Wealth Tax
Michael Linden mythbusts scaremongering claims about a wealth tax, and explains how it would actually be pro-growth; Elena Botella talks her piece “Debt Collecting Promises Good Pay. All It Costs Is Your Soul”; and TalkPoverty’s Pat Garofalo returns to break down “A Just Society,” AOC’s massive anti-poverty plan. Subscribe to Off-Kilter on iTunes.
New data from the Census Bureau released last week show that income inequality in the U.S. last year reached the highest level on record since the government began tracking it in 1967. These new figures come as the Trump tax law that lavished some $2 trillion in tax cuts on the nation’s ultra-rich and wealthy corporations enters its second year. Against this backdrop, the idea of addressing historic levels of inequality through a “wealth tax” is gaining steam on the 2020 campaign trail, with a growing chorus of candidates for the Democratic nomination releasing ambitious proposals that have many at the top of the economic ladder screaming “socialism” and claiming that such proposals would cripple economic growth. To dig into the idea of a “wealth tax,” how it would work, and whether there’s any truth to the scaremongering claims about what it would do to the economy, Rebecca brings back Michael Linden, executive director of the Groundwork Collaborative.
“71 million U.S. adults have fallen behind on a bill and now have debt in collections. According to data from the Federal Reserve Bank of New York, U.S. household debt is at an all-time high — and behind our system of easy credit are roughly 300,000 debt collectors, working for both lenders and 3rd-party collection agencies, whose job it is to recover money from American families…. Like many of the debtors they collect from, the collectors are often low-income themselves.” So writes Elena Botella in a recent essay for TalkPoverty titled “Debt Collecting Promises Good Pay. All It Costs Is Your Soul.” Elena is a writer currently traveling the U.S. interviewing Americans about their experiences with debt, and she joins this week’s episode to discuss her essay.
And finally, to round out this week’s episode, late last month, Congresswoman Alexandria Ocasio-Cortez released an ambitious anti-poverty package that is intended to do to the conversation on poverty what her Green New Deal has done to the climate conversation. The sweeping package, which she calls “A Just Society,” includes a set of six bills that aim to tackle unaffordable housing costs, a broken safety net, the federal government’s outdated and inadequate poverty measure, and more. Pat Garofalo, managing editor of TalkPoverty, joins Rebecca to take a look at the package.
This week’s guests:
- Michael Linden, executive director, Groundwork Collaborative
- Elena Botella, author, “Debt Collecting Promises Good Pay. All It Costs Is Your Soul.”
- Pat Garofalo, managing editor, TalkPoverty.org
For more on this week’s topics:
- Read David Leonhardt in the New York Times on how a wealth tax is actually pro-growth
- For more from Michael Linden and his team at the Groundwork Collaborative, check out groundworkcollaborative.org
- Read Elena Botella’s essay for TalkPoverty, looking at the carnage debt collection is wreaking in the lives of low-income people on both sides of it
- Dig into AOC’s “Just Society” in this New York Times piece and this fact sheet summarizing the package
This week’s transcript:
♪ I work and get paid like minimum wage
sights to hit the class by the end of the day
hot from downtown into the hood where I stay
the only place I can afford ’cause my block ain’t saved
I spend most of my time working, trying to bring in…. ♪
REBECCA VALLAS (HOST): Welcome to Off-Kilter, powered by the Center for American Progress Action Fund. I’m Rebecca Vallas. This week on Off-Kilter, Debt Collecting Promises Good Pay: All It Costs Is Your Soul. That’s the title of a recent essay for TalkPoverty that shines a light on the traumatic mental warfare that frontline debt collectors, many of them low-income individuals lured in by the promise of decent pay, are trained to deploy in order to collect debts from low-income borrowers. I talk with author Elena Botella, who left a career in the banking industry to write about Americans’ experiences with debt. Later in the show, stick around: a look at AOC’s sweeping poverty plan, which she calls a “Just society.” Pat Garofalo, managing editor at TalkPoverty.org, joins me to break it all down.
But first, new data from the Census Bureau released last week show that income inequality in the U.S. last year reached the highest level on record since the government began tracking it in 1967. These new figures come as the Trump tax law that lavished some $2 trillion in tax cuts on the nation’s ultra-rich and wealthy corporations enters its second year as law. Against this backdrop, the idea of addressing historic levels of inequality through a wealth tax is gaining steam on the 2020 campaign trail, with a growing chorus of candidates for the Democratic nomination releasing ambitious proposals that have many at the top of the economic ladder screaming socialism and claiming that such proposals would cripple economic growth. To dig into the idea of a wealth tax, how it would work, and whether there’s any truth to the scaremongering claims about what it would do to the economy, I’m thrilled to bring back my good friend Michael Linden, the executive director of the Groundwork Collaborative. Michael Linden, thank you so much for taking the time to come back on the show.
MICHAEL LINDEN: Thank you so much for having me. It’s a real pleasure.
VALLAS: So, while we can’t get into specific candidates or their plans, and that’s not where we’re necessarily going to go with this conversation, the notion of a wealth tax is a big issue that has come up front and center in the 2020 debate. So, before we get into kind of any of the claims that are being made and kind of how those stack up, let’s back up and actually explain: how would a wealth tax work?
LINDEN: Yeah, sure. So, that’s great question. So, to understand that, you sort of have to step back and say, what is the difference between income and wealth? Because we have an income tax, right? And we tax people based on the money that they make in a given year. That’s income. Income is the flow of money to a person or a household in a given year. Wealth is the accumulation of any savings or assets or capital that comes from that income. So, if you make a lot of income, you aren’t spending all of it, so you’re socking some of that away in some form or another, and that accumulates wealth. And so, the big difference between obviously, the two things are related, right? If you have a lot of income, it’s a good bet that you’re going to be building wealth. If you don’t have a lot of income, it’s a pretty good bet that you aren’t going to be able to accumulate wealth. Although there are some people who have an enormous amount of wealth and not a lot of income because they don’t need it: because they don’t work, because they just inherited it, because they are sitting around enjoying the fruits of somebody else’s labor, and they don’t really have a lot of income.
Which actually brings me to the wealth tax. The idea of a wealth tax is to get at those very, very large accumulations of money, of assets, of capital that are kind of sitting around not being particularly productive that people at the very, very, very, very top didn’t really earn. They may’ve earned some of it, but they definitely didn’t earn all of it. And it’s an enormous amount of money because it’s untaxed; it’s largely untaxed. We do not tax wealth except in a couple of specific instances. So, for example, property taxes are a form of a wealth tax, right? It’s a tax on an asset that somebody owns, as opposed to income that they make. And so, we do have property taxes in this country, which are basically wealth taxes. And the idea here is to apply that concept to more than just one kind of asset. Like real estate is one kind of wealth, but there’s also stocks and bonds and art and the small island that ich people own or something like that. So, that’s the biggest difference between an income tax and a wealth tax.
And the way it would work is actually, at the top level, relatively simple. Every year the very, very, very wealthy would have to report on their own net assets — how much do they own — and then, they’d have to pay a tax on that after some threshold, depending on the design of the wealth tax. You know, various ones set that threshold in different places, but they all sort of start at like tens of millions of dollars. So, most, the vast majority of Americans would pay nothing under a wealth tax. And then the very, very tippy top would pay a small amount on their wealth.
VALLAS: And in terms of who would be hit, I mean you’re emphasizing people who own a small island or like many, many, many yachts. Paul Krugman wrote in The Times this week actually talking about some of the different proposals for a wealth tax, and I thought this sort of summed it up nicely. He was talking about who would be hit by these types of taxes. He writes, “The only people who would be directly affected by these tax proposals are those who more or less literally have more money than they know what to do with.” I thought that summed it up pretty well.
LINDEN: Yeah, that’s right. I mean you could probably fit, I mean again, it depends on the exact threshold, but you can probably fit the number of people who would pay a wealth tax into a rather large stadium, right? That’s what we’re talking about. We’re not talking about hundreds of thousands or millions or tens of millions of people. We’re talking about tens of thousands. And it’s the wealthiest people in the world, essentially, and they have so much money that they can’t spend it all. They literally don’t, like Krugman said, they don’t know what to do with it. You know, you have Jeff Bezos, who is musing that he has so much money, the only thing he can do with it is try to colonize the moon. You know, that’s great. We should colonize the moon, I guess. That’s not my area of expertise, but that’s certainly not somebody who we should be worried about paying more in taxes.
VALLAS: Now meanwhile, as the idea of a wealth tax has started to gain steam on the campaign trail, started to be an idea that’s seriously being talked about by a range of economists and policymakers, opponents have responded pretty sharply. The central claim that we hear from opponents of the idea of a wealth tax is that it will be bad for economic growth.
LINDEN: Right.
VALLAS: Treasury Secretary Steven Mnuchin is one of those voices. He’s put it as follows, “You’re going to completely disincentivize capital investment, which is going to be very, very, very bad for economic growth,” he says.
LINDEN: [laughs]
VALLAS: A New York Times article actually just this week put it as follows, “The idea of redistributing wealth by targeting billionaires is stirring first debates, fierce I should say, debates at the highest ranks of academia and business, with opponents arguing it would cripple economic growth, sap the motivation of entrepreneurs who aspire to be multimillionaires, and set off a search for loopholes.” So, there’s a lot in there, but if that’s sort of the base of claims that are being made about this new idea as it gains steam, I’d love to sort of walk through them in turn. And the first claim there is that it would sap economic growth.
LINDEN: Right. So, this is a new idea but an old argument. And we’ve been told for decades now that when you tax rich people, it will hurt the economy, and of course, the mirror image of that argument, which is that, if you cut taxes for rich people, it will help the economy. And those things are just fundamentally false, and they come from a fundamental misunderstanding of how the economy works and where prosperity actually comes from. Prosperity does not come from the bank accounts of the top 1 percent. It comes from everyday people going about their everyday lives, going to work, producing, creating more things, innovating, creating demand for new goods and services. That’s actually where prosperity and growth come from. Cutting taxes for people at the top does not trickle down. It never has trickled down. It never will trickle down. And so, fundamentally, that argument that Secretary Mnuchin was making is just a form of that kind of trickle-down argument. If you raise taxes on rich people, then they won’t invest or they won’t innovate or they won’t create. Well, the truth is you know, all those innovators and creators that people talk about — the Steve Jobs, the Bill Gates — they started all those companies when tax rates were higher [laughs], not lower. It didn’t stop them. And the same thing is true here. Nobody is going to not create a new thing or pursue a new idea because they think that at some point in the future when they have tens and tens of millions of dollars that they literally don’t know what to do with, they might pay slightly higher taxes.
And on the flipside of course, the opponents never acknowledge the fact that income inequality and wealth inequality are themselves very negative for the economy. When you get extreme levels of inequality, and you mentioned at the beginning of the show, income inequality is at its highest level since we’ve been measuring it. Wealth inequality is even higher than income inequality. These things are really distortive, and they are drags on growth. They distort the market, to the extent that we need to use markets, they really distort them. They undermine them. They really get in the way of opportunity, and they really undermine stability, economic stability. And some Research even shows that they lead to lower, sorry, slower levels of growth and deeper recessions.
So, on the one hand, it’s just not true that cutting taxes for rich people is any good for the economy. And on the other, inequality itself and massive concentrations of wealth and power at the top are themselves very bad for the economy. It’s like economic pollution, right? It is bad for the health of the economy to have that much power and wealth concentrated in the hands of a few. It just turns into sort of extractive, exploitative economies that we’ve seen in other countries, that we’ve seen what’s happened, what happens in other countries in other times when economies go that direction. So, a wealth tax, not only would not hurt the economy, it’s much more likely to help the economy by taxing away some of that excess power and wealth that is really not doing anybody any good at the top and really could a, be put to better use elsewhere, and kind of reduces some of that really negative economic pollution at the top.
VALLAS: And David Leonhardt over it at the New York Times, he actually, he wrote a piece this week in part responding to that very New York Times article that I was quoting that sort of repeated a lot of those scaremongering claims and didn’t do a ton to kind of put them in needed context as you’re doing right now. And one of the points that he makes is that we also need to be careful not to just sort of follow the premise of those claims, which in part is also that we are in a place of significant economic growth like Trump and his advisers would have us believe and constantly tout. Trump’s phrasing is often that we’re experiencing an economic miracle. And Leonhardt actually walks through some pretty significant and stark data points arguing that maybe we’re not actually in all that healthy an economy.
LINDEN: No. Yeah.
VALLAS: He looks at how in 9 of the last 10 years, the economy has grown more slowly than predicted, that annual GDP growth has not reached 3 percent in almost 15 years, and that median net worth for American households has actually declined after adjusting for inflation since the late ’90s. What do you make of these kinds of data points, and do you think that he’s right that we need to actually be checking our assumptions about how strong the economy is right now?
LINDEN: Well, I think he’s 100 percent right. And look. There’s an important distinction that we have to start making, which is that growth — Look. Economic growth is a good thing. It’s what we kind of want. We want the economy to get bigger. We want there to be more to go around. But it’s actually not prosperity if there’s more to go around, but it doesn’t actually go around, right? So, a bigger economy but with all of the gains going to people at the very top is not really economic prosperity. And so, we have both had slower-than-expected economic growth, and all the gains are going to people at the top. So, by both of those measures, we are not in a particularly strong economy. And honestly, over the last 40 years, that’s essentially the situation we’ve been in. The economy as a whole, as measured by GDP, has gone up by about 120 percent in real terms since the mid-1980s. And real median family income has gone up by about a tenth of that, less than a tenth of that.
And so, who’s actually benefiting from that so-called growth is really important. It makes a difference. What’s the benefit of an economy that’s growing if most people don’t feel it, and most people’s lives aren’t getting any better? And that’s certainly been the case the last few years. President Trump makes these boasts about the economy, but at the same time, wages have not been rising. At the same time, poverty rates have not really been falling. At the same time, racial wealth gap has been expanding. Those are not signs that things are going well.
VALLAS: Now, on the flip side, you asserted that it’s your belief being deeply embedded in the economic literature here, and that’s a lot of what you wonk out on every single day over at the Groundwork Collaborative. But there are —
We’re very popular at parties.
VALLAS: [laughs] Oh, that’s it. That’s a separate segment to have.
LINDEN: [laughs]
VALLAS: How wonks handle their social lives. We should actually, we should do that. All right. Off-Kilter pitches: filed away. But, and I feel like we should have Kate Bahn on because I think she would be great on that, so.
But back to a wealth tax. That you’ve asserted that that may, there’s actually reason to believe that it may be a pro-economic growth policy —
LINDEN: Oh, absolutely.
VALLAS: — not actually the opposite as its opponents claim. But it’s also — and related to that, obviously — is it as a tool for addressing inequality. Talk a little bit about how it would tackle inequality. And also you mentioned the racial wealth gap.
LINDEN: Right. Yeah. So, I mean look. It directly tackles inequality and the racial wealth gap by taking money that was not earned, that is not productive at the very, very top and investing it in everybody else. And you could do that in a variety of different ways. You could use those resources for universal childcare. You could forgive the debt of student loans. You could expand access to paid family and medical leave. There’s all sorts of things you could do with those resources. But fundamentally, on a first-order effect, you’re just taking, you are taking money that is not really doing anything for anybody and was not really earned from the very, very top. And that by itself reduces income inequality, or sorry, wealth inequality, and reduces the racial wealth gap because we know that the very, very tippy top is overwhelmingly white, overwhelmingly white, and disproportionately white. So, that’s an important effect of the wealth tax.
And then the second-level effect is improving the economy for everybody. You know, I mentioned this before, but it’s really important to go back to it: These massive concentrations of wealth and power are corrosive to the economy. They are a block on shared prosperity. They are block on shared growth. They get in the way of the smooth functioning of an economy. And you can think about all sorts of ways that that happens. You know, there’s political mechanisms, right? These people have an enormous amount of political power because of all their wealth, and they gum up the works. They set regulations. They get their friends in Congress and in the presidency to set the rules and regulations to benefit them at the expense of smaller businesses or startups or innovators who are coming forward.
They also, you know, here’s an interesting one that I think often, it doesn’t get enough attention. So, with all the money that has been pooling at the top, it actually distorts consumer demand, and you end up with this weird situation where all of the product innovation is happening and is aimed at the high end of the market. And middle- and low-income folks don’t get any of that benefit of the product innovation because that’s not where the money is. So, businesses aren’t competing for their dollars because there’s fewer and fewer dollars there. Which you can imagine has all sorts of distortive, negative effects on the economy because you can really only get so much growth out of like the 17th different new version of coconut water, right? Like it’s not going to be an engine of growth in the way that product innovation for the broad middle and for the bottom could be.
So, there’s all sorts of other ways that this massive inequality is really bad for the economy, and I’ll just do a shout out. You mentioned Dr. Bahn, and her boss Heather Boushey, Dr. Boushey, just released a book where she just goes through all of the latest research on how inequality really undermines and distorts the economy. I think it’s called Unbound, and people should check it out.
VALLAS: And we’ll plug that on our nerdy syllabus page so folks can find it and clearly have lots of things to talk about at their parties that [laughs] that these things are so popular.
LINDEN: Exactly. It will make you the most popular person at the next party if you just mention Heather Boushey’s new economics book. I promise.
VALLAS: So, Linden, you often remind us all on Twitter — and you are well worth the follow on Twitter because you are a font of all these statistics and studies and whatnot that you’re citing right now — but as you often remind us there, the idea of a wealth tax is actually wildly popular with the American people.
LINDEN: Yeah.
VALLAS: What do we know from polling on various versions of what this wealth tax might look like?
LINDEN: At base level, the broad majority of the American public very much wants to tax the rich, and they don’t really have strong preferences about how. They are open to lots of different ways to tax the rich. The American people fundamentally realize that the tax code is broken, that it is skewed to people at the top, that it is not serving the public interest, it’s not serving the interests of strengthening the economy for everyone, and that the rich are just not paying their fair share. The rich have gotten enormously richer over the last 40 years, and yet their income tax rates have gone down. And so, there’s just fundamental disconnect between what the public wants out of the tax code and what it actually is delivering. And if you ask people what’s the number one problem with the American tax system right now, they won’t tell you — I mean some people will tell you, but the majority of people won’t tell you — “I pay too much in taxes.” That actually won’t be their #1 concern. Their #1 concern is that the rich are not paying enough. And that is a change. That is a new phenomenon over the last 10 or 15 years that that is really on the top of the public’s mind when it comes to the tax code. Of course, they’ll take a tax cut. Nobody likes paying more for anything. But their real concern is that the rich are not paying enough.
So, you know, when somebody comes along with a new idea that seems very reasonable to tax these enormous concentrations of wealth, the public is like, “Yeah! Why are we doing that?” And we see this in poll after poll, big majorities of support for wealth taxes regardless of the precise design of the tax.
VALLAS: And importantly to note, it’s not just Democrats in those polls.
LINDEN: No. No, it’s not.
VALLAS: It’s Republicans too.
LINDEN: It’s Republicans, it’s Independents, it’s unaffiliated, it’s young, it’s old, it’s black, it’s white. It’s everybody. You basically have majorities of almost every demographic who support it. I mean obviously, it’s not a majority support among Republicans, but it’s more than you’d expect. It’s a-not-insignificant percentage. It’s 30s that support it. So, and then big majorities of Democrats, big majorities of Independents. It’s very common sense for most people, you know. Secretary Mnuchin can make his kind of failed trickle down argument all he wants, but fundamentally, most Americans understand that it is not a good thing for anybody to have one person own $100 billion. Just that’s not a good thing. That’s not a productive use of money. There’s no way that somebody’s earned $100 hundred billion. You can earn a million dollars. You can maybe earn a couple of tens of millions of dollars. But at a certain point, you have so much money that the accumulation of more money just becomes a sort of a fait accompli. It’s like the boulder rolling down the hill. You might’ve started pushing the boulder down the hill, but halfway down, you’re not doing anything anymore. It’s just picking up speed as it goes. And that’s really what’s happening with these enormous fortunes for people at the very top.
So, that’s a good time to step in and say, you know what? This is not a good use of anybody’s resources. We need to check the power of people at the very top. We need to invest in middle-class families. We need to invest in research and science and education and infrastructure. We need to provide the foundations for worker productivity, for workers to innovate and come up with new ways to produce things. And we need to make sure that we are directly targeting this really corrosive inequality that has plagued us for the last 30 or 40 years.
VALLAS: So, is it fair to say, in the last few minutes that I have with you, it’s sort of hard not to have this conversation about the self-interested opposition to a wealth tax that’s mounting and then the parallels within the Trump tax law and the conversation we were having around that. So, just to tie some of those things together, I’m just, I’m really struck that it’s such a perfect sort of flip of the exact same playbook and messaging strategy from around the Trump tax law. We’ve got these people who realize — it’s sort of the donor class. It’s the ultra-wealthy. It’s Republicans who answer to them — they all realize that it’s not going to be a very persuasive or compelling argument against the taxation of wealth, if they scream, “No, no, no! We need to preserve today’s historic levels of inequality because we don’t want to, at the top, lose our money.” That’s not going to win the day. And so, instead, they’ve realized that what they need to do is to sort of smartly frame scaremongering claims to push the notion that a wealth tax would actually end up hurting those of us who don’t have our own small islands and multiple yachts, very much in the way that around the debate on the Trump tax law, the argument we heard from Republicans and their donor class was not, we want more money for rich people. It was, this is going to help the economy.
LINDEN: Right, right.
VALLAS: So, is it fair to make that comparison?
LINDEN: It’s very fair. And in fact, it’s really important to do that because this argument that the way to spark growth and to help the economy for everybody is to focus on the top 1 percent and get government out of their way and reduce their taxes, is not a new argument. It’s been around for some time. It is doing exactly the work that you’re suggesting: it’s trying to take something that is fundamentally about people at the top and trying to get everybody else on board with it. And it’s wrong. It’s just empirically wrong, right? It’s morally wrong. It’s also empirically wrong. It’s economically wrong. It’s economically backwards. But it’s very important: we have to keep pointing this out.
The Tax Cuts and Jobs Act — the Trump tax law, TCJA — is a great example of another failure of this ideology. We were promised that if we cut taxes for corporations by a trillion dollars that they would raise wages for everybody else because it would trickle down. And in fact, that has — not surprisingly — not happened at all. They would create an enormous amount of new jobs. They would bring jobs back to the United States. None of that has happened. What has happened is that corporate profits are through the roof, but we knew that was going to happen. And nobody else is better off. The economy’s not growing any faster. Median income is not growing much faster if at all . You’re not bringing more people into the economy who’ve been marginalized. You’re not getting any of that good, good stuff that we were promised was going to happen.
And so, it is important to just remind everybody and to be confident in our belief that the rich are not the economy. We are the economy. Everyday people are the economy. And if we want to boost the economy, it’s everyday people we should be focused on. And so, if you just look at the data, you look at your own human experience, we’ve cut taxes for rich people multiple, multiple times over the last 20 or 30 years. And are we, as an economy, as a society, better off for it? We are definitely not. Are rich people better off for it? Yeah, definitely. They have a lot of money. [chuckles] They got a lot of money.
VALLAS: It’s probably the right note to end on. I’ve been speaking with Michael Linden. He’s the executive director of the Groundwork Collaborative. You can follow him on Twitter @MichaelSLinden, L-i-n-d-e-n. And you can find more of the work that his organization is doing at GroundworkCollaborative.org. Linden, thanks so much for taking the time. And now I know what you’ll be sharing at parties this weekend.
LINDEN: That’s right! Thank you for having me. This was really fun.
VALLAS: We’ll talk to you plenty soon.
Don’t go away more. Off-Kilter after the break. I’m Rebecca Vallas.
[hip hop music break]
You’re listening to Off-Kilter. I’m Rebecca Vallas. “71 million U.S. adults have fallen behind on a bill and now have debt in collections. According to data from the Federal Reserve Bank of New York, U.S. household debt is now at an all-time high. And behind our system of easy credit are roughly 300,000 debt collectors working for both lenders and 3rd-party collection agencies whose job it is to recover money from American families. Like many of the debtors they collect from, the collectors are often low income themselves.” So writes Elena Botella in a recent essay for TalkPoverty titled Debt Collecting Promises Good Pay: All It Costs Is Your Soul. Elena is a writer who’s currently traveling the U.S. interviewing Americans about their experiences with debt. I talked with her by phone.
Elena thanks so much for taking the time to join the show.
ELENA BOTELLA: Absolutely, I’m glad to be here.
VALLAS: So, up top in my opening, I noted that household debt is at an all-time high in the U.S. This is a stark enough fact to let it sink in, particularly given that President Trump continues to tout the supposedly strong economy, since it underscores that the economic growth that we’re seeing once again isn’t trickling down as promised. But the focus of your reporting in this piece is to sort of pull the curtain back and shine a light on the debt collectors who spend their days trying to collect the debts owed by struggling families. Perhaps the first surprising takeaway for readers from this piece is that a great many of the debt collectors making those calls are themselves low income and that they’ve actually been drawn into this type of work because it’s one of the few opportunities out there to earn a decent wage without a college degree. Tell us a little bit about some of what you found in reporting on this piece.
BOTELLA: Yep, absolutely. So, I think a lot of listeners will know that job opportunities for folks without a college degree in the United States can be sometimes pretty grim. Wages in industries like retail sales are around $12.75/hour, fast food, even worse: $11 an hour. So, for people who fall into that segment of the job market with oftentimes, fairly limited opportunities, entering the field of debt collection can be one of the best opportunities they have to get out of poverty themselves, create a more stable environment for their families. In the United States, median hourly pay for debt collectors hovers around $17/hour. So, you know, that’s a good step up from the $13 or $11/hour that workers are getting who are in that kind of overall segment of the labor market of people without a college degree.
And for this piece, I talked to two people in particular who entered the field of debt collection looking for either a step up in pay or in some cases a job. So, I talked to Trevor, who was a high school student at the time working at Target part-time looking for something that would offer a little bit of higher pay, and to Chaz who was, at that time, coming out of the great recession really looking for a job at all. And so, I think it’s helpful thinking about this industry of debt collection, which obviously has a bad rap for arguably a lot of good reasons, to think about who the people actually are who are making this system happen, the challenges and constraints that they’re under. Because I think every time we look at systems of economic disparity, different forms of exploitation or disparities in our marketplace, you oftentimes kind of need this big cohort of people to make that happen who maybe aren’t doing that much better than the, in this case, debtors themselves.
VALLAS: So, you mentioned Trevor, one of the people that you spoke with for this piece. You used a pseudonym to protect his privacy, and Trevor worked for a company called First Premier. So, before we get into kind of the details that he shared with you about what the work was like and ultimately — spoiler — why he left that job, talk a little bit about First Premier. They’re a major player in the subprime market.
BOTELLA: Yep, I think, for people who are listening who might have come from middle class or more affluent backgrounds, I think in those spheres of the United States First Premier isn’t a household name, even though they’re actually a really major player in the subprime credit ecosystem. So, at one point, they represented a very high percentage of all of the subprime credit card solicitations in the United States, so basically, when you get a mail piece from a credit card company, they were really, at one point, represented the lion’s share of all subprime credit card solicitations. And they’re still amongst the biggest issuers of MasterCard credit cards in the United States. But because they really have a more narrowly-targeted business model that really exclusively goes after lower-income consumers with worse credit scores offering products with typically a 36 percent APR and literally hundreds of dollars of fees per year on credit cards with a credit line that’s usually somewhere in the ballpark of $200 to 500. Not surprisingly, that option is only appealing to people who have very, very few other alternatives in the marketplace.
So, I think it’s helpful for people who are from middle-class or affluent backgrounds to have more visibility into the fact that our credit marketplace is incredibly segmented. So, while there’s some banks, lenders that work across the spectrum from low-income consumers to high-income consumers, in many places, the lenders like First Premier, One Main that are really commonly-used in high-poverty neighborhoods are ones that wealthier consumers have literally never even heard of. Which means that they don’t have visibility into what type of consumer practices are used, and in some cases, the harms that these types of products cause.
VALLAS: So, Trevor talked to you about kind of what it was like behind the scenes, what the process was for trying to kind of get blood from a stone seeking to collect debts from low-income families by and large who had been preyed upon by First Premier in the ways you’re describing. And talk a little bit about some of what it was like for him to be one of those people on the front lines trying to collect those debts.
BOTELLA: Yeah. And I’ll actually go ahead and take the opportunity to introduce Chaz as well because I think Chaz and Trevor had very actually different experiences in terms of what type of training they got about how to collect on debt. And I think that’s actually really illustrative. So, I’ll talk quickly about Chaz and then kind of compare how they were taught to collect on debt.
VALLAS: And Chaz was one of the other people you spoke for the story. He worked at a company called Checkmate.
BOTELLA: Yep. So, Checkmate is a lender based out of, his work was based out of Arizona that, as opposed to First Premier, that offers primarily credit cards, Checkmate offers products that, in some cases, are payday loans, and in some cases, kind of resemble payday loans, so things with APRs exceeding 100 percent that are marketed more as a short-term installment credit. So, Chaz for reference, when he talked about what type of training he received to become a debt collector for Checkmate, he talked about the fact that he was really encouraged to imagine the money he was asking the borrower to pay back, imagine that money was his own money, right? So, he was told to think of it as, you know, “Imagine this other person has literally your money that they’re not giving back to you,” right? So, that obviously set then him and his colleagues up to right away be in a very antagonistic posture toward the borrower. So, taking that attitude basically forecloses on the possibility that really, that you’re going to really be able to treat that borrower with dignity, with respect if you are encouraged to take the attitude that they’ve basically taken your own money, right?
So, by comparison, First Premier, which is of course a larger company, the type of training that Trevor described I would say was, in some ways, didn’t have that same approach of take a very antagonistic posture towards the borrower. But in terms of the actual business practices, it was really focused on extracting a promise to pay from the borrower. So, in some cases, that could mean that the borrower’s going to be able to make a payment right away. And sometimes it means encouraging the customer to basically make a promise to make a payment on a future date. So that could be obviously, a payment by ACH, so the way you would pay kind of using a digital check. In other cases, actually encouraging people to pay by using another credit card. So, that comes with cost. Or using things like Western Union that are also again, costly methods of making a payment. Of course, not every consumer has a checking account, so that may be some consumers’ only option.
But the one thing that’s true for both of these entities and is really an industry norm, not just in kind of the deepest reaches of subprime credit but kind of more broadly across the consumer lending industry is very high frequency of calls, so contacting consumers many, many times a day, which is something that a lot of consumer advocates have said is a practice that should be curtailed.
VALLAS: Now, one of the things that you describe in your piece — and this was true sort of both models, but you describe it in detail with respect to Chaz’s experience working for Checkmate — is that not only was he drawn in by the promise of decent wages as his base pay, but that there actually was an incentive structure baked into his pay through commissions where, if he was successful at helping someone roll over the loan, so actually getting them into more debt with the company, that that was actually a way that he could end up getting himself a higher commission. It wasn’t just on the basis of whether he could get someone to pay the full balance. Talk a little bit about those incentive structures and some of how that plays in.
BOTELLA: Yep. So, the issue of rollovers is a really, I think, important topic right now in the subprime consumer lending space, in part because the Consumer Financial Protection Bureau has been kind of evaluating these rules that would effectively stop the practice of rolling over loans. So, let’s talk about what that is and how that played into Chaz’s experience.
So, oftentimes with payday loans and other similar products, the duration of the loan is very short, so two weeks or one month. And so, people are asked to repay the whole amount plus interest in a pretty short time period, which for low-income consumers who are in a difficult financial situation is often difficult or impossible. So, if I borrow $500, repaying $600 in a few weeks could be very challenging. So, what Checkmate and other similar lenders do is they oftentimes will encourage customers to basically pay off only the interest on their loan and then take out a new one. And of course, then that new loan comes with own interest. So, in the case of Checkmate, when customers were unable to make a payment or pay off their loan in full, what Checkmate debt collectors were encouraged to do was basically offer the customer to roll over the loan, so pay off only the interest and take out a new loan. So, for example, if paying $600 is not possible, maybe I pay $100, take out a new loan, which then comes with another chunk of interest. And obviously, that practice for consumers can be really debilitating, right? Because they end up in debt for really extended periods of time, constantly making very, very large interest payments where the principal of their debt then never goes down.
And in the case of Checkmate, that really came down, was really rooted in the incentive structure that collection agents were given. So, if you are a collection agent, you would get commission check based off of how much debt you collected. That’s a very common industry practice. But in the case of Checkmate, you would get a commission check if the customer actually paid off the debt and then was out of debt. Arguably, that could be a good thing for the consumer. But you would also get the commission check if you got the customer to roll over their loan. So, if a customer basically paid off their loan by taking out a brand new loan for the same amount, then you also, that was also counted towards your commission. So, it’s not surprising then that you would end up with a system in which the borrowers end up in perpetual, crushing debt at a very high interest rate.
And one thing that Chaz talked about was that when he would talk to borrowers on the phone who had maybe been in debt for an extended period of time with Checkmate, perhaps in the past having bounced back and forth between being passed due, extending their loan with a rollover, that he would talk to borrowers who would ask, “Well, how much do I still owe on this loan?” And so, then he would tell them, “Well, you basically still owe the full amount that you originally borrowed,” they would be understandably shocked, and in some cases, quite upset. Without speaking to whether or not other people they had talked to on the phone were literally deceptive or not, I think it is clearly sort of shocking to the conscience that people would have to be making such large interest payments over time and to actually not make any progress in paying down their debt. Clearly, that’s quite discouraging. So, I think it’s great that regulators are looking more closely at the issue of loan rollovers because I think their particular practice in that segment of the marketplace that can be very harmful to consumers.
VALLAS: Staying with Chaz for just a second, you describe — and the words that you use in the essay are that, “the industry can leave behind scars for both the borrowers and the collectors” — it may be obvious some of the damage that can be inflicted on low-income people who get trapped in these inescapable cycles of debt in the ways that you’re describing, but Chaz shared with you a particularly horrific story that he describes as a clear moment when he decided he couldn’t stand to work for Checkmate anymore. And before I ask you to share that story, I’ll offer a trigger warning for our listeners that it involves threats of suicide.
BOTELLA: Yep. So, the story that Chaz told me is obviously very poignant and heartbreaking in many ways. So, before I dive into that, I’ll just talk a little bit about one of the specific practices that helps explain why this consumer ended up in such a difficult moment. So, when Checkmate borrowers take out their loan, they, as a part of taking out the loan, they give Checkmate permission to make auto-withdrawals of a checking account. And that also actually is a pretty common practice in payday lending. So, if a customer defaulted on their loans, so if they didn’t make payments on the day that they were supposed to make them, what Checkmate’s practice was at the time was that they would basically just withdraw the full amount from a consumer’s checking account. And if that didn’t go through because the customer had insufficient funds or any other issue with their checking account, then Checkmate would break that full amount into smaller amounts and would make up to three attempts a day at taking the money out of people’s checking accounts. So, if you can imagine: you don’t make much money. You have this payday loan that’s really burdensome. And then so basically, as soon as you get paid or as soon as any money comes into your checking account, it’s immediately gone.
So, Chaz told me that the practice at Checkmate was basically to take the money out pretty early in the morning. Basically, timed to right after the most common times were that people would be getting their direct deposit if they were getting a regular paycheck from an employer. So, with that all in mind, Chaz had one collections call that I think when you hear it, it won’t surprise you that this has stuck with him to this day, and this story certainly stuck with me as well. So, he talked to one borrower who had a few kids who, when he made the collections call, she told him that she had nothing to feed her kids, her refrigerator was empty, her checking account had been cleared out by one of those kind of auto-withdrawals in the morning. So, she had nowhere to turn. Clearly, she’s tried taking out short-term loans before, and in her case, she’s still left with nothing. And she said she had no idea what to do about the fact that her refrigerator was empty and her kids needed her. And she said the only thing she could think of doing with killing herself. And Chaz, who is obviously in this context as an entry-level employee without much power, he talks to the billing department to see if they can reverse the withdrawal. They say no. He offers her what consolation he can, encourages her to think of how much her kids need her. Tells her that suicide’s not the answer. And of course, I would encourage anybody who is in a position where they’re experiencing suicidal thoughts to call a suicide hotline and seek help.
But I think clearly in that context, the experience the borrower goes through is terribly traumatic. At the same time, there’s a different type of trauma and pain that’s caused by talking to people who are in such difficult positions every day, all day as your whole job. So, in some ways, I think there’s some similarities to the types of burnout that people experience in caring professions like social work or nursing, but obviously, in many ways it’s quite different, right? Because if that’s your line of work, you’re not in the position where you feel like, well, I clearly was doing my best to help this person in a difficult position. You know, you’re in this much more conflicted posture towards the person who is experiencing all this pain and suffering. So, I think zooming out at how the whole industry works, clearly at the top of this industry, so the shareholders, upper management in these companies, there’s people who make a great deal of money off of this subprime lending who are in a posture where they’re very removed from all of the pain and hardship that the borrowers experience. And I think arguably in some ways, if the shareholders of these companies or the top management of these companies were spending 30 minutes or an hour a day kind of confronting all of the pain that the collection agents see first-hand, that you might come to an industry with very different practices.
VALLAS: And your piece closes with, I think, some powerful words that really sum that up. Well you write that that these two people’s, “experiences show the toll subprime credit and debt collection industries take not only on their customers but on the front line agents as well. These debt collection jobs offer Americans a step up in financial security in exchange for taking on the difficult role as intermediary between high-priced lenders and consumers in dire straits.” Elena, thank you so much for writing this piece in and for your reporting on this subject and for taking the time to join the show. I already am looking forward to having you back because part of what you are doing right now is actually traveling the U.S., interviewing people about their experiences with debt. So, I look forward to talking more with you in the coming months about what you’re hearing as you have those difficult conversations.
Elena Botella is a writer based in Washington D.C. Her work focuses on economic opportunity and how the financial sector impacts ordinary Americans. And her piece for TalkPoverty that we’ve been discussing is Debt Collecting Promises Good Pay: All It Costs Is Your Soul. You can find it, of course, on our nerdy syllabus page. Alena, thanks again for taking the time.
BOTELLA: Thank you so much. It’s my pleasure.
VALLAS: Don’t go away. More Off-Kilter after the break. I’m Rebecca Vallas.
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You’re listening to Off-Kilter. I’m Rebecca Vallas. Late last month, Congresswoman Alexandria Ocasio-Cortez, better known as AOC, released an ambitious anti-poverty package that is intended to do to the conversation on poverty what her Green New Deal has done to the climate conversation. The sweeping package, which she calls a Just Society, includes a set of six bills that aim to tackle unaffordable housing costs, a broken safety net, the federal government’s outdated and inadequate poverty measure, and much, much more. Joining me to take a look at the package is Pat Garofalo, managing editor of TalkPoverty and a regular contributor to Off-Kilter. Pat, thanks so much for taking the time to come back on the show.
PAT GAROFALO: Hey, thanks so much for having me back.
VALLAS: So, as the Green New Deal took inspiration from FDR’s New Deal, a Just Society appears to echo LBJ’s Great Society. And so, that much is maybe clear from the nomenclature. A little bit of background on how AOC has talked about the goal of the package, before we get into what is in it, she has said, “With the Green New Deal we weren’t just talking about climate change. We’re talking about the systems that got us to climate change. We’re addressing root causes. And similarly with our Just Society package,” she says, “we’re not simply addressing poverty or wages. We’re addressing some of the basic structural reasons that are resulting in those outcomes.” So, that’s a little bit of how she has framed this up, but a lot of the news coverage that has focused on this package of bills hasn’t really gotten into the details of what these bills would do. It just sort of has been like, “Oh, AOC doing a thing on poverty.” So, I really appreciate you coming in and taking the time to help break down what’s in each of these bills.
GAROFALO: Totally. And I mean right off the bat, the thing that I was struck by with these bills is how many of them are just simply data-focused. A lot of them are just aimed at finding out what the problem is, which is really smart because if you literally don’t know what the problem is, you can’t solve it.
VALLAS: Yeah, it’s a really great point. And it’s also, it’s not the sexy side of policymaking, so it often doesn’t get talked about. But it can be at the core of identifying and confirming the right solutions. So, let’s get into what these bills would do there. There are six of them. Each of them has its own distinct name and set of policies, and they sort of get grouped into different categories of problems that they’re trying to address. But I’d love to start with the Recognizing Real Poverty Act, which has to do with our poverty measure.
GAROFALO: Yeah, our poverty measure’s bad.
BOTH: [laugh]
VALLAS: It is! It really sucks!
GAROFALO: Yeah, it’s terrible.
VALLAS: We’ve talked about that on this show more times than I can count.
GAROFALO: And so, this is the opposite of what the Trump administration is trying to do, which is to try and disappear poor people by changing the poverty measure in a bad way. This would actually try and make it much more accurate and try and capture much more of what real-world poverty today looks like by taking today’s costs into account. Which is something the current poverty measure doesn’t really do.
VALLAS: So, actually another kind of data-related proposal because how we measure poverty has a lot to do not just with how we paint a picture of hardship in this country. Right now the current poverty measure, which was developed in the ’60s, it’s based on kind of a back of the envelope calculation that has to do mostly with food costs, it hasn’t been updated in a meaningful way in in decades. It has, according to many experts who have sort of a consensus view that’s very similar to what you just said, which is basically it sucks. It just doesn’t capture hardship in this country at all.
GAROFALO: I mean and all it does, it doesn’t capture the big, big increase in housing costs that happened in recent decades. It doesn’t capture necessities of modern life like internet. So, yeah. It just really misses the mark.
VALLAS: So, nuts and bolts: the bill requires the Secretary of Health and Human Services to work with the Census Bureau and with the Bureau of Labor Statistics to basically develop a new way to measure poverty in this country that takes into account all those things you just said as well as geographic differences, which also are not captured in the current poverty measure. So, a lot more detail to come about what that would actually look like. But kudos to AOC for getting that we actually need to measure poverty correctly.
GAROFALO: Absolutely. We literally don’t know what it is that is causing people to be in poverty, what the things are that they can’t afford, then you’re never going to do the policy to fix it right.
VALLAS: And it has a lot to do with who’s eligible for various types of public benefits as well. So, a lot of different things flow from how we measure poverty. The second bill in her mix is called the Place to Prosper Act, and this is the one that gets into housing.
GAROFALO: Yeah, and this is, to my mind, the biggest one in the package. This is the one that’s most sweeping, does the most. And the big headline out of this is that it’s essentially a national rent control bill and would limit rent increases nationally to about 3 percent per year. And that’s the most sweeping aspect of these six bills.
VALLAS: And other stuff in the Place to Prosper Act that I know I really appreciated, particularly as a former legal aid lawyer, it would create an access to counsel fund for renters who are facing eviction. We know that currently, there’s no right to counsel in civil cases even when someone’s home is at stake. You’re guaranteed a lawyer in criminal cases but not in those kinds of civil matters, even when it’s basic, vital human matters that are on the line. And we know that access to representation is a huge gamechanger for people who are facing eviction. I’m spouting stats here from my legal aid days, but I feel like they’re helpful to know for underscoring why creating this kind of a fund is such a gamechanger. But currently, the vast majority of landlords are represented in housing court, but the vast majority of tenants are not. So, the deck is basically stacked. And when you make sure a tenant has a lawyer, their chances of preventing eviction go way, way up. So, kudos for including this kind of a proposal in this bill as well.
GAROFALO: There are two other bits of this bill that I really appreciate. One, speaking of data, simply collecting more data and collecting more disclosures from big corporate landlords, the sort of the how many people are they evicting, what are their rent increases annually, just literally getting that data in one place and making it searchable for people would be hugely important. And then — this is going to get pretty wonky, but as someone who cut his teeth as an econ reporter during the financial crisis — she would prevent the federal government from either buying or selling securities backed by essentially scofflaw landlords. Hugely important. Would get a lot of bad junk debt off the government’s books and would remove support for those landlords. So, it’s like a really in the guts of the financial system thing but could be really, really important.
VALLAS: That’s a really cool piece too. I’d actually, I’d miss that in reading.
GAROFALO: Yeah, it’s super, and it’s buried in there, but it’s super neat. And in terms of getting at the sort of systems that create poverty, [chuckles] preventing bad mortgages from getting into the guts of the financial system, super important.
VALLAS: Yeah, that’s huge. She also has some other pieces on eviction that I feel like haven’t gotten a lot of attention either but are really a big deal to see talked about at the federal level because they primarily have only been championed at the city and local level to date. One of those is something that’s often called “just cause eviction.” The idea is restricting the universe of reasons that landlords can use to evict tenants. So, some of the kinds of permissible reasons would be like if you haven’t paid rent for two or more consecutive months, if you’ve done really big damage to a property, that kind of stuff. But really a big deal to narrow that zone of reasons that landlords can evict tenants: another way to get at some of the root causes of the eviction crisis. And again, something we’ve seen really start to gain steam at the local level with real success as a tool for preventing evictions. Really excited to see that at the federal level here too.
GAROFALO: Yeah, absolutely.
VALLAS: One other plug I want to make for another piece that didn’t get almost any attention and media coverage in this housing portion of her bills is something called “source of income discrimination.” And so, the bill would prohibit discrimination on the basis of the source of a tenant’s income. So, something that happens all the time in the low-income housing market is people being discriminated against because their source of income is housing assistance or public benefits in some way. So, no longer would that be permissible as kind of bad behavior by landlords and slumlords.
GAROFALO: I had a question for you on that.
VALLAS: Oh. Oh!
GAROFALO: How enforceable do you think something like that is? Because that sounds like a great idea to me, but I wonder about checking up on it. Because that’s one of those things like so much in the housing space where you hear horror stories. But then if you ever go to a landlord and say, “Hey, are you discriminating against Section 8.?” “No, of course not. I would never dare to do that.” So, I’ve wondered about the enforcement on that.
VALLAS: Well, and I think AOC is on it because a companion provision in the bill was actually to provide funding for tenants to have legal representation in the cases where they allege source of income discrimination. So, she’s clearly thinking about that too.
So, the next bill that is in this package is called The Mercy in Reentry Act, and that one’s sort of a simple but really important bill. What does that one do?
GAROFALO: This would, and I think it actually pairs well with the next one, which is the same idea basically but for immigrants to essentially prevent the denial of public benefits to folks who are formerly incarcerated. And the next bill after it would prevent the denial of public benefits to immigrants. So, these are both just sort of setting the stage for basic access to the social safety net.
VALLAS: Yeah, no, and a huge deal. And you’re right. These kind of go hand-in-hand. So, we’ve got the Mercy in Reentry Act and then the immigrant companion bill is the Embrace Act is what she calls it. I was so thrilled to see the Mercy in Reentry Act in the mix here because the felony drug ban, as it’s often called, this policy that prohibits the receipt of food assistance and of TANF benefits by people who have a felony drug conviction — and it’s a lifetime ban. That follows you for the rest of your life — has had really broad-sweeping negative effects keeping people from being able to get back on their feet while they’re trying to reintegrate into their communities, and at the time where they most need public assistance because they’re least in a position to be able to find a job because all of the discrimination that goes on against people with criminal histories. So, a really big deal to see this one in there. And I am totally with you. It is huge to be calling for basically universal eligibility irrespective of immigration status when it comes to public assistance for survival benefits. It could not be a more stark contrast to Trump’s public charge rule, which would seek to put current law on steroids in terms of punishing immigrant families who are just trying to get by.
GAROFALO: Yeah, and on the first one of those, the one for former-incarcerated folks, it’s just wild to me that this system that at least we pay lip service and say it’s supposed to be about rehabilitation. And yet when you are supposedly rehabilitated, you are still prevented from accessing the sort of things that everyone else can access. So, kudos to her for just cutting that off on the knees. These two bills are literally just two pages each and just say hey, stop denying benefits to these folks.
VALLAS: Yeah, now. Really, really exciting to see those in the mix here.
And also people — we’ll get into the politics at the end here — but there actually has been bipartisan support for eliminating that felony drug ban in SNAP and in TANF. So, I think there are actually elements that are starting to emerge from this package that are serious ideas, even in our current politics, which is worth noting.
The next bill in the package is the Uplift Our Workers Act. And so, this one, there’s a lot in here, and it also sort of gets back into kind of your world of economic wonkery.
GAROFALO: I guess a little bit. It would set more standards for federal contractors than there are currently today, is sort of the basic-sweeping, overarching point of the bill. Right now, federal contractors have some requirements for how much they have to pay people and how they have to interact with labor unions, but this would essentially up those standards significantly.
VALLAS: And it would create something that she calls a “worker friendly score,” right? So, basically taking into account things like whether paid family leave is provided, whether people have scheduling predictability, what wages they’re paid, union membership, all that kind of stuff. And then as I understand it, OMB (the Office of Management and Budget) and the Department of Labor would then actually be in a position to give preference on a systematic basis to contractors that are scoring high on these worker-friendly scores when they’re making contract decisions.
GAROFALO: Yeah, and this is important for a couple of reasons. The first is that simply, there’s tons of money in federal contracting, and so anything you can do to ensure that those employers are better is good. But that also pulls up everybody else in the area. So, say a federal contractor is working in a particular area and has to pay a certain amount of money, that’s going to also force other local employers to increase their pay to try and compete. So, this is actually going to have knock-on effects beyond what is just in the bill and beyond what just the single federal contractor does.
VALLAS: So, those are the high notes, and there was a lot in there that we just walked through. Was there anything we didn’t get to that jumped out to you that you wanted to bring up?
GAROFALO: No, no. Those are the highlights of that one.
VALLAS: So then, I think the elephant in the room here that people are probably wondering as they hear all of this is, great. OK. So, a lot of this sounds really, really pie in the sky when it comes to our current politics. Obviously, these bills aren’t going anywhere with the Republican-controlled Senate and a Republican-controlled White House. But as I understand it, her goal here is to lay down markers for when Democrats regain control of the White House, when Democrats regain control of the Senate, to say we’re not having the right conversation policy-wise. We need to shift the Overton window and actually start to push the envelope, especially on that immigrant piece of all of this, but really, in a lot of the other components of the bills as well.
GAROFALO: Totally. I mean there are elections coming. There are always elections coming. But they are very much elections coming at this point. So, that’s a big part of it, right, is to try and inject this sort of talk into the election cycle, and she’s been really successful. And I think it’s interesting that she does these big, sweeping packages to try and inject her topics into the political conversation because that’s not the way folks have usually done it. They’ve tried to pick like one particular thing: let’s make sure homelessness is the thing we talk about. Not super successfully, I think. None of your listeners will be surprised that poverty doesn’t exactly rate high on the list of topics the candidates talk about. So, I think there’s something really politically savvy about throwing these huge packages out there to try and change the conversation in that way, much like she did with the Green New Deal.
VALLAS: Yeah, and in a way that recognizes that we’re not going to be able to address poverty in a silo by just tackling one single issue, that it’s a lot bigger than that. And a real emphasis here on root causes. So, lots more to come as we watch whether these bills start to get talked about in serious ways, whether she brings other people along with her, what it does to the 2020 debate. But I’m giving AOC [claps hands] a big round of applause for this package of bills, which I am just really, really thrilled is out there.
GAROFALO: Totally. Me too. And if she ends up getting a third of this passed through a Congress sometime, it would still be a huge victory.
VALLAS: Yep, absolutely. Pat, we’ll have you back soon, as we often do, to talk about what’s going on in the news. But Pat Garofalo is the managing editor of TalkPoverty.org. And always love having you on the show.
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 by Will Urquhart and David Ballard. Find us on Facebook and Twitter @offkiltershow, and you can find us on the airwaves on the Progressive Voices Network and the We Act Radio Network or anytime as a podcast on iTunes. See you next week.
♪ I want freedom (freedom)
Freedom (freedom)
Now, I don’t know where it’s at
But it’s calling me back
I feel my spirit is revealing,
And now we just trynta get freedom (freedom)
What we talkin’ bout…. ♪
