if they want to tae action and raise their voices in opposition to this rollback?

SAUNDERS: It is really important for everybody to weigh in and say what they think and if they don’t think it’s a good idea to let payday lenders’ predatory business model continue and to rollback this rule they should say that. If they have stories that they’ve been impacted themselves, that they have friends or family absolutely write those into the comments. You might say well what good does it do? The Trump administration doesn’t care, Kathy Kraninger doesn’t care. First of all, it’s their duty to consider all the comments and before they can finalize the rule they have to consider what everybody says and they will assess it and do a reasonable analysis of costs and benefits. And it’s our belief that you can’t just take a rule that was adopted after five years of study and enormous data supporting it and say oh, just because somebody else is in charge now we’re going to change our mind and undo the rule. That actually isn’t legal that would be arbitrary and capricious and could be overturned by a court. There’s a good chance that there will be a litigation challenge to this rule and a big part of that litigation is going to be what evidence did the CFPB consider. Did they consider the harm? Did they consider all the comments about the problem? So it’s really important for people to weigh in and even if that’s all on deaf ears it’s critical evidence for whether the agency is going to be acting reasonably or not when it finalizes the rule.

VALLAS: If people want to submit a comment where should they go and what resources should they be aware of that you guys and partners are producing?

SAUNDERS: Sure, I would direct them to the stop the debt trap website, stopthedebttrap.org and that is a website that a coalition of consumer advocates and civil rights groups and faith groups have worked on to put together a lot of information about the payday rule and they can find a lot of information there. For wonks the actually comments would go on regulations.gov.

VALLAS: And I’m sure we’ve got a combination of people who would want to check out both of those sites so we’ll have both of them on our nerdy syllabus page. Lauren in the last couple of minutes that I have with you, the fact that this rollback is actually being championed by the CFPB itself, the agency that is supposed to be protecting consumers from exactly these kinds of practices just adds insult to injury to how absolutely appalling and terrifying this kind of a rule rollback would be if it takes effect. Remind us a little bit about the CFPB and would love to hear your thoughts a little bit about the tremendous and twisted irony of watching this agency cannibalize itself under the Trump administration.

SAUNDERS: Yes, twisted irony is definitely the right phrase here. The CFPB was created in 2010 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act that was passed after the financial crisis. As people probably remember we had huge problems for families and for the economy as a whole when the bank regulators were asleep at the switch, they weren’t paying attention to predatory and unfair practices in the mortgage market that led people to real trouble and a lot of loans that people couldn’t afford to repay, devastating families and communities and of course to really the entire economy. So as a result Congress passed the Dodd-Frank Act and one of the most important things it did was create this new agency to focus first and foremost on consumer protection. Put consumers first, to do studies, research, rules, that complaints, oversee payday lenders and other financial actors and really to focus on consumer protection and for most of the first years of its existence that’s exactly what it did. But obviously it has taken a terrible turn for the worse and people need to speak up and not only to the CFPB but to your Members of Congress and to the media and to let them know that that is not what this agency was enacted to do.

VALLAS: It’s hard for me to hear the story of the CFPB and its origins without thinking about who was then a law professor Elizabeth Warren who was one of the architects of the idea of this agency that became the Consumer Financial Protection Bureau and she actually has this famous quote that rings in my head almost every time I hear the words payday loan, she often likes to say and was saying around the time of the origins of the agency hat it’s impossible to buy a toaster that has a one in five chance of bursting into families and burning down your house but that’s exactly what these products are when you think about the fact that four out of five borrowers end up having to take out another loan to pay back the first. So just a really terrible day for consumer protection and really grateful for the work that you at the National Consumer Law Center and all of the other folks across the progressive community are doing to fight this rollback.

SAUNDERS: Well thank you.

VALLAS: Lauren thanks so much for taking the time. Lauren Saunders is the associate director of the National Consumer Law Center and you can go to stopthedebttrap.org to learn a lot more about this proposed rule and as she said submit a public comment to raise your voice and tell Trump what you think. Lauren, thanks so much.

SAUNDERS: Thank you for having me.

VALLAS: Don’t go away, more Off Kilter after the break, I’m Rebecca Vallas.

[MUSIC]

You’re listening to Off Kilter, I’m Rebecca Vallas. “Pitchers and catchers report to spring training this week, yay, the first sign that baseball’s opening day is drawing near. But amid the hope that springs up with every new baseball season is an unacceptable fact, many of the players at spring training aren’t being paid.” So writes Pat Garofalo, the managing editor of TalkPoverty.org and a friend of this show. Pat thanks so much for coming back.

PAT GAROFALO: Hey, thanks so much for having me.

VALLAS: So what is this new piece you’ve got? Spring training, players aren’t being paid, what’s going on?

GAROFALO: Yeah the players who are on minor league contracts but have to report to spring training every year work for a month with no pay.

VALLAS: And why is that legal? Last I checked, and I feel like we talk about this in shortage of segments on this show but we have wage and hour laws that require people to be paid for their labor. How is it that that doesn’t apply to baseball players or spring training?

GAROFALO: So we do have wage and hour laws however most minor league players are exempt from those. For a long time baseball just got away with this by not paying players first for spring training and then actually they weren’t paid during the off season either, so they work a few months when the season is going and when the off season comes around they’re expected to go work somewhere else and find money elsewhere even though they’re also expected to train and stay in shape and be ready for the new season. So a lawsuit was launched in 2014, an attempt to form a class action lawsuit to say hey, Major League Baseball you can’t do this. Then last year, March 2018 the government shutdown was coming, snuck into that bill, thousand something into a giant omnibus spending bill was the Save America’s Past Time Act, yes that was the name.

VALLAS: Wait that’s actually what it was called?

GAROFALO: The Save America’s Past Time Act.

VALLAS: You can’t make this up, sorry keep going. So they actually called something that basically is the baseball payers don’t have to get paid act, the Save America’s Past Time Act, that’s where this is going.

GAROFALO: Here comes congress to save baseball to say that wage and hour laws do not apply to minor league baseball payers so long as they are paid the equivalent of a 40 hour minimum wage.

VALLAS: I feel like you deserve the shame bell there Pat for what you just laid down, I know we’re not in ‘In Case You Missed It’ but we need some shame bell.

[GONG] [DEEP VOICE: SHAME]

Thank you, thank you. So back to you Pat, so buried in this bill that no one seems to have noticed until maybe now was this carve out for baseball players. So how is this playing out?

GAROFALO: It’s certainly got a little coverage at the time but this is something that Major League Baseball has wanted for years. You can see that right when the class action lawsuit happens their lobbying essentially doubles overnight, they’ve been working to have an exemption like this put formally into law for quite a while and in a lot of ways it just solidified what they were already doing, that’s why the lawsuit came because they weren’t paying these players so they got retroactive permission to keep doing what they were doing from congress.

VALLAS: So you talked to some former players for this piece that you wrote for Talk Poverty and tell me a little bit about what they shared about how this has played out for them.

GAROFALO: So the players I talked to pointed out that they work really long hours, they’re expected to train and practice and be there for the games and travel and all of the things you would expect of a minor league athlete. And when you add all that time together and put it next to their pay, they’re getting paid just a few dollars an hour. here’s a quote I have from a guy named Jeremy Wolf who now runs an organization called More than Baseball, he was in the New York Mets system. His quote was, “I’d work 70 hours a week, and I would get paid $45 per game, so that comes out to like $3 an hour. The hot dog vendor makes more than the players do.” That’s not to rag on the hot dog vendor who has a very important job and should be making a living wage but you’d think that the players on the field would also be making the living wage.

VALLAS: So what is the possible argument that the league could have for why it wants to do this apart from the fact that it wants to save itself money? Is there anything that could conceivably be a leg to stand on for why they’re doing this and why they wanted this carve out?

GAROFALO: So the League makes two pretty bad arguments. The first is that paying these players would cause financial ruin for all these little home teams in hometowns all over the country. That’s not really true, it’d take about $4.5 million per team to pay all of their players minimum wage for the entire year, so that not so much. It actually is the major league franchises themselves who pay their minor league. So if you’re playing for a Yankees farm team somewhere if it’s in Iowa or Arizona or New Mexico, you’re paid by the Yankees. So it’s not that you’re going to run a little team in the middle of nowhere bankrupt by paying these players.

Their second argument is that these players are akin to struggling actors who are just trying to make their dreams come true and they’re part time and they’re just trying to see if this is a viable lifestyle for them, if they’ll be in the tiny percentage that actually makes it to the majors. To me that argument falls apart when you realize that these teams are making money, they’re an entertainment product, it’s not OK to not pay actors, they put on a show and people buy tickets in the same way it’s not OK to not pay a baseball player because they’re doing a job and providing entertainment for people.

VALLAS: And your piece points out just to put more numbers to this, we’re talking about players who in many cases are making $7,500 a year in some cases even less than that. And these are folks who are as you pointed out engaged in incredibly rigorous training schedules, they’re working way more than a 9 to 5 job and that’s what they’re taking home.

GAROFALO: Absolutely and they’re just explicitly not paid in the off season at all. That’s really important when the games end they just stop making money and the team tells them to go serve coffee somwhere while at the same time maintaining their equipment and maintaining their training and doing all the things you need to do to try and be a world class athlete.

VALLAS: Now the Save America’s Past Time Act, I can’t even believe the name of the bill.

GAROFALO: You can’t even say it seriously, you have to do the sing song-y —

VALLAS: You do.

GAROFALO: Thing when you say it because it’s so ridiculous.

VALLAS: You have to sound Orweillian in your delivery, that’s actually mandatory for a bill that is named like this. It actually is in some ways worse than the Patriot Act as I’m saying this repeatedly as part of this conversation. So the Save America’s Past Time Act was not actually even the league’s last attempt to get away without paying its players ever, this is one of those but wait there’s more situations, what else are they up to?

GAROFALO: The lawsuit, the 2014 lawsuit against Major League Baseball also brought claims in Arizona, which is where a lot of spring training takes place, takes place in Arizona and Florida. Arizona’s minimum wage is going up to $12 an hour and the law was passed via ballot initiative, has very few carve outs, so it’s a pretty ironclad $12 an hour law. Major League Baseball has now gone to Arizona and said hey we’d really like to have an exemption from your minimum wage law too, we got our exemption at the federal level so it’d be really great if you could let us off the hook here.

VALLAS: So they’re not content to have this one carve out, they’re actually literally going to spring training states and trying to find yet more ways to exempt their players from having to be paid. Where do things go with this lawsuit that’s still moving its way through the courts, it sounds like the conversation here isn’t’ quite over yet.

GAROFALO: Yeah, that’s just wait and see as far as the legal question goes. If this Arizona bill passes that will be another blow to the legal effort to do something about this problem. Just as the Save America’s Past Time Act knocked the federal lawsuit in the knees.

VALLAS: So what’s the fix here? Is this something where congress needs to turn around and undo the don’t pay baseball players act as we’re going to rebrand it because I just can’t say the past time garbage one more time.

GAROFALO: Absolutely I think so, I think that’s the obvious first step is to take that silly thing off the books and when you read it it’s about three lines in this gigantic bill. And one of them just very explicitly says you don’t have to pay players for spring training. The first thing to do is like in so many areas just clean up the holes in labor law that already exist.

VALLAS: So not super complicated legislating that needs to be done if any staffer listening wants to take this one up, it sounds like it’s just a large strikethrough in the very short passage that Pat basically just read to you. So hopefully we’ve got someone whose attention this is getting. So Pat, in the last couple of minutes that I have with you folks might be wondering yeah but is this really just how all professional sports operate, is this really just Major League Baseball or are all athletes before they make it to getting paid A-Rod money or Tom Brady money making peanuts. And you took a look at that as well.

GAROFALO: And it turns out that no the minor league pay is not great by any standards but in the NBA and the NHL it is higher and in many instances quite a bill higher in many cases than it is for baseball players.

VALLAS: And we aren’t seeing the other types of leagues go chase congress to try to get them out of paying their workers, that’s something we’re only seeing from baseball?

GAROFALO: You know, they might be, I should go check that out next because who knows.

VALLAS: Hopefully we’re not giving anyone any ideas that they’re not coming up with already. Pat Garofalo is the managing editor of TalkPoverty.org and you can find his piece about how baseball players in the minor leagues are not being paid a living wage and in many cases not at all for their work and also on our nerdy syllabus page. Pat, thanks so much for coming back and for reporting this really important piece.

GAROFALO: Thanks, anytime.

VALLAS: And that does it for this week’s episode of Off Kilter, powered by the Center for American Progress Action Fund. I’m your host, Rebecca Vallas, the show is produced each week by Will Urquhart. Find us on Facebook and Twitter @offkiltershow and you can find us on the airwaves on the Progressive Voices Network and the WeAct Radio Network or anytime as a podcast on iTunes. See you next week.