Wednesday, November 24, 2010

Dying with debt: A dirty little retirement secret

Dying with debt: A dirty little retirement secret

Credit card debt is becoming a problem for some seniors.

Retired Americans are racking up credit-card debt like never before, be it for vacations or medical expenses, and a surprising number have no intention of paying it off before they die.
Nearly 40% of retired Americans said they've accumulated credit-card debt in their twilight years — and aren't worried about paying it off in their lifetime, according to a survey released by CESI Debt Solutions.

"At the end of the day, some people of a certain age say, 'It's too late in the game for me to do anything about it. I can't win. So I'm just going to stop playing the game,'" said Neil Ellington, executive vice president at CESI.

This may come as a surprise to younger generations who thought their parents, the so-called Greatest Generation, were more responsible than youngsters raised in an era of easy money, a culture of credit.

But remember that this is the generation that frowns upon talking about money — and certainly would be embarrassed by any potential money problems. Add in a recession that slashed many retirement accounts in half and that leaves a generation sinking deeper into debt, with a diminishing timeframe to do anything about it — and too much pride to talk about it.

"Most people are too scared to talk about their financial problems, especially in their 'Golden Years,'" Ellington said. "Retirement is supposed to be all about enjoying the time you've been saving up for, and the reality is that many people couldn't save enough," he said.

And yet, that didn't stop them from retiring.

More than half of those surveyed had saved less than $50,000 — and many of that group said they'd saved absolutely nothing — yet they retired anyway. Just 4% said they had delayed their retirement due to debt.

"They get to a certain age and they feel privileged," Ellington said. "They say, 'I'm going to go on that trip even though I have to put it on my credit card.'"

When you're young, you have time to pay off splurges like a trip to Hawaii, but for retirees, procrastination can lead to serious financial problems.

It's not just vacations and entertainment; one of the biggest sources of senior debt is medical expenses. More than 75% of the seniors surveyed said they went into debt for medical or funeral expenses.

Part of the reason they're not paying off their debts is they don't know where to start and they're too embarrassed to ask for help. But the financial crisis may have also played a role.

"Financial institutions haven't been perceived as the most friendly" and many people blame them for the recession, Ellington said. "They think, 'Hey, I'm not going to pay back these guys who ripped off America.'"

One of the biggest mistakes seniors make when it comes to credit cards is being late with a payment.

"That triggers a penalty APR that can exceed 30%, which can trap those seniors who can't pay their balances in full each month in a downward spiral of debt," said Ben Woolsey, the director of marketing and consumer research at

Another mistake they make is relying on debt-settlement companies when they get into trouble.

"It's much better to contact card companies directly to work out repayment plans or work with a non-profit debt-counseling service rather than a fee-based settlement company," Woolsey said.

And while many retirees who are being quietly buried under a mound of debt may think they're protecting their kids by not burdening them with their financial problems, if they don't pay off their debts before they die, it will eventually become their children's burden.

Whatever that parent owes will be deducted from his or her estate before that estate is divided among the children and other beneficiaries.

Imagine a scenario where the kids are bickering over who gets mom's house and, in the end, no one gets it because it had to be sold to pay off mom's credit-card debt.

"That is a very realistic scenario," Ellington said. "A lot of kids don't find out how much their parents are struggling until they pass away."

Unfortunately, this debt denial isn't exclusive to seniors: Among those surveyed who had not yet retired, 25% said they were carrying debt of $5,000 or more — yet more than half said they didn't plan to delay retiring because of debt.

And more than one in four said they weren't worried about paying off their debt in their lifetime.

"People think it will all just work out somehow," said Samir Kothari, co-founder of, a site that helps people lower their bills. "These things are not based on logic but on people being very optimistic about life — defying reality. I think that's what gets people into trouble."

Taking Charge of Your Debt

For those who carry a balance on their credit cards, BillShrink recommends PenFed's Promise Visa, which costs $20 as a one-time fee to join and charges annual percentage rates of 7% to 9%, or CapitalOne's Platinum Prestige card, a no-fee card with an annual-percentage rate of around 12%.

You might assume that most people have paid off their mortgage by the time they retire, but nearly a third of those surveyed said they were still carrying mortgage debt into retirement. BillShrink recommends the Wells Fargo Home Rebate card where your rewards dollars automatically go toward paying off your principal balance on your mortgage.

If you want to make sure your loved ones don't get into debt trouble, BillShrink suggests the Edward Jones Personal Card or Fidelity's Retirement Rewards Card, where your rewards dollars are directly deposited into an IRA, Roth IRA or 529 college-savings plan.

It's not just about choosing the right card, it's also important to lift the taboo on talking about money. It's not only important to talk about money with a spouse or partner, but also with your parents and your kids — before it's too late.

"Talking about money to the important people in your life forces you to come clean about the life you are living and … the way you manage your money," said Katie Dunsworth, one of the "Smart Cookies," a group of friends who formed a money group and now teach others how to take control of their money.

GOP hypocrite is not a sin!? I know the REPUBLICANS never tell a lie! Thanks GWG for the mess you turned the USA into VERY MUCH!

Senate Republicans' ban on earmarks proves short-lived

WASHINGTON -- Senate Republicans' ban on earmarks - money included in a bill by a lawmaker to benefit a home-state project or interest - was short-lived.

Only three days after GOP senators and senators-elect renounced earmarks, Arizona Sen. Jon Kyl, the No. 2 Senate Republican, got himself a whopping $200 million to settle an Arizona Indian tribe's water rights claim against the government.

Kyl slipped the measure into a larger bill sought by President Barack Obama and passed by the Senate on Friday to settle claims by black farmers and American Indians against the federal government. Kyl's office insists the measure is not an earmark, and the House didn't deem it one when it considered a version earlier this year.

But it meets the know-it-when-you-see-it test, critics say. Under Senate rules, an earmark is a spending item inserted "primarily at the request of a senator" that goes "to an entity, or (is) targeted to a specific state."

Earmarking allows lawmakers to steer federal spending to pet projects in their states and districts. Earmarks take many forms, including road projects, improvements to home district military bases, sewer projects, economic development projects. A key trait is that they are projects that haven't been sought by the administration in power.

The money for the 15,000-member White Mountain Apache Tribe was one of four tribal water rights claims totaling almost $570 million that was added to the $5 billion-plus bill. Black farmers will get about $1.2 billion to settle claims that the Agriculture Department's local offices discriminated against them in awarding loans and other aid. Another $3.4 billion goes to American Indians who say the Interior Department swindled them out of oil, gas and other royalties.

The House still has to act on the total package, and likely will after Congress reconvenes Nov. 29 for the continuation of a postelection, lame duck session.

Sens. Max Baucus, D-Mont., and Jeff Bingaman, D-N.M., also got in on the bargain, adding measures benefiting their states to the black farmers-tribal royalty settlements. The two senators obtained almost $370 million for projects in their states to implement water settlements.

Baucus and Bingaman make no bones about their support for earmarks, but Kyl is a recent convert to the anti-earmark crusade of home state GOP colleague Sen. John McCain, who's railed against them for years. The Interior Department sought only $56 million for Indian land and water claims in Obama's proposed budget for this year and no money for Kyl's project, or those wanted by Baucus and Bingaman.

The $200 million in Kyl's measure would be used to construct and maintain a drinking water project on the Fort Apache Indian Reservation, including a dam, reservoir, treatment plant and delivery pipelines.

The water system is settlement compensation for numerous abuses by the federal government, which included clearing trees and other vegetation from thousands of acres of tribal lands in order to increase runoff into the Salt River, a source of water for the cities of Phoenix, Scottsdale, Tempe, Mesa and other communities. The tribe also would waive a half-dozen other claims against the government.

A top Democrat scornfully pointed out that the project is going to a state whose GOP lawmakers claim to oppose earmarks.

"I do know an earmark when I see it. And this, my friends, is an earmark," Sen. Patrick Leahy, D-Vt., said in a prepared floor statement. He said Kyl's project would help the White Mountain Apaches "make snow at their ski resort, improve water flow to their casino and build fish hatcheries to improve local fish production."

Those projects don't appear to be directly funded by the bill, though the measure's wording is confusing.

There's no question, however, that the measure is vitally important to Arizona, where water is a scarce and precious resource.

"It addresses a fundamental need on the White Mountain Apache Reservation and provides certainty to the tribe, to Phoenix and to other water users" in the area, Michael Conner, commissioner of the Bureau of Reclamation, said in an interview.

Conner is a former top aide to Bingaman, who obtained $148 million to implement water rights claims of the Taos Pueblo, along with those of several other New Mexico tribes.

Kyl's office declined a request for an interview with the senator.

The costs of the water claims settlements will be offset by cuts to other government programs, including $562 million in overbudgeted 2010 funding for the federal nutrition program for women, infants and children. Either way, the government is on the hook to settle the water claims or risk larger losses in court.

"You have to do these water settlements or allow the courts to simply award damages," said Rep. Jeff Flake, R-Ariz., perhaps the most anti-earmark member of Congress. "An earmark is something when an individual gets a goodie for their district outside of the regular legislative process."

Typically, Congress "authorizes" big water projects in policy-setting bills that promise funding in future legislation. Kyl's measure started out that way but it morphed behind closed doors into a bill that actually provides the money.

The bill, passed unanimously on a voice vote Friday after most senators had left Washington for the week, vaults his, Baucus' and Bingaman's projects to the front of the line instead of having to compete with other projects for limited Interior Department funds.

The more things change the more they remain the same? "Harvest of Shame" 50 Years Later

Have Working Conditions Improved for America's Migrant Workers in Years Since Edward R. Murrow's Groundbreaking Documentary?

CBS News chief national correspondent Byron Pitts reports on the condition of migrant farm workers 50 years after the premiere of Edward R. Murrow's celebrated documentary "Harvest of Shame."

The day after Thanksgiving in 1960, CBS REPORTS presented what would become one of the most important documentaries of all time, about the plight of the men and women who had provided the holiday feast. They were America's migrant farm workers.

It was intended, the producer said, "To shock the consciousness of the nation." And it did. Now, a half century later, CBS News chief national correspondent Byron Pitts returns to the fields to continue the story.

"They are the migrants, workers in the sweat shops of the soil - the harvest of shame," CBS News correspondent Edward R. Murrow said in 1960.

In "Harvest of Shame," Murrow called them "the forgotten people; the under-educated; the under-fed."

With raw and striking images, Murrow's documentary exposed the poverty and deplorable working conditions endured by America's 2 to 3 million migrant farm workers.

"Only in name are they not a slave," said Rev. Michael Cassidy in the original documentary. "But in the way they are treated, they are worse than slaves."

Men, women and children who harvested crops for the best-fed nation on earth earned barely enough to feed themselves.

From the tomato, bean and sugarcane fields of Florida, working steadily north to the apple orchards of New York, life was an endless road trip. Housing was crowded, dilapidated, often filthy - but all a worker could afford on an average yearly income of $900. That's about $6,700 today.

Fifty years later migrant work is still backbreaking. In Immokalee, Fla., the tomato capital of the country, harvest season is just beginning. But while the work is the same, wages have improved.

That is, if the work can be found. In a tiny trailer he shares with his wife and five children, 62 year-old Juan Lopez gets up before dawn hoping to find work as a tomato picker.

In 2009, Lopez said he "earned $7,800 for a full year of work."

For a few months, a rented trailer is home. Six, sometimes seven days a week, he competes with younger men and women for a limited number of jobs. Like every other industry, farming has suffered in this economy. Those at the bottom suffer most. On the day CBS News was with him, Lopez was hired to work on a tomato farm more than two hours away.

Over the years, the faces in the fields have changed from poor whites and poor blacks to poor Hispanics. Today most migrant workers are from Mexico. Workers make about $10,000 to $12,500 a year. There are no mandated benefits like health insurance, overtime or sick pay.

In extreme cases, some farm workers have been held against their will, forced to work for little or no pay - modern day slaves. Women routinely endure sexual harassment. Since 1997, seven slavery operations involving more than 1,000 workers in Florida's fields have been prosecuted.

Most migrants are hard-working people like Claudia Vasquez, a mother of four. This year, Vasquez has already picked Michigan blueberries, Georgia tomatoes, and now Florida grape tomatoes. On top of her $7.25 an hour minimum wage, she'll earn 60 cents for each 32-lb. bucket she fills.

Vasquez said she has just enough to eat, but "we don't have any money to save."

But soon, that may change. Under an agreement between Florida tomato growers and the CIW, an advocacy group for field workers, working conditions will improve to include shade in the fields, a strict code of conduct, and perhaps most importantly - increased wages.

Nine national food giants, including Whole Foods and McDonald's, have agreed to pay an additional penny for each pound of tomatoes picked. That program could put another $5,000-$7,000 in the pockets of America's field workers each year.

Jon Esformes' family owns Pacific Tomato Growers - the first grower to sign on to the new agreement. "Our effort was really about making it a public conversation because it's intolerable that anybody behave inappropriately within agriculture," he said.

"We know that the industry is changing," said Gerardo Reyes of the Coalition of Immokalee Workers. "We know that it doesn't have to be a harvest of shame anymore. It can be a harvest of hope."

For Thanksgiving, Juan Lopez hopes to have enough to "try to buy a turkey."

Fifty years ago this week, America was given its first glimpse at what Murrow called "the sweat shops of the soil."

Fifty years later, the bounty and blessings of many this Thanksgiving remains the burden of a few.

Here Are The Four Most Ridiculous Things Sarah Palin Has Said In The Last 48 Hours (Stupid is as stupid does!)

Sarah Palin's new book "America By Heart" hits bookshelves today and as a result Sarah Palin has been in the media even more than usual.

The upshot? Even more than usual Palin soundbites to keep you entertained and/or infuriated this holiday Thanksgiving weekend.

Now imagine what it will be like if she runs for president.

1. "Obviously we’ve gotta stand with our North Korean allies.”
Palin weighs in on the North Korean conflict: “This speaks to a bigger picture here that certainly scares me in terms of our national security policy. But obviously we’ve gotta stand with our North Korean allies.” No word on whether Palin can see North Korea from her house.

2. Palin Is Not Interested In The Blue-Blooded Bushes
In response to Barbara Bush's recommendation that Palin stay in Alaska: "I don't want to concede that we have to get used to this kind of thing, because i don't think the majority of Americans want to put up with the blue-bloods — and i want to say it will all due respect because I love the Bushes — the blue bloods who want to pick and chose their winners instead of allowing competition."

3. "I don't want to be a distraction"
On running for President: "I want to be realistic about this. I want to offer myself up in the name of public service if I can do good and if the debate can be centered around those things that Americans should be talking about.
Now I realize that I’m an unconventional potential candidate and, because of that, I don’t want to be speculated about – whether I’m gonna run or not – if all it does is kind of gin up controversy and superficial, ridiculous items to talk about, as we’ve seen in the last couple of weeks, and get people distracted from the important issues that Americans need to be discussing as we go into the 2012 election to unseat Barack Obama.”

4. “I want to help clean up the state that is so sorry today of journalism"
“I want to help clean up the state that is so sorry today of journalism. And I have a communications degree. I studied journalism, who, what, where, when, and why of reporting.
I will speak to reporters who still understand that cornerstone of our democracy, that expectation that the public has for truth to be reported. And then we get to decide our own opinion based on the facts reported to us.”

FINALLY GOP Ex-House Leader DeLay Found Guilty (HAPPY DAYS R HERE AGAIN!)

Ex-House Leader DeLay Found Guilty in Texas Case

AUSTIN, Tex. — Tom DeLay, one of the most powerful and divisive Republican lawmakers ever to come out of Texas, was convicted Wednesday of money-laundering charges in a state trial, five years after his indictment here forced him to resign as majority leader in the House of Representatives.

After 19 hours of deliberation, a jury of six men and six women decided that Mr. DeLay was guilty of conspiring with two associates in 2002 to circumvent a state law against corporate contributions to political campaigns. He was convicted of one charge of money laundering and one charge of conspiracy to commit money laundering.

As the verdict was read, Mr. DeLay, 63, sat stone-faced at the defense table. Then he rose, turned, smiled and hugged his wife and then his weeping daughter in the first row of spectators. He faces between 5 and 99 years in prison, though the judge may choose probation.

A few minutes later, Mr. DeLay said outside the courtroom that he would appeal the decision. He called the prosecution a political vendetta by Democrats in the local district attorney’s office, and revenge for his role in orchestrating the 2003 redrawing of Congressional districts to elect more Republicans.

“This is an abuse of power,” he said. “It’s a miscarriage of justice. I still maintain my innocence. The criminalization of politics undermines our very system.”

The verdict ends the latest chapter in a long legal battle that forced Mr. DeLay to step down. The trial also opened a window on the world of campaign financing, as jurors heard testimony about large contributions flowing to Mr. DeLay from corporations seeking to influence him, and about junkets to luxury resorts where the congressman would rub shoulders with lobbyists in return for donations.

Rosemary Lehmberg, a Democrat and Travis County district attorney, said the decision to pursue charges had nothing to do with partisan politics.

“This was about holding public officials accountable, that no one is above the law,” she said.

During the three-week trial, the prosecution presented more than 30 witnesses in an effort to prove that Mr. DeLay conspired to circumvent the state law. Since 1903, Texas has prohibited corporations from giving money to candidates directly or indirectly.

Mr. DeLay was initially charged with breaking campaign finance law. But prosecutors later switched strategies because it was impossible under the law at the time to accuse someone of conspiring to break campaign finance rules, prosecutors said.

Instead, prosecutors used a novel legal theory never before tried in Texas: They argued that Mr. DeLay and two of his political operatives — John Colyandro and Jim Ellis — had violated the criminal money-laundering law.

They were charged with conspiring to funnel $190,000 in corporate donations to state candidates through the Republican National Committee.

The main facts of the case were never in dispute.

In mid-September 2002, as the election heated up, Mr. DeLay’s state political action committee, Texans for a Republican Majority, gave a check for $190,000 to the Republican National Committee. The money had been donated earlier in the year by various corporate lobbyists seeking to influence Mr. DeLay, several witnesses said.

On Sept. 13, the check was delivered to the R.N.C. by Mr. Ellis, who was Mr. DeLay’s top political operative in Washington and headed his federal political action committee.

At the same meeting, Mr. Ellis also gave the Republican director of political operations, Terry Nelson, a list of state candidates and an amount to be sent to each. Mr. Nelson testified that Mr. Ellis had told him the request for the swap had come from Mr. DeLay.

In early October, donations were sent from a separate account filled with individual donations to seven Republican candidates in Texas. Six of them won. Republicans took control of the Legislature for the first time in modern history and in 2003 pushed through a redistricting plan, orchestrated by Mr. DeLay, that sent more Texas Republicans to Congress in 2004 and helped him consolidate power.

Jurors had to wrestle with the questions of what Mr. DeLay knew about the transaction, when he found out and whether he participated in the decision to swap the money.

Another central issue facing the panel was whether the corporate contributions could be considered illicit. To be guilty of money laundering, the prosecution had to show the money had been obtained through an illegal activity before it was laundered.

The jury consisted of a Republican, six Democrats, two independent conservatives and three independent liberals.

Prosecutors presented a mountain of circumstantial evidence — e-mails, telephone records, calendars, brochures and other documents — trying to persuade jurors that Mr. DeLay played a leading role in the plan and intended to break the Texas election law from the moment his political operatives solicited the donations.

The prosecutor, Gary Cobb, said the prosecution had a tough job in demonstrating that Mr. DeLay was responsible for the actions of his political associates, Mr. Ellis and Mr. Colyandro, who did not testify and still await trial on lesser charges.

None of the other witnesses testified directly about Mr. DeLay’s control over the decision, and the prosecution instead relied on interviews Mr. DeLay had given to prosecutors and journalists. “It was almost entirely circumstantial, and there were a lot of people with motives not to have Tom DeLay convicted,” Mr. Cobb said.

During the last day of deliberations, the jurors asked for transcripts of Mr. DeLay’s interview with prosecutors in 2005, in which he said he knew about the swap in advance. “Jim Ellis told me he was going to do it before he did it,” Mr. DeLay said in the interview.

But the lead defense lawyer, Dick DeGuerin, maintained that the money swap was legal because the Republican National Committee kept a firewall between accounts holding corporate and individual contributions.

“It’s not the same money” was his mantra during the trial.

He also presented evidence to distance Mr. DeLay from the actions of his political operatives, arguing that while Mr. Ellis told Mr. DeLay about the transaction, Mr. DeLay never gave his approval.

Judge Pat Priest has wide discretion in sentencing the former majority leader, who was known as the Hammer for his no-holds-barred style during 20 years in the House of Representatives.

Mr. DeGuerin said Mr. DeLay would try to convince an appeals court that the money-laundering statute should never had been applied to the money swap — because the original donations were legal and also because the donations to the state candidates came out of a different account than the one in which the corporate donations were deposited.

“It will never stand,” Mr. DeGuerin said.

Sarah Palin Hits George and Barbara Bush as Elite "Blue Bloods"

Apearing on Laura Ingraham's radio show today, Sarah Palin said that while she "love[s] the Bushes," she sees George H.W. and Barbara Bush as "blue bloods" who are trying to "pick and chose" the 2012 Republican presidential nominee for president.

The comment comes after George H.W. Bush said former Massachusetts Gov. Mitt Romney is his favorite potential Republican presidential contender and Barbara Bush said she hopes Palin stays in Alaska.

On her radio show today, as Politico's Ben Smith reports, Ingraham said that "elites" like the Bushes are trying to "kneecap" the former Alaska governor, who has said she is considering a presidential run. (Ingraham also pointed to Republican New Jersey governor Chris Christie's apparent dismissal of Palin on Jimmy Fallon's late-night talk show, where Christie said "it's an amazing world" when asked about the possibility of a Palin presidency.) Palin replied that said elites don't understand that "competition is good."

Efforts to "shoot internally" don't make sense, Palin continued, but "that's the way they roll."

"I don't want to sort of concede that we have to get used to this kind of thing, because I don't think the majority of Americans want to put up with the blue-bloods -- and I say it will all due respect, because I love the Bushes -- but the blue bloods who want to pick and chose their winners instead of allowing competition to pick and choose the winners."

"I don't know if that kind of stuff is planned out, but it is what it is, we deal with it, and as I say we forge ahead and we keep doing what we're doing," Palin added. Top Republicans are reportedly working behind the scenes to keep Palin from winning the Republican nomination out of fears that the polarizing former vice presidential candidate would lose badly to President Obama in a general election.

Palin also criticized Michelle Obama during the show, stating that her anti-obesity initiative reflects the first lady's belief that parents can't be trusted "to make decisions for their own children."

"Instead of a government thinking that they need to take over, make decisions for us according to some politician or politician's wife's priority, just leave us alone, get off our back, and allow us as individuals to exercise our own God-given rights to make our own decisions, and then our country gets back on the right track," she said.

Health insurers face new federal rules on medical spending (FINALLY people's money on HEALTH CARE not on big pay checks for INSURANCE blooksuckers!)

Amy Goldstein Washington Post

The Obama administration issued far-reaching rules Monday to carry out a controversial promise that the new health-care law makes to consumers: insurers must spend at least $4 out of $5 they collect through premiums on direct medical services and other means to improve Americans' health.

Under the rules to take effect in January, the government will reach in novel ways into the workings of the insurance industry to try to drive down bureaucracy, profits and executives' pay.

For the first time, health plans will have to disclose many details about how they allot their money, calculate the portion of their spending that promotes good health, and - if they devote too much income to the wrong purposes - give customers refunds.

In announcing the new standards for what are known in insurance jargon as "medical loss ratios," Health and Human Services Secretary Kathleen Sebelius portrayed the rules as a "guarantee that consumers get the most out of their premium dollars."

At the same time, the regulations make a few concessions to the insurance industry. The administration has given new and small health plans extra time to meet the standards. Insurers will be allowed to deduct most of their taxes before doing the math. And states may ask for federal permission to exempt from the rules health plans sold to individuals - a relatively small but expensive and shaky part of the insurance market - if they can prove that meeting the requirements would prompt such plans to stop doing business within the state.

The regulation is the kind of important fine print that will determine how the sprawling health-care law enacted by Congress eight months ago will play out in practice. The rules will affect about 180 million Americans with private insurance.

The regulations represent the first time the federal government has specified the proportion of insurance premiums that must be devoted to patients' well-being. For the large groups of employees that make up most of the U.S. insurance market, at least 85 percent must go to coverage. For policies sold to individuals and small groups, the figure is at least 80 percent.

The administration's decision also is a window on the tug of war that is certain to persist in coming years as constituencies with competing stakes jockey over myriad federal and state decisions that translate legislative language into reality.

The standards culminate months of heavy lobbying by the insurance industry, health-care providers and consumers over how stringent the government should be in defining which activities health plans may count as beneficial to patients.

Within hours of HHS's announcement, most advocacy groups for patients and leading congressional Democrats praised the agency's work. Republicans were noticeably silent.

Some experts in health policy question the premise of trying to rein in insurance costs through this approach, pointing out that there are no restrictions on whether insurers can raise their premiums. "If you want to play the game, what you do is gut your program of cost containment" and thus avoid the administrative expenses of managing care, said Robert L. Laszewski, a consultant with clients across the health-care system. "It just makes no sense."

The standards set forth Monday adopt wholesale a set of recommendations given to the administration last month by the nation's state insurance regulators. The law gave the National Association of Insurance Commissioners, which wanted a large say, the task of developing regulatory language and submitting it to HHS to be "certified."

Federal health officials could have departed from those recommendations but did not. They did go beyond the association in several areas where the group did not give formal advice.

The federal rules say, for instance, that two small parts of the insurance market, bare-bones coverage known as "mini-med" policies and health plans sold to Americans living abroad, will not have to meet the standards for at least a year. HHS will collect more data on those two forms of insurance and decide whether to apply the rules to them.

One of the most significant uncertainties is how lenient HHS will be when a state asks for exemptions for its insurance market. Already, Maine, Iowa, Georgia and South Carolina have sought such exemptions.

After a news conference to announce the rules, several HHS officials convened a private phone call on Monday with the nation's insurance commissioners and reassured them that the department wanted to work closely with states, according to one participant who asked not to be identified because the call was private.

Karen Ignagni, president of the main industry trade group, America's Health Insurance Plans, said that her group would continue to pursue some ideas that HHS rejected: letting states ask for exemptions for small-group and large insurance plans, and letting insurers count fraud-prevention efforts and the cost of switching to new billing systems as part of their efforts to improve health-care quality.

An administration official declined to comment on whether HHS was open to reconsidering the insurance lobbyists' request.

Attack on Michelle Obama shows Palin's ignorance of history Richard Cohen

When I was 11, my father thought it was time to show my sister and me the nation's capital. I have only vague memories of that trip - the heat, the expanse of the White House's grounds, the Jefferson Memorial. I do remember we took Route 1 through Baltimore (no I-95 yet) and it was there that I saw my first sign with the word "colored" on it - a rooming house, I think. This was 1952, and the United States was an apartheid nation.

It is Sarah Palin who brings back these memories. In her new book, she reportedly takes Michelle Obama to task for her supposedly infamous remark from the 2008 campaign: "For the first time in my adult life, I am proud of my country because it feels like hope is finally making a comeback." Instantly, Republicans pounced. Among the first to do so was Cindy McCain, who said, "I have and always will be proud of my country." It was a cheap shot, but her husband's selection of Palin for the ticket and plenty of cheap shots from Palin ("death panels," etc.) were yet to come.

Michelle Obama quickly explained herself. She was proud of the turnout in the primaries - so many young people, etc. Evan Thomas, writing perceptively in Newsweek, thought - as I did - that she was saying something else. He dug into her senior thesis at Princeton - "Princeton-Educated Blacks and the Black Community" - to find a young woman who felt, or was made to feel, "more aware of my 'blackness' than ever before." This was not a statement of racism. This was a statement of fact.

It's appalling that Palin and too many others fail to understand that fact - indeed so many facts of American history. They don't offer the slightest hint that they can appreciate the history of the Obama family and that in Michelle's case, her ancestors were slaves - Jim Robinson of South Carolina, her paternal great-great grandfather, being one. Even after they were freed they were consigned to peonage, second-class citizens, forbidden to vote in much of the South, dissuaded from doing so in some of the North, relegated to separate schools, restaurants, churches, hotels, waiting rooms of train stations, the back of the bus, the other side of the tracks, the mortuary, the cemetery and, if whites could manage it, heaven itself.

It was the government that oppressed blacks, enforcing the laws that imprisoned them and hanged them for crimes grave and trivial, whipped them if they bolted for freedom and, in the Civil War, massacred them if they were captured fighting for the North. And yet if African Americans hesitate in embracing the mythical wonderfulness of America, they are accused of racism - of having the gall to know more about their own experience and history than Palin and others think they should.

Why do politicians such as Palin and commentators such as Glenn Beck insist that African Americans go blank on their own history - as blank as apparently Palin and Beck are themselves? Why must they insist that blacks join them in embracing a repellent history that once caused America to go to war with itself? Besides Princeton, Michelle Obama is a graduate of Harvard Law School. It's hardly possible that she is not knowledgeable about the history of African Americans - no Ellis Island for them, immigrants in their colorful native dress waving at the camera. Should she forget it all simply because she went to Ivy League schools - be thankful for what she had gotten and the hell with the rest? Why should she be more grateful than Cindy McCain?

Sarah Palin teases that she might run for president. But she is unqualified - not just in the (let me count the) usual ways, but because she does not know the country. She could not be the president of black America nor of Hispanic America. She knows more about grizzlies than she does about African Americans - and she clearly has more interest in the former than the latter. Did she once just pick up the phone and ask Michelle Obama what she meant by her remark? Did she ask about her background? What it was like at Princeton? What it was like for her parents or her grandparents? I can offer a hint. If they were driving to Washington, they slowed down and stopped where the sign said "colored" - and the irritated Palins of the time angrily hit the horn and went on their way.