'Cash-for-Clunkers' Bill Passes in Bid To Revive Car Sales
Trade-In Plan Set for Obama's Signature
The Senate approved a $1 billion program yesterday to give vouchers to consumers who trade in their gas-guzzling clunkers for more fuel-efficient models -- a move that dealers hope will revive slumping auto sales.
Congressional leaders attached the legislation to a $106 billion spending bill to fund troops in Iraq and Afghanistan. The spending bill passed by a 91 to 5 vote but not before some Republican lawmakers unsuccessfully sought to strip the measure from the bill.
"Let's not add a billion dollars of unnecessary debt," said Sen. Judd Gregg (R-N.H.) during the Senate floor debate.
Dealers, unions, trade groups and automakers have been lobbying for months for the legislation in hopes that it would stop the streak of dismal U.S. auto sales.
"The simple fact is that we need to get Americans into car showrooms, and this is the bill that will do it," Rep. Candice S. Miller (R-Mich.), a co-sponsor of the legislation, said in a statement.
The auto sales program, which offers vouchers of up to $4,5000, now moves to the White House for the president's signature. President Obama has repeatedly encouraged Congress to pass a so-called cash-for-clunkers bill.
Consumers would be able to start using the vouchers as soon as the National Highway Traffic Safety Administration finalizes the rules -- a process that must conclude within 30 days of the president's approval.
Under the program, trade-in vehicles, 1984 models or newer, must have average fuel economy of no more than 18 miles per gallon. And the new car or truck must get better gas mileage than the one that was scrapped.
The payoff grows depending on the difference in the fuel efficiencies of the old and new cars. For instance, a new car getting at least 4 more miles per gallon than the old car will be eligible for a $3,500 voucher. A new car getting at least 10 more miles per gallon would get a $4,500 voucher.
To guarantee vehicles are actually roadworthy -- and not just sitting on cinder blocks -- trade-ins must be registered and insured to the same owner for at least a year.
Speaking on the Senate floor, Sen. Carl M. Levin (D-Mich.) said the program "will provide a much-needed boost to the automobile industry."
The legislation's funding would last through the end of the fiscal year, Nov. 1. But some lawmakers are already pushing to expand the program.
Several other countries, such as China and Italy, have offered similar trade-in vouchers. And lawmakers point to the success of Germany's program as indication that vouchers can turn dismal auto sales around.
At the end of the program's first month, sales in Germany were up 21 percent from a year before. During the same period, U.S. sales slumped 41 percent.
Dealers applauded the Senate's action yesterday, and some got additional good news. GM said it had decided to keep 60 of the more than 1,000 dealers with whom it had sought to terminate agreements. The reversals were made after the automaker corrected financial information that was used to evaluate which stores to keep.
The company, which is operating under bankruptcy protection, declined to name the individual dealers.
Thursday, June 18, 2009
Judge to review Cheney interview in CIA leak case
NEDRA PICKLER Associated Press
A federal judge said Thursday that he wants to look at notes from the FBI's interview with former Vice President Dick Cheney during the investigation into who leaked the identity of a CIA operative.
U.S. District Judge Emmet Sullivan's decision to review the documents followed arguments by Obama administration lawyers that sounded much like the reasons the Bush administration provided for keeping Cheney's interview from the public.
Justice Department lawyers told the judge that future presidents and vice presidents may not cooperate with criminal investigations if they know what they say could become available to their political opponents and late-night comics who would ridicule them.
"If we become a fact-finder for political enemies, they aren't going to cooperate," Justice Department attorney Jeffrey Smith said during a 90-minute hearing. "I don't want a future vice president to say, `I'm not going to cooperate with you because I don't want to be fodder for 'The Daily Show.'"
Sullivan said the Justice Department must give him more precise reasons for keeping the information confidential than they had in previous court filings.
Cheney agreed to talk to FBI agents in June 2004 as they were investigating the leak of former CIA operative Valerie Plame's identity to reporters the year before. Her name was revealed after her husband, former Ambassador Joseph Wilson, criticized the Bush administration's prewar intelligence on Iraq.
The leak touched off a lengthy inquiry that led to Cheney's former top aide, I. Lewis "Scooter" Libby, being convicted on charges of obstruction of justice and lying to investigators. During his trial, jurors found that Libby lied to the FBI and a grand jury about his conversations with reporters. Bush commuted Libby's sentence, and he never served prison time.
Libby was the only person charged in the case. No one was charged with leaking Wilson's name.
In July 2008, the liberal watchdog group Citizens for Responsibility and Ethics in Washington submitted a Freedom of Information Act request to the Justice Department seeking records related to Cheney's interview in the investigation. The Justice Department declined to turn over the records, and CREW filed a lawsuit in August.
The Justice Department reported in court filings that it found three documents totaling 67 pages that related to the watchdog group's FOIA request, but said the documents were exempt since they were part of a law enforcement matter and their release could interfere with future cases. They also said the interview contained classified material and that presidential communications were shielded to allow candor with the president and his advisers.
CREW argued that the public has a right to know the role that Cheney played in the leak and why he was not prosecuted.
Libby told the FBI in 2003 that it was possible that Cheney ordered him to reveal Plame's identity to reporters. The prosecutor in that case, Special Counsel Patrick Fitzgerald, said in his closing remarks at Libby's trial that there was a "cloud" over Cheney's role in the case.
Fitzgerald told members of Congress who also sought the information that Cheney set no conditions about the use of his interview with investigators.
A Cheney spokeswoman declined to comment on the case.
A federal judge said Thursday that he wants to look at notes from the FBI's interview with former Vice President Dick Cheney during the investigation into who leaked the identity of a CIA operative.
U.S. District Judge Emmet Sullivan's decision to review the documents followed arguments by Obama administration lawyers that sounded much like the reasons the Bush administration provided for keeping Cheney's interview from the public.
Justice Department lawyers told the judge that future presidents and vice presidents may not cooperate with criminal investigations if they know what they say could become available to their political opponents and late-night comics who would ridicule them.
"If we become a fact-finder for political enemies, they aren't going to cooperate," Justice Department attorney Jeffrey Smith said during a 90-minute hearing. "I don't want a future vice president to say, `I'm not going to cooperate with you because I don't want to be fodder for 'The Daily Show.'"
Sullivan said the Justice Department must give him more precise reasons for keeping the information confidential than they had in previous court filings.
Cheney agreed to talk to FBI agents in June 2004 as they were investigating the leak of former CIA operative Valerie Plame's identity to reporters the year before. Her name was revealed after her husband, former Ambassador Joseph Wilson, criticized the Bush administration's prewar intelligence on Iraq.
The leak touched off a lengthy inquiry that led to Cheney's former top aide, I. Lewis "Scooter" Libby, being convicted on charges of obstruction of justice and lying to investigators. During his trial, jurors found that Libby lied to the FBI and a grand jury about his conversations with reporters. Bush commuted Libby's sentence, and he never served prison time.
Libby was the only person charged in the case. No one was charged with leaking Wilson's name.
In July 2008, the liberal watchdog group Citizens for Responsibility and Ethics in Washington submitted a Freedom of Information Act request to the Justice Department seeking records related to Cheney's interview in the investigation. The Justice Department declined to turn over the records, and CREW filed a lawsuit in August.
The Justice Department reported in court filings that it found three documents totaling 67 pages that related to the watchdog group's FOIA request, but said the documents were exempt since they were part of a law enforcement matter and their release could interfere with future cases. They also said the interview contained classified material and that presidential communications were shielded to allow candor with the president and his advisers.
CREW argued that the public has a right to know the role that Cheney played in the leak and why he was not prosecuted.
Libby told the FBI in 2003 that it was possible that Cheney ordered him to reveal Plame's identity to reporters. The prosecutor in that case, Special Counsel Patrick Fitzgerald, said in his closing remarks at Libby's trial that there was a "cloud" over Cheney's role in the case.
Fitzgerald told members of Congress who also sought the information that Cheney set no conditions about the use of his interview with investigators.
A Cheney spokeswoman declined to comment on the case.
Report on Bush Policy May Come In 'Weeks' FINALLY!
Probe Is Focused On Interrogation Program's Approval
By Carrie Johnson Washington Post
A Justice Department report focusing on possible ethics violations by Bush administration lawyers who approved waterboarding of terrorism suspects is still "a matter of weeks" from release, Attorney General Eric H. Holder Jr. told lawmakers yesterday.
At a Senate Judiciary Committee hearing, Holder said that officials in the department's Office of Professional Responsibility (OPR), which investigates allegations of attorney misconduct, are reworking the 200-page draft report and incorporating comments from lawyers who have been the focus of the investigation.
The conclusions of the five-year-long probe are hotly anticipated because they could shed new light on the interplay between the Bush White House, the Justice Department and the CIA in formulating an interrogation policy that critics assert included torture.
Key Senate Democrats and left-leaning interest groups yesterday exhorted Holder to pick up the pace. Sens. Richard J. Durbin (D-Ill.) and Sheldon Whitehouse (D-R.I.) pointed out that the former government lawyers whose conduct is at issue had submitted their arguments six weeks ago.
"The American people have a right to know how the U.S. Justice Department came to issue legal opinions approving acts of cruelty that shocked the world, damaged U.S. moral authority and harmed efforts to combat terrorism effectively," Human Rights First and more than a half-dozen other activist groups wrote. "We urge you to release the OPR report now and send a clear message that transparency in government and adherence to the law are core American values as well as key assets to U.S. national security."
But the attorney general, apparently trying to lower expectations, cautioned lawmakers that the acting chief of the OPR, Mary Patrice Brown, was carefully examining the materials and that they eventually would require extensive declassification, adding even more time to the release date.
"One of the things that I think we want to do is to declassify as much of this report as we can so that when people read it, either in this body or the general public, they'll have a full feeling for what it is our lawyers in the Office of Professional Responsibility dealt with and what is the basis for the conclusions that they reach," Holder said.
Obama administration officials generally have advocated looking forward to new initiatives, rather than spending attention and scarce resources finding fault with their predecessors. The White House agenda already is packed with reforms to health care and foreign policy and other initiatives, so delaying a conversation about alleged torture that could inflame Republicans and polarize voters may be a desirable political move, analysts said.
A draft version of the report earlier this year recommended disciplinary referrals to state bar associations for two of the former department lawyers, John C. Yoo and Jay S. Bybee, but their supporters say the men acted in good faith based on their view of the anti-torture statutes. The conduct of another lawyer, Steven G. Bradbury, is also under review.
Independent experts disagree about the likelihood that the bar associations will bring cases against the men, and the statute of limitations in Pennsylvania, where Yoo is licensed, has expired.
Criminal charges against the lawyers are unlikely, legal experts say, so the ethics report is one of few avenues to legal reckoning for officials who blessed or developed the Bush interrogation policies. Last week a federal judge in California allowed a former detainee to go ahead with a lawsuit alleging that Yoo violated his constitutional rights.
By Carrie Johnson Washington Post
A Justice Department report focusing on possible ethics violations by Bush administration lawyers who approved waterboarding of terrorism suspects is still "a matter of weeks" from release, Attorney General Eric H. Holder Jr. told lawmakers yesterday.
At a Senate Judiciary Committee hearing, Holder said that officials in the department's Office of Professional Responsibility (OPR), which investigates allegations of attorney misconduct, are reworking the 200-page draft report and incorporating comments from lawyers who have been the focus of the investigation.
The conclusions of the five-year-long probe are hotly anticipated because they could shed new light on the interplay between the Bush White House, the Justice Department and the CIA in formulating an interrogation policy that critics assert included torture.
Key Senate Democrats and left-leaning interest groups yesterday exhorted Holder to pick up the pace. Sens. Richard J. Durbin (D-Ill.) and Sheldon Whitehouse (D-R.I.) pointed out that the former government lawyers whose conduct is at issue had submitted their arguments six weeks ago.
"The American people have a right to know how the U.S. Justice Department came to issue legal opinions approving acts of cruelty that shocked the world, damaged U.S. moral authority and harmed efforts to combat terrorism effectively," Human Rights First and more than a half-dozen other activist groups wrote. "We urge you to release the OPR report now and send a clear message that transparency in government and adherence to the law are core American values as well as key assets to U.S. national security."
But the attorney general, apparently trying to lower expectations, cautioned lawmakers that the acting chief of the OPR, Mary Patrice Brown, was carefully examining the materials and that they eventually would require extensive declassification, adding even more time to the release date.
"One of the things that I think we want to do is to declassify as much of this report as we can so that when people read it, either in this body or the general public, they'll have a full feeling for what it is our lawyers in the Office of Professional Responsibility dealt with and what is the basis for the conclusions that they reach," Holder said.
Obama administration officials generally have advocated looking forward to new initiatives, rather than spending attention and scarce resources finding fault with their predecessors. The White House agenda already is packed with reforms to health care and foreign policy and other initiatives, so delaying a conversation about alleged torture that could inflame Republicans and polarize voters may be a desirable political move, analysts said.
A draft version of the report earlier this year recommended disciplinary referrals to state bar associations for two of the former department lawyers, John C. Yoo and Jay S. Bybee, but their supporters say the men acted in good faith based on their view of the anti-torture statutes. The conduct of another lawyer, Steven G. Bradbury, is also under review.
Independent experts disagree about the likelihood that the bar associations will bring cases against the men, and the statute of limitations in Pennsylvania, where Yoo is licensed, has expired.
Criminal charges against the lawyers are unlikely, legal experts say, so the ethics report is one of few avenues to legal reckoning for officials who blessed or developed the Bush interrogation policies. Last week a federal judge in California allowed a former detainee to go ahead with a lawsuit alleging that Yoo violated his constitutional rights.
Wednesday, June 17, 2009
Nevada senator apologizes for affair with former staffer
MORE GOP Family VALUES!!
John Ensign, a rising GOP star and possible presidential candidate, says he won't resign.
Reporting from Las Vegas — Nevada Sen. John Ensign, an emerging Republican leader who has been mentioned as a possible 2012 presidential candidate, apologized Tuesday for an extramarital affair with a former staff member but indicated that he had no plans to resign.
"It's absolutely the worst thing I have ever done in my life," he said at a televised news conference. "If there was ever anything that I could take back in my life, this would be it."
A grim-faced Ensign, 51, did not identify the woman he was involved with from December 2007 to August 2008, although he described her and her husband as close friends who had worked for him.
"That closeness put me into situations during a very difficult time in my marriage, which led to my inappropriate behavior," he said. "We caused deep pain to both families, and for that I am sorry."
He and his wife, Darlene, sought counseling, he said, and their marriage is "stronger than ever." She was not at the news conference but issued a statement supporting him. They have three children.
It was unclear why Ensign made the disclosure so abruptly. He skipped a Senate vote related to tourism, his state's lifeblood, and flew to Las Vegas for the hastily arranged news conference.
The silver-haired, telegenic conservative has been a rising star in the Republican Party. He is a regular on the cable news circuit, often criticizing President Obama's economic stimulus package. Ensign recently visited Iowa, where he chatted up locals, ate ice cream and fueled speculation that he was gearing up for a presidential bid.
He headed the GOP's Senate campaign panel in 2008, when the party lost at least eight seats. Now he chairs the Republican Policy Committee, a Senate leadership position.
Political experts speculated that Ensign's admission would do him little harm here. "He's the leading voice in Nevada and in the country for fiscal restraint," said Robert Uithoven, a Republican consultant based in the state.
But the revelations could derail his national ambitions, at least in the short term, by turning off values voters in the South and the Corn Belt, experts said.
"It's hard enough for someone in Nevada to run on the national stage because Nevada has such a libertarian streak that others don't understand," said Joseph M. Valenzano III, who teaches political communication at the University of Nevada, Las Vegas. "He didn't need this."
The senator also could be vulnerable to charges of hypocrisy. He belongs to Promise Keepers, a Christian group whose members pledge, among other things, to abide by biblical principles to build strong marriages.
As a candidate for the Senate, Ensign demanded that President Clinton resign after having an affair with a White House intern. He also voted to impeach Clinton.
Years later, Ensign strongly suggested that Sen. Larry Craig resign in the wake of his arrest in a 2007 airport bathroom sex sting in Minneapolis. The Idaho Republican pleaded guilty to a misdemeanor.
Ensign is a social conservative who opposes abortion and backs gun rights, but he won office by touting small-government principles, said Eric Herzik, who chairs the University of Nevada, Reno, political science department.
A veterinarian, Ensign spent four years in the House and was elected to the Senate in 2000. Two years earlier, he had lost a contentious race by a few hundred votes to Sen. Harry Reid, now the Senate majority leader.
The pair has a well-known nonaggression pact: They refuse to criticize each other in public.
"I don't know the details. I talked with him today," Reid told reporters, according to CQPolitics.com. "Of course, he's my friend. This is a private family matter. I just hope that Darlene and he work things out."
Ensign, among Nevada's most popular politicians, has vowed to help the state party rebuild after the devastating 2008 election.
The GOP has been hobbled by an unpopular governor, Jim Gibbons, whose estranged wife has accused him of having affairs with at least two women.
John Ensign, a rising GOP star and possible presidential candidate, says he won't resign.
Reporting from Las Vegas — Nevada Sen. John Ensign, an emerging Republican leader who has been mentioned as a possible 2012 presidential candidate, apologized Tuesday for an extramarital affair with a former staff member but indicated that he had no plans to resign.
"It's absolutely the worst thing I have ever done in my life," he said at a televised news conference. "If there was ever anything that I could take back in my life, this would be it."
A grim-faced Ensign, 51, did not identify the woman he was involved with from December 2007 to August 2008, although he described her and her husband as close friends who had worked for him.
"That closeness put me into situations during a very difficult time in my marriage, which led to my inappropriate behavior," he said. "We caused deep pain to both families, and for that I am sorry."
He and his wife, Darlene, sought counseling, he said, and their marriage is "stronger than ever." She was not at the news conference but issued a statement supporting him. They have three children.
It was unclear why Ensign made the disclosure so abruptly. He skipped a Senate vote related to tourism, his state's lifeblood, and flew to Las Vegas for the hastily arranged news conference.
The silver-haired, telegenic conservative has been a rising star in the Republican Party. He is a regular on the cable news circuit, often criticizing President Obama's economic stimulus package. Ensign recently visited Iowa, where he chatted up locals, ate ice cream and fueled speculation that he was gearing up for a presidential bid.
He headed the GOP's Senate campaign panel in 2008, when the party lost at least eight seats. Now he chairs the Republican Policy Committee, a Senate leadership position.
Political experts speculated that Ensign's admission would do him little harm here. "He's the leading voice in Nevada and in the country for fiscal restraint," said Robert Uithoven, a Republican consultant based in the state.
But the revelations could derail his national ambitions, at least in the short term, by turning off values voters in the South and the Corn Belt, experts said.
"It's hard enough for someone in Nevada to run on the national stage because Nevada has such a libertarian streak that others don't understand," said Joseph M. Valenzano III, who teaches political communication at the University of Nevada, Las Vegas. "He didn't need this."
The senator also could be vulnerable to charges of hypocrisy. He belongs to Promise Keepers, a Christian group whose members pledge, among other things, to abide by biblical principles to build strong marriages.
As a candidate for the Senate, Ensign demanded that President Clinton resign after having an affair with a White House intern. He also voted to impeach Clinton.
Years later, Ensign strongly suggested that Sen. Larry Craig resign in the wake of his arrest in a 2007 airport bathroom sex sting in Minneapolis. The Idaho Republican pleaded guilty to a misdemeanor.
Ensign is a social conservative who opposes abortion and backs gun rights, but he won office by touting small-government principles, said Eric Herzik, who chairs the University of Nevada, Reno, political science department.
A veterinarian, Ensign spent four years in the House and was elected to the Senate in 2000. Two years earlier, he had lost a contentious race by a few hundred votes to Sen. Harry Reid, now the Senate majority leader.
The pair has a well-known nonaggression pact: They refuse to criticize each other in public.
"I don't know the details. I talked with him today," Reid told reporters, according to CQPolitics.com. "Of course, he's my friend. This is a private family matter. I just hope that Darlene and he work things out."
Ensign, among Nevada's most popular politicians, has vowed to help the state party rebuild after the devastating 2008 election.
The GOP has been hobbled by an unpopular governor, Jim Gibbons, whose estranged wife has accused him of having affairs with at least two women.
Gun Rulings Open Way to Supreme Court Review
NY TIMES By JOHN SCHWARTZ
A year ago, the United States Supreme Court issued a landmark decision establishing the constitutional right of Americans to own guns. But the justices did not explain what the practical effect of that ruling would be on city and state gun laws.
Could a city still ban handguns? The justices said the District of Columbia could not, but only because it is a special federal district. The question of the constitutionality of existing city and state gun laws was left unanswered.
That left a large vacuum for the lower courts to fill. Supporters of gun rights filed a flurry of lawsuits to strike down local gun restrictions, and now federal appeals courts have begun weighing in on this divisive issue, using very different reasoning.
One court this month upheld Chicago’s ban on automatic weapons and concealed handguns, while in April a California court disagreed on the constitutional issue.
The differing opinions mean that the whole issue of city and state gun laws will probably head back to the Supreme Court for clarification, leading many legal experts to predict a further expansion of gun rights.
The new cases are fallout from last year’s Supreme Court case, District of Columbia v. Heller, which struck down parts of Washington’s gun control ordinance, the strictest in the country, and stated for the first time that the Second Amendment gives individuals a right to keep and bear arms for personal use. But the court declined to say whether the Second Amendment in general applies to state and local governments.
In January, the United States Court of Appeals for the Second Circuit, in New York, in a ruling joined by Judge Sonia Sotomayor, declined to apply the Second Amendment to a New York law that banned the martial arts device known as chukka sticks. The ban was allowed to stay in place.
Then in April, a three-judge panel of the Ninth Circuit, in San Francisco, ruled that the Second Amendment did apply to the states, even though it allowed a California county to ban guns on government property like state fairgrounds. That case, Nordyke v. King, is being considered for a rehearing by the full Ninth Circuit.
Those two conflicting cases set the stage for two other cases that were heard as one in the Seventh Circuit in Chicago, testing that city’s handgun ban. On June 2, a three-judge panel of the court, led by Chief Judge Frank H. Easterbrook, a well-known conservative, ruled that there was no basis for the court to apply the Second Amendment to the states. Such a decision, Judge Easterbrook wrote, should be made only by the Supreme Court, not at the appellate level.
The right of states to make their own decisions on such matters, Judge Easterbrook wrote, “is an older and more deeply rooted tradition than is a right to carry any particular kind of weapon.”
The lawyers for the plaintiffs, including the National Rifle Association, have asked the Supreme Court to take up the Chicago cases.
A split among the federal appeals circuits, especially on constitutional issues, invites Supreme Court action, said Adam Winkler, a law professor at the University of California, Los Angeles.
“Californians, Hawaiians and Oregonians have a Second Amendment right to bear arms, but New Yorkers, Illinoisans, and Wisconsinites don’t,” Professor Winkler said. “The Supreme Court will want to correct this sooner rather than later.”
The process of applying amendments of the Bill of Rights to the states, known as incorporation, began after the Civil War but had its heyday in the activist Supreme Court of the Earl Warren era. Much of the Bill of Rights, including the First Amendment’s freedom of speech and some rights of criminal defendants, have been applied to the states, but other elements have not, including the Seventh Amendment right to a civil jury trial and the Second Amendment.
Incorporation fell out of favor after the 1960s, but a new generation of largely liberal scholars of law and history have brought it back into the intellectual mainstream, said Akhil Reed Amar, a law professor at Yale University, who supports the process.
“The precedents are now supportive of incorporation of nearly every provision of the Bill of Rights,” Professor Amar said. “Now what’s odd is that the Second Amendment doesn’t apply to the states.”
Sanford Levinson, a law professor at the University of Texas, said he would be surprised if the Supreme Court accepted these gun cases, because some of the conservative justices on the court had scoffed at incorporation arguments in the past and might not want to set a precedent.
Professor Amar, however, argued that the justices would not only take up the case but would also ultimately vote for incorporation of the Second Amendment.
Even if the Second Amendment becomes the controlling law of every state and town, constitutional scholars say it is still unlikely that gun laws would be overturned wholesale. The Supreme Court’s Heller decision last year, notes Nelson Lund, a law professor at George Mason University, “clearly indicates that governments will still have wide latitude to regulate firearms.”
Even the Ninth Circuit in California, while applying the Second Amendment to the states, still upheld the gun ordinance that gave rise to the lawsuit.
Eugene Volokh, a law professor at the University of California, Los Angeles, said the view of the Ninth Circuit reflected what polls have said was, by and large, the view of the American people.
“There is a right to bear arms,” Professor Volokh said, “but it’s not absolute.”
A year ago, the United States Supreme Court issued a landmark decision establishing the constitutional right of Americans to own guns. But the justices did not explain what the practical effect of that ruling would be on city and state gun laws.
Could a city still ban handguns? The justices said the District of Columbia could not, but only because it is a special federal district. The question of the constitutionality of existing city and state gun laws was left unanswered.
That left a large vacuum for the lower courts to fill. Supporters of gun rights filed a flurry of lawsuits to strike down local gun restrictions, and now federal appeals courts have begun weighing in on this divisive issue, using very different reasoning.
One court this month upheld Chicago’s ban on automatic weapons and concealed handguns, while in April a California court disagreed on the constitutional issue.
The differing opinions mean that the whole issue of city and state gun laws will probably head back to the Supreme Court for clarification, leading many legal experts to predict a further expansion of gun rights.
The new cases are fallout from last year’s Supreme Court case, District of Columbia v. Heller, which struck down parts of Washington’s gun control ordinance, the strictest in the country, and stated for the first time that the Second Amendment gives individuals a right to keep and bear arms for personal use. But the court declined to say whether the Second Amendment in general applies to state and local governments.
In January, the United States Court of Appeals for the Second Circuit, in New York, in a ruling joined by Judge Sonia Sotomayor, declined to apply the Second Amendment to a New York law that banned the martial arts device known as chukka sticks. The ban was allowed to stay in place.
Then in April, a three-judge panel of the Ninth Circuit, in San Francisco, ruled that the Second Amendment did apply to the states, even though it allowed a California county to ban guns on government property like state fairgrounds. That case, Nordyke v. King, is being considered for a rehearing by the full Ninth Circuit.
Those two conflicting cases set the stage for two other cases that were heard as one in the Seventh Circuit in Chicago, testing that city’s handgun ban. On June 2, a three-judge panel of the court, led by Chief Judge Frank H. Easterbrook, a well-known conservative, ruled that there was no basis for the court to apply the Second Amendment to the states. Such a decision, Judge Easterbrook wrote, should be made only by the Supreme Court, not at the appellate level.
The right of states to make their own decisions on such matters, Judge Easterbrook wrote, “is an older and more deeply rooted tradition than is a right to carry any particular kind of weapon.”
The lawyers for the plaintiffs, including the National Rifle Association, have asked the Supreme Court to take up the Chicago cases.
A split among the federal appeals circuits, especially on constitutional issues, invites Supreme Court action, said Adam Winkler, a law professor at the University of California, Los Angeles.
“Californians, Hawaiians and Oregonians have a Second Amendment right to bear arms, but New Yorkers, Illinoisans, and Wisconsinites don’t,” Professor Winkler said. “The Supreme Court will want to correct this sooner rather than later.”
The process of applying amendments of the Bill of Rights to the states, known as incorporation, began after the Civil War but had its heyday in the activist Supreme Court of the Earl Warren era. Much of the Bill of Rights, including the First Amendment’s freedom of speech and some rights of criminal defendants, have been applied to the states, but other elements have not, including the Seventh Amendment right to a civil jury trial and the Second Amendment.
Incorporation fell out of favor after the 1960s, but a new generation of largely liberal scholars of law and history have brought it back into the intellectual mainstream, said Akhil Reed Amar, a law professor at Yale University, who supports the process.
“The precedents are now supportive of incorporation of nearly every provision of the Bill of Rights,” Professor Amar said. “Now what’s odd is that the Second Amendment doesn’t apply to the states.”
Sanford Levinson, a law professor at the University of Texas, said he would be surprised if the Supreme Court accepted these gun cases, because some of the conservative justices on the court had scoffed at incorporation arguments in the past and might not want to set a precedent.
Professor Amar, however, argued that the justices would not only take up the case but would also ultimately vote for incorporation of the Second Amendment.
Even if the Second Amendment becomes the controlling law of every state and town, constitutional scholars say it is still unlikely that gun laws would be overturned wholesale. The Supreme Court’s Heller decision last year, notes Nelson Lund, a law professor at George Mason University, “clearly indicates that governments will still have wide latitude to regulate firearms.”
Even the Ninth Circuit in California, while applying the Second Amendment to the states, still upheld the gun ordinance that gave rise to the lawsuit.
Eugene Volokh, a law professor at the University of California, Los Angeles, said the view of the Ninth Circuit reflected what polls have said was, by and large, the view of the American people.
“There is a right to bear arms,” Professor Volokh said, “but it’s not absolute.”
Health Care Rationing Rhetoric Overlooks Reality
By DAVID LEONHARDT NY Times
Rationing.
More to the point: Rationing!
As in: Wait, are you talking about rationing medical care? Access to medical care is a fundamental right. And rationing sounds like something out of the Soviet Union. Or at least Canada.
The r-word has become a rejoinder to anyone who says that this country must reduce its runaway health spending, especially anyone who favors cutting back on treatments that don’t have scientific evidence behind them. You can expect to hear a lot more about rationing as health care becomes the dominant issue in Washington this summer.
Today, I want to try to explain why the case against rationing isn’t really a substantive argument. It’s a clever set of buzzwords that tries to hide the fact that societies must make choices.
In truth, rationing is an inescapable part of economic life. It is the process of allocating scarce resources. Even in the United States, the richest society in human history, we are constantly rationing. We ration spots in good public high schools. We ration lakefront homes. We ration the best cuts of steak and wild-caught salmon.
Health care, I realize, seems as if it should be different. But it isn’t. Already, we cannot afford every form of medical care that we might like. So we ration.
We spend billions of dollars on operations, tests and drugs that haven’t been proved to make people healthier. Yet we have not spent the money to install computerized medical records — and we suffer more medical errors than many other countries.
We underpay primary care doctors, relative to specialists, and they keep us stewing in waiting rooms while they try to see as many patients as possible. We don’t reimburse different specialists for time spent collaborating with one another, and many hard-to-diagnose conditions go untreated. We don’t pay nurses to counsel people on how to improve their diets or remember to take their pills, and manageable cases of diabetes and heart disease become fatal.
“Just because there isn’t some government agency specifically telling you which treatments you can have based on cost-effectiveness,” as Dr. Mark McClellan, head of Medicare in the Bush administration, says, “that doesn’t mean you aren’t getting some treatments.”
Milton Friedman’s beloved line is a good way to frame the issue: There is no such thing as a free lunch. The choice isn’t between rationing and not rationing. It’s between rationing well and rationing badly. Given that the United States devotes far more of its economy to health care than other rich countries, and gets worse results by many measures, it’s hard to argue that we are now rationing very rationally.
On Wednesday, a bipartisan panel led by four former Senate majority leaders — Howard Baker, Tom Daschle, Bob Dole and George Mitchell — will release a solid proposal for health care reform. Among other things, it would call on the federal government to do more research on which treatments actually work. An “independent health care council” would also be established, charged with helping the government avoid unnecessary health costs. The Obama administration supports a similar approach.
And connecting the dots is easy enough. Armed with better information, Medicare could pay more for effective treatments — and no longer pay quite so much for health care that doesn’t make people healthier.
Mr. Baker, Mr. Daschle, Mr. Dole and Mr. Mitchell: I accuse you of rationing.
•
There are three main ways that the health care system already imposes rationing on us. The first is the most counterintuitive, because it doesn’t involve denying medical care. It involves denying just about everything else.
The rapid rise in medical costs has put many employers in a tough spot. They have had to pay much higher insurance premiums, which have increased their labor costs. To make up for these increases, many have given meager pay raises.
This tradeoff is often explicit during contract negotiations between a company and a labor union. For nonunionized workers, the tradeoff tends to be invisible. It happens behind closed doors in the human resources department. But it still happens.
Research by Katherine Baicker and Amitabh Chandra of Harvard has found that, on average, a 10 percent increase in health premiums leads to a 2.3 percent decline in inflation-adjusted pay. Victor Fuchs, a Stanford economist, and Ezekiel Emanuel, an oncologist now in the Obama administration, published an article in The Journal of the American Medical Association last year that nicely captured the tradeoff. When health costs have grown fastest over the last two decades, they wrote, wages have grown slowest, and vice versa.
So when middle-class families complain about being stretched thin, they’re really complaining about rationing. Our expensive, inefficient health care system is eating up money that could otherwise pay for a mortgage, a car, a vacation or college tuition.
The second kind of rationing involves the uninsured. The high cost of care means that some employers can’t afford to offer health insurance and still pay a competitive wage. Those high costs mean that individuals can’t buy insurance on their own.
The uninsured still receive some health care, obviously. But they get less care, and worse care, than they need. The Institute of Medicine has estimated that 18,000 people died in 2000 because they lacked insurance. By 2006, the number had risen to 22,000, according to the Urban Institute.
The final form of rationing is the one I described near the beginning of this column: the failure to provide certain types of care, even to people with health insurance. Doctors are generally not paid to do the blocking and tackling of medicine: collaboration, probing conversations with patients, small steps that avoid medical errors. Many doctors still do such things, out of professional pride. But the full medical system doesn’t do nearly enough.
That’s rationing — and it has real consequences.
In Australia, 81 percent of primary care doctors have set up a way for their patients to get after-hours care, according to the Commonwealth Fund. In the United States, only 40 percent have. Over all, the survival rates for many diseases in this country are no better than they are in countries that spend far less on health care. People here are less likely to have long-term survival after colorectal cancer, childhood leukemia or a kidney transplant than they are in Canada — that bastion of rationing.
None of this means that reducing health costs will be easy. The comparative-effectiveness research favored by the former Senate majority leaders and the White House has inspired opposition from some doctors, members of Congress and patient groups. Certainly, the critics are right to demand that the research be done carefully. It should examine different forms of a disease and, ideally, various subpopulations who have the disease. Just as important, scientists — not political appointees or Congress — should be in charge of the research.
But flat-out opposition to comparative effectiveness is, in the end, opposition to making good choices. And all the noise about rationing is not really a courageous stand against less medical care. It’s a utopian stand against better medical care.
E-mail: Leonhardt@nytimes.com
Rationing.
More to the point: Rationing!
As in: Wait, are you talking about rationing medical care? Access to medical care is a fundamental right. And rationing sounds like something out of the Soviet Union. Or at least Canada.
The r-word has become a rejoinder to anyone who says that this country must reduce its runaway health spending, especially anyone who favors cutting back on treatments that don’t have scientific evidence behind them. You can expect to hear a lot more about rationing as health care becomes the dominant issue in Washington this summer.
Today, I want to try to explain why the case against rationing isn’t really a substantive argument. It’s a clever set of buzzwords that tries to hide the fact that societies must make choices.
In truth, rationing is an inescapable part of economic life. It is the process of allocating scarce resources. Even in the United States, the richest society in human history, we are constantly rationing. We ration spots in good public high schools. We ration lakefront homes. We ration the best cuts of steak and wild-caught salmon.
Health care, I realize, seems as if it should be different. But it isn’t. Already, we cannot afford every form of medical care that we might like. So we ration.
We spend billions of dollars on operations, tests and drugs that haven’t been proved to make people healthier. Yet we have not spent the money to install computerized medical records — and we suffer more medical errors than many other countries.
We underpay primary care doctors, relative to specialists, and they keep us stewing in waiting rooms while they try to see as many patients as possible. We don’t reimburse different specialists for time spent collaborating with one another, and many hard-to-diagnose conditions go untreated. We don’t pay nurses to counsel people on how to improve their diets or remember to take their pills, and manageable cases of diabetes and heart disease become fatal.
“Just because there isn’t some government agency specifically telling you which treatments you can have based on cost-effectiveness,” as Dr. Mark McClellan, head of Medicare in the Bush administration, says, “that doesn’t mean you aren’t getting some treatments.”
Milton Friedman’s beloved line is a good way to frame the issue: There is no such thing as a free lunch. The choice isn’t between rationing and not rationing. It’s between rationing well and rationing badly. Given that the United States devotes far more of its economy to health care than other rich countries, and gets worse results by many measures, it’s hard to argue that we are now rationing very rationally.
On Wednesday, a bipartisan panel led by four former Senate majority leaders — Howard Baker, Tom Daschle, Bob Dole and George Mitchell — will release a solid proposal for health care reform. Among other things, it would call on the federal government to do more research on which treatments actually work. An “independent health care council” would also be established, charged with helping the government avoid unnecessary health costs. The Obama administration supports a similar approach.
And connecting the dots is easy enough. Armed with better information, Medicare could pay more for effective treatments — and no longer pay quite so much for health care that doesn’t make people healthier.
Mr. Baker, Mr. Daschle, Mr. Dole and Mr. Mitchell: I accuse you of rationing.
•
There are three main ways that the health care system already imposes rationing on us. The first is the most counterintuitive, because it doesn’t involve denying medical care. It involves denying just about everything else.
The rapid rise in medical costs has put many employers in a tough spot. They have had to pay much higher insurance premiums, which have increased their labor costs. To make up for these increases, many have given meager pay raises.
This tradeoff is often explicit during contract negotiations between a company and a labor union. For nonunionized workers, the tradeoff tends to be invisible. It happens behind closed doors in the human resources department. But it still happens.
Research by Katherine Baicker and Amitabh Chandra of Harvard has found that, on average, a 10 percent increase in health premiums leads to a 2.3 percent decline in inflation-adjusted pay. Victor Fuchs, a Stanford economist, and Ezekiel Emanuel, an oncologist now in the Obama administration, published an article in The Journal of the American Medical Association last year that nicely captured the tradeoff. When health costs have grown fastest over the last two decades, they wrote, wages have grown slowest, and vice versa.
So when middle-class families complain about being stretched thin, they’re really complaining about rationing. Our expensive, inefficient health care system is eating up money that could otherwise pay for a mortgage, a car, a vacation or college tuition.
The second kind of rationing involves the uninsured. The high cost of care means that some employers can’t afford to offer health insurance and still pay a competitive wage. Those high costs mean that individuals can’t buy insurance on their own.
The uninsured still receive some health care, obviously. But they get less care, and worse care, than they need. The Institute of Medicine has estimated that 18,000 people died in 2000 because they lacked insurance. By 2006, the number had risen to 22,000, according to the Urban Institute.
The final form of rationing is the one I described near the beginning of this column: the failure to provide certain types of care, even to people with health insurance. Doctors are generally not paid to do the blocking and tackling of medicine: collaboration, probing conversations with patients, small steps that avoid medical errors. Many doctors still do such things, out of professional pride. But the full medical system doesn’t do nearly enough.
That’s rationing — and it has real consequences.
In Australia, 81 percent of primary care doctors have set up a way for their patients to get after-hours care, according to the Commonwealth Fund. In the United States, only 40 percent have. Over all, the survival rates for many diseases in this country are no better than they are in countries that spend far less on health care. People here are less likely to have long-term survival after colorectal cancer, childhood leukemia or a kidney transplant than they are in Canada — that bastion of rationing.
None of this means that reducing health costs will be easy. The comparative-effectiveness research favored by the former Senate majority leaders and the White House has inspired opposition from some doctors, members of Congress and patient groups. Certainly, the critics are right to demand that the research be done carefully. It should examine different forms of a disease and, ideally, various subpopulations who have the disease. Just as important, scientists — not political appointees or Congress — should be in charge of the research.
But flat-out opposition to comparative effectiveness is, in the end, opposition to making good choices. And all the noise about rationing is not really a courageous stand against less medical care. It’s a utopian stand against better medical care.
E-mail: Leonhardt@nytimes.com
Tuesday, June 16, 2009
Following the Money in the Health Care Debate
NY Times By REED ABELSON
Congress appears ready to confront one of the nation’s most contentious issues — health care reform — and arguments will fill the air in the coming months.
Much of the discussion so far has focused on President Obama’s proposal for a government-sponsored health plan that he says will reduce costs. Insurers and doctors argue it will limit patient choice. Drug companies warn that the quality of care could be compromised.
But Mr. Obama’s proposal is only one of many that await Congress as it wrestles with how to rein in exploding health care costs while taking care of the country’s nearly 50 million uninsured. The size and complexity of the issue are daunting. To help understand what’s going on, you need to follow the money.
Roughly $2.5 trillion is at stake, the amount the nation spends each year on health care, nearly a fifth of the American economy. How that money is divided up — or prevented from rising at its current pace — is at the center of the debate. Many doctors, insurance companies and drug companies say they fear that their revenues could shrink significantly and patient care could be threatened.
Their arguments may prove to have merit. But “people are voting with their own economic interests,” said Les Funtleyder, a Wall Street analyst who is following the debate closely for Miller Tabak & Co. in New York.
When you hear nothing from one of the interest groups on an issue that is part of the larger debate, you can assume the silence means it has no financial stake in the outcome, he said. “You wouldn’t probably weigh in if you don’t have any skin in the game because if you weigh in, it makes you more of a target,” Mr. Funtleyder said.
What all of the interest groups reliably support is any new program that would expand coverage to the uninsured. Such a program would translate into tens of millions of new, paying customers for hospitals, doctors, insurers and drug makers.
But what worries those groups is the accompanying talk in Washington about how to address the skyrocketing cost of health care, since any decline in spending would correspond to a reduction in revenues. The discussion has become particularly heated over exactly how the government will find the savings necessary to help generate the $1 trillion or so that the government will need over the next decade to pay for universal coverage. The nation’s doctors, for example, say they wholeheartedly support health care reform. But the American Medical Association has a long history of being opposed to legislation that threatens the status quo. It opposed the creation of Medicare more than 30 years ago.
What concerns doctors about a government-run insurance program that looks like Medicare is the possibility that it will pay like Medicare, said Robert Laszewski, a health policy consultant in Alexandria, Va. “Medicare pays doctors 80 percent of what an insurance company pays,” he said. “If you get a public plan, the doctors are going to get a 20 percent pay cut.”
But doctors are also likely to disagree among themselves over how different types of physicians should be compensated. Congress is thinking about raising the pay of primary-care doctors — general practitioners, family physicians and the like — as a way to encourage them to more actively oversee the care of patients and reduce expensive visits to specialists and hospitals.
The specialists — the cardiologists, neurologists, surgeons and others — may have a different take on the discussion, Mr. Laszewski noted, especially if Congress cannot raise salaries of primary-care doctors without taking money from the highly paid specialists. “The question is, how are you going to help the primary-care doctors without cutting the cardiologist and the other specialists?” he asked.
But even the family physicians, who stand to benefit the most, say they are opposed to a government-run plan if it reimburses them at the Medicare rate.
Another group with a lot to win or lose is the nation’s private health insurers. With the number of people who are privately insured through their employer or their own policy not increasing, insurers are eager to find a new source of business. Health reform promises them at least some new customers who cannot afford insurance now but who might receive government help to pay for coverage.
But the trade association, America’s Health Insurance Plans, has clearly staked out its opposition to any kind of government-run health plan, which it says would have an unfair advantage. The trade group fears its members would be driven out of business as the government uses its purchasing power to demand much lower prices from doctors and hospitals.
Karen Ignagni, the chief executive of the association, has criticized the government’s track record in running Medicare as a good reason not to expand government health insurance beyond the elderly and disabled. She says the program has done a poor job in taking care of people when they are very sick. “Medicare has not effectively coordinated care, addressed chronic illness, or encouraged high performance,” she recently told Congress.
As one way of finding savings to pay for health reform, Congress is also discussing lowering payments to private insurers who are now being compensated to cover some Medicare patients. The A.M.A., perhaps mindful that such savings would not come from doctors if it comes from insurers, says it supports such cuts.
The hospitals have also voiced concerns about a government-run plan. They, too, are paid much less by Medicare than they are by private insurers.
The nation’s drug makers are also lining up against a public plan, predicting that it would ultimately lead to a government takeover of the entire system. “I don’t think that American patients would — or should — accommodate themselves to the long waits for care, limited options and other forms of rationing that inevitably accompany government health care monopolies,” John C. Lechleiter, the chief executive of the drug maker Eli Lilly & Co., recently told a meeting of business leaders. “American doctors and patients need to retain the ability to make choices based on the real value of treatment options.”
But drug companies are also wary of the government’s pull in demanding lower prices for their products than the insurers they deal with today. “The more government intervention you have, the less payment you have,” said Mr. Funtleyder, the analyst.
These companies are also concerned that the government will play a greater role in determining the effectiveness of different drugs and medical devices and use that information to decide which should be covered and how much the government will pay for those products. Insurers, not surprisingly, support the government’s taking a harder line against drug and medical device makers so they don’t have to.
As Congress gets closer to finalizing any legislation, the opinions of the many stakeholders are likely to become more strident and self-interested, Mr. Laszewski predicted. As in watching the last lap of the Daytona 500, he said, there will be attempts by some of these groups to break out of the pack. “When you get the last lap, there are no friends — it’s me, me, me,” he said.
Congress appears ready to confront one of the nation’s most contentious issues — health care reform — and arguments will fill the air in the coming months.
Much of the discussion so far has focused on President Obama’s proposal for a government-sponsored health plan that he says will reduce costs. Insurers and doctors argue it will limit patient choice. Drug companies warn that the quality of care could be compromised.
But Mr. Obama’s proposal is only one of many that await Congress as it wrestles with how to rein in exploding health care costs while taking care of the country’s nearly 50 million uninsured. The size and complexity of the issue are daunting. To help understand what’s going on, you need to follow the money.
Roughly $2.5 trillion is at stake, the amount the nation spends each year on health care, nearly a fifth of the American economy. How that money is divided up — or prevented from rising at its current pace — is at the center of the debate. Many doctors, insurance companies and drug companies say they fear that their revenues could shrink significantly and patient care could be threatened.
Their arguments may prove to have merit. But “people are voting with their own economic interests,” said Les Funtleyder, a Wall Street analyst who is following the debate closely for Miller Tabak & Co. in New York.
When you hear nothing from one of the interest groups on an issue that is part of the larger debate, you can assume the silence means it has no financial stake in the outcome, he said. “You wouldn’t probably weigh in if you don’t have any skin in the game because if you weigh in, it makes you more of a target,” Mr. Funtleyder said.
What all of the interest groups reliably support is any new program that would expand coverage to the uninsured. Such a program would translate into tens of millions of new, paying customers for hospitals, doctors, insurers and drug makers.
But what worries those groups is the accompanying talk in Washington about how to address the skyrocketing cost of health care, since any decline in spending would correspond to a reduction in revenues. The discussion has become particularly heated over exactly how the government will find the savings necessary to help generate the $1 trillion or so that the government will need over the next decade to pay for universal coverage. The nation’s doctors, for example, say they wholeheartedly support health care reform. But the American Medical Association has a long history of being opposed to legislation that threatens the status quo. It opposed the creation of Medicare more than 30 years ago.
What concerns doctors about a government-run insurance program that looks like Medicare is the possibility that it will pay like Medicare, said Robert Laszewski, a health policy consultant in Alexandria, Va. “Medicare pays doctors 80 percent of what an insurance company pays,” he said. “If you get a public plan, the doctors are going to get a 20 percent pay cut.”
But doctors are also likely to disagree among themselves over how different types of physicians should be compensated. Congress is thinking about raising the pay of primary-care doctors — general practitioners, family physicians and the like — as a way to encourage them to more actively oversee the care of patients and reduce expensive visits to specialists and hospitals.
The specialists — the cardiologists, neurologists, surgeons and others — may have a different take on the discussion, Mr. Laszewski noted, especially if Congress cannot raise salaries of primary-care doctors without taking money from the highly paid specialists. “The question is, how are you going to help the primary-care doctors without cutting the cardiologist and the other specialists?” he asked.
But even the family physicians, who stand to benefit the most, say they are opposed to a government-run plan if it reimburses them at the Medicare rate.
Another group with a lot to win or lose is the nation’s private health insurers. With the number of people who are privately insured through their employer or their own policy not increasing, insurers are eager to find a new source of business. Health reform promises them at least some new customers who cannot afford insurance now but who might receive government help to pay for coverage.
But the trade association, America’s Health Insurance Plans, has clearly staked out its opposition to any kind of government-run health plan, which it says would have an unfair advantage. The trade group fears its members would be driven out of business as the government uses its purchasing power to demand much lower prices from doctors and hospitals.
Karen Ignagni, the chief executive of the association, has criticized the government’s track record in running Medicare as a good reason not to expand government health insurance beyond the elderly and disabled. She says the program has done a poor job in taking care of people when they are very sick. “Medicare has not effectively coordinated care, addressed chronic illness, or encouraged high performance,” she recently told Congress.
As one way of finding savings to pay for health reform, Congress is also discussing lowering payments to private insurers who are now being compensated to cover some Medicare patients. The A.M.A., perhaps mindful that such savings would not come from doctors if it comes from insurers, says it supports such cuts.
The hospitals have also voiced concerns about a government-run plan. They, too, are paid much less by Medicare than they are by private insurers.
The nation’s drug makers are also lining up against a public plan, predicting that it would ultimately lead to a government takeover of the entire system. “I don’t think that American patients would — or should — accommodate themselves to the long waits for care, limited options and other forms of rationing that inevitably accompany government health care monopolies,” John C. Lechleiter, the chief executive of the drug maker Eli Lilly & Co., recently told a meeting of business leaders. “American doctors and patients need to retain the ability to make choices based on the real value of treatment options.”
But drug companies are also wary of the government’s pull in demanding lower prices for their products than the insurers they deal with today. “The more government intervention you have, the less payment you have,” said Mr. Funtleyder, the analyst.
These companies are also concerned that the government will play a greater role in determining the effectiveness of different drugs and medical devices and use that information to decide which should be covered and how much the government will pay for those products. Insurers, not surprisingly, support the government’s taking a harder line against drug and medical device makers so they don’t have to.
As Congress gets closer to finalizing any legislation, the opinions of the many stakeholders are likely to become more strident and self-interested, Mr. Laszewski predicted. As in watching the last lap of the Daytona 500, he said, there will be attempts by some of these groups to break out of the pack. “When you get the last lap, there are no friends — it’s me, me, me,” he said.
Credit Bailout: Issuers Slashing Card Balances
NY TIMES By DAVID STREITFELD
The banks were bailed out last fall, the automobile companies last winter. For Edward McClelland, a writer in Chicago, deliverance finally arrived a few days ago.
Mr. McClelland’s credit card company was calling yet again, wondering when it could expect the next installment on his delinquent account. He proposed paying half of his $5,486 balance and calling the matter even.
It’s a deal, the account representative immediately said, not even bothering to check with a supervisor.
As they confront unprecedented numbers of troubled customers, credit card companies are increasingly doing something they have historically scorned: settling delinquent accounts for substantially less than the amount owed.
The practice started last fall as the economy worsened. But in recent months, with unemployment topping 9 percent and more people having trouble paying their bills, experts say this approach has risen drastically.
They say many credit card issuers have revised internal guidelines to give front-line employees the power to cut deals with consumers. The workers do not even have to wait for customers to call and ask for a break.
“Now it’s the card company calling you and saying, ‘Let’s talk turkey,’ ” said David Robertson, publisher of the credit industry journal The Nilson Report.
Only a few creditors are willing to confirm the practice. Bank of America and American Express say they decide on a case-by-case basis whether to accept less than the full balance. Other card companies refuse to discuss the subject, but their trade group, the American Bankers Association, acknowledges that settlements are becoming more common.
The shift comes as the financial services industry finds itself losing some of its legendary power. A credit card reform bill that makes it harder to raise rates on existing balances and prevents certain automatic fees flew through Congress and was signed by President Obama in late May.
Borrowers still have a crushing amount of debt to deal with, however.
Revolving credit, a close approximation of credit card debt, totaled $939.6 billion in March. The Federal Reserve reported that 6.5 percent of credit card debt was at least 30 days past due in the first quarter, the highest percentage since it began tracking the number in 1991. The amount being written off was also at peak levels.
After a balance has been delinquent for six months, regulations require the card company to reduce the value of the debt on its books to zero. If a borrower has not paid by this point, chances are he never will.
“The creditors would rather have a piece of something now instead of absolutely nothing down the road,” said Adam K. Levin, the founder of the consumer education Web site Credit.com.
Banks and credit card companies are discussing new programs that would, for the first time, allow credit counselors to invoke reductions of principal as a routine part of their strategy, said Jeffrey S. Tenenbaum, a lawyer for many counseling agencies. In the past, counselors could persuade card issuers to adjust interest rates and modify late fees, but the balance was untouchable.
An example of how quickly the card companies are shifting their approach is in the behavior of HSBC, a major issuer, toward Mr. McClelland.
He was paying fitfully on his card, which was canceled for delinquency. In April, HSBC offered him full settlement at 20 percent off. He declined. A few weeks later, it agreed to let him pay half.
Traditionally, the creditors could play tough with any accounts that became delinquent because the cardholders had assets. The creditors could sue or place a lien on a cardholder’s house.
As the recession grinds on, though, many cardholders have less to lose. Mr. McClelland, 42, is a renter. Since he is self-employed, he has no wages to garnish. But he did not want to feel like a deadbeat.
“Having this over and done with was appealing,” he said. He raised the agreed-upon $2,743 and sent it off electronically last week. He has spared himself the prospect of years of collection calls.
HSBC said it did not comment on individual cardholders and would not discuss its policy toward settlements. “Every customer situation is unique,” said a spokeswoman, Cindy Savio.
The card companies, perhaps understandably, do not want to promote the idea that settlements have become merely a matter of asking nicely. The creditors also point out that a delinquency, like a foreclosure, destroys a credit record.
And there can be a Catch-22: those with the fewest assets are the likeliest to receive a settlement offer, but they are also the least able to come up with the cash for that final negotiated payment. Some creditors, though, are helpfully letting people stretch this out over months.
Still, a line has been crossed, credit experts say.
“Even in the early stages of delinquency, settlements can be dramatic,” said Carmine Dorio, a longtime industry executive who ran collection departments for Citibank, Bank of America and Washington Mutual.
During the boom, nonpayers were treated more harshly because, paradoxically, their debt was more valuable. Collection agencies were eager to buy bundles of old debt from the card companies for as much as 15 cents on the dollar. In a healthy economy, even the hopelessly indebted can pay something.
In this recession, where collection agencies have little hope of collecting from the unemployed, that business model is suffering. Experts say 5 cents on the dollar is now the most a card company can hope to get for its past-due accounts.
Another factor undermining the card companies is the rise of debt settlement firms. These are profit-making companies that charge fees, nearly always in advance, to bargain with creditors on a consumer’s behalf.
Settlement companies are under fire from regulators, who say they promise much and deliver little. But their ubiquitous ads, which make a settlement seem not only easy but also a moral victory over shamelessly gouging card companies, have done much to spread the idea.
Although there are few independent statistics on the settlement industry, there is no doubt that some generous deals are being done.
Consider Bedros Alikcioglu, a gas station owner in Newport Beach, Calif. He owed $112,000 on four cards and was paying $3,000 a month in interest and late fees. “It was so hard to earn that money, and paying it to nowhere didn’t make sense anymore,” said Mr. Alikcioglu, 75.
He signed up with a debt settlement company named Hope Financial, which negotiated deals with his creditors to settle for about 35 percent of his balance. Hope Financial is charging Mr. Alikcioglu about 12 percent of his original debt.
“I did not want to leave the legacy of bankruptcy,” Mr. Alikcioglu said. “I am now at peace.”
The banks were bailed out last fall, the automobile companies last winter. For Edward McClelland, a writer in Chicago, deliverance finally arrived a few days ago.
Mr. McClelland’s credit card company was calling yet again, wondering when it could expect the next installment on his delinquent account. He proposed paying half of his $5,486 balance and calling the matter even.
It’s a deal, the account representative immediately said, not even bothering to check with a supervisor.
As they confront unprecedented numbers of troubled customers, credit card companies are increasingly doing something they have historically scorned: settling delinquent accounts for substantially less than the amount owed.
The practice started last fall as the economy worsened. But in recent months, with unemployment topping 9 percent and more people having trouble paying their bills, experts say this approach has risen drastically.
They say many credit card issuers have revised internal guidelines to give front-line employees the power to cut deals with consumers. The workers do not even have to wait for customers to call and ask for a break.
“Now it’s the card company calling you and saying, ‘Let’s talk turkey,’ ” said David Robertson, publisher of the credit industry journal The Nilson Report.
Only a few creditors are willing to confirm the practice. Bank of America and American Express say they decide on a case-by-case basis whether to accept less than the full balance. Other card companies refuse to discuss the subject, but their trade group, the American Bankers Association, acknowledges that settlements are becoming more common.
The shift comes as the financial services industry finds itself losing some of its legendary power. A credit card reform bill that makes it harder to raise rates on existing balances and prevents certain automatic fees flew through Congress and was signed by President Obama in late May.
Borrowers still have a crushing amount of debt to deal with, however.
Revolving credit, a close approximation of credit card debt, totaled $939.6 billion in March. The Federal Reserve reported that 6.5 percent of credit card debt was at least 30 days past due in the first quarter, the highest percentage since it began tracking the number in 1991. The amount being written off was also at peak levels.
After a balance has been delinquent for six months, regulations require the card company to reduce the value of the debt on its books to zero. If a borrower has not paid by this point, chances are he never will.
“The creditors would rather have a piece of something now instead of absolutely nothing down the road,” said Adam K. Levin, the founder of the consumer education Web site Credit.com.
Banks and credit card companies are discussing new programs that would, for the first time, allow credit counselors to invoke reductions of principal as a routine part of their strategy, said Jeffrey S. Tenenbaum, a lawyer for many counseling agencies. In the past, counselors could persuade card issuers to adjust interest rates and modify late fees, but the balance was untouchable.
An example of how quickly the card companies are shifting their approach is in the behavior of HSBC, a major issuer, toward Mr. McClelland.
He was paying fitfully on his card, which was canceled for delinquency. In April, HSBC offered him full settlement at 20 percent off. He declined. A few weeks later, it agreed to let him pay half.
Traditionally, the creditors could play tough with any accounts that became delinquent because the cardholders had assets. The creditors could sue or place a lien on a cardholder’s house.
As the recession grinds on, though, many cardholders have less to lose. Mr. McClelland, 42, is a renter. Since he is self-employed, he has no wages to garnish. But he did not want to feel like a deadbeat.
“Having this over and done with was appealing,” he said. He raised the agreed-upon $2,743 and sent it off electronically last week. He has spared himself the prospect of years of collection calls.
HSBC said it did not comment on individual cardholders and would not discuss its policy toward settlements. “Every customer situation is unique,” said a spokeswoman, Cindy Savio.
The card companies, perhaps understandably, do not want to promote the idea that settlements have become merely a matter of asking nicely. The creditors also point out that a delinquency, like a foreclosure, destroys a credit record.
And there can be a Catch-22: those with the fewest assets are the likeliest to receive a settlement offer, but they are also the least able to come up with the cash for that final negotiated payment. Some creditors, though, are helpfully letting people stretch this out over months.
Still, a line has been crossed, credit experts say.
“Even in the early stages of delinquency, settlements can be dramatic,” said Carmine Dorio, a longtime industry executive who ran collection departments for Citibank, Bank of America and Washington Mutual.
During the boom, nonpayers were treated more harshly because, paradoxically, their debt was more valuable. Collection agencies were eager to buy bundles of old debt from the card companies for as much as 15 cents on the dollar. In a healthy economy, even the hopelessly indebted can pay something.
In this recession, where collection agencies have little hope of collecting from the unemployed, that business model is suffering. Experts say 5 cents on the dollar is now the most a card company can hope to get for its past-due accounts.
Another factor undermining the card companies is the rise of debt settlement firms. These are profit-making companies that charge fees, nearly always in advance, to bargain with creditors on a consumer’s behalf.
Settlement companies are under fire from regulators, who say they promise much and deliver little. But their ubiquitous ads, which make a settlement seem not only easy but also a moral victory over shamelessly gouging card companies, have done much to spread the idea.
Although there are few independent statistics on the settlement industry, there is no doubt that some generous deals are being done.
Consider Bedros Alikcioglu, a gas station owner in Newport Beach, Calif. He owed $112,000 on four cards and was paying $3,000 a month in interest and late fees. “It was so hard to earn that money, and paying it to nowhere didn’t make sense anymore,” said Mr. Alikcioglu, 75.
He signed up with a debt settlement company named Hope Financial, which negotiated deals with his creditors to settle for about 35 percent of his balance. Hope Financial is charging Mr. Alikcioglu about 12 percent of his original debt.
“I did not want to leave the legacy of bankruptcy,” Mr. Alikcioglu said. “I am now at peace.”
Hart -- President Barack Obama
Hart --
Last year, millions of Americans came together for a great purpose.
Folks like you assembled a grassroots movement that shocked the political establishment and changed the course of our nation. When Washington insiders counted us out, we put it all on the line and changed our democracy from the bottom up. But that's not why we did it.
The pundits told us it was impossible -- that the donations working people could afford and the hours volunteers could give would never loosen the vise grip of big money and powerful special interests. We proved them wrong. But as important as that was, that's not why we did it.
Today, spiraling health care costs are pushing our families and businesses to the brink of ruin, while millions of Americans go without the care they desperately need. Fixing this broken system will be enormously difficult. But we can succeed. The chance to make fundamental change like this in people's daily lives -- that is why we did it.
The campaign to pass real health care reform in 2009 is the biggest test of our movement since the election. Once again, victory is far from certain. Our opposition will be fierce, and they have been down this road before. To prevail, we must once more build a coast-to-coast operation ready to knock on doors, deploy volunteers, get out the facts, and show the world how real change happens in America.
And just like before, I cannot do it without your support.
So I'm asking you to remember all that you gave over the last two years to get us here -- all the time, resources, and faith you invested as a down payment to earn us our place at this crossroads in history. All that you've done has led up to this -- and whether or not our country takes the next crucial step depends on what you do right now.
I know we can deliver.
Thank you, so much, for getting us this far. And thank you for standing up once again to take us the rest of the way.
Sincerely,
President Barack Obama
Last year, millions of Americans came together for a great purpose.
Folks like you assembled a grassroots movement that shocked the political establishment and changed the course of our nation. When Washington insiders counted us out, we put it all on the line and changed our democracy from the bottom up. But that's not why we did it.
The pundits told us it was impossible -- that the donations working people could afford and the hours volunteers could give would never loosen the vise grip of big money and powerful special interests. We proved them wrong. But as important as that was, that's not why we did it.
Today, spiraling health care costs are pushing our families and businesses to the brink of ruin, while millions of Americans go without the care they desperately need. Fixing this broken system will be enormously difficult. But we can succeed. The chance to make fundamental change like this in people's daily lives -- that is why we did it.
The campaign to pass real health care reform in 2009 is the biggest test of our movement since the election. Once again, victory is far from certain. Our opposition will be fierce, and they have been down this road before. To prevail, we must once more build a coast-to-coast operation ready to knock on doors, deploy volunteers, get out the facts, and show the world how real change happens in America.
And just like before, I cannot do it without your support.
So I'm asking you to remember all that you gave over the last two years to get us here -- all the time, resources, and faith you invested as a down payment to earn us our place at this crossroads in history. All that you've done has led up to this -- and whether or not our country takes the next crucial step depends on what you do right now.
I know we can deliver.
Thank you, so much, for getting us this far. And thank you for standing up once again to take us the rest of the way.
Sincerely,
President Barack Obama
Monday, June 15, 2009
For immigrants, living the dream is getting tougher
By Judy Keen, USA TODAY
CHICAGO — Raudel Sanchez's American dream was so strong that he tied a few possessions around his waist in 1967 and swam across the Rio Grande into Texas.
"I wanted to make a better life in America," says Sanchez, 63. "My dream was bringing my family here and working together."
Sanchez, now a U.S. citizen, joined a brother in Chicago after crossing the border near Laredo, Texas. He worked as a butcher, making $1.85 an hour, and took a second job at a candy factory. He often worked 14 hours a day. He saved his earnings and eventually brought his wife, siblings and parents — who are now in their 90s — to Chicago.
Eventually, he opened several small businesses and built a comfortable life for himself and his family. But now, the recession has hit him hard. He has sold one of his three clothing stores and a restaurant, resulting in layoffs of several immigrant workers. He's considering selling a second store.
Sanchez's story reflects how immigrant-owned businesses — a key part of the U.S. economy — are being threatened by the recession. About 1.5 million immigrants own U.S. businesses, according to a study for the Small Business Administration by Rob Fairlie, an economics professor at the University of California-Santa Cruz. He found that immigrants are 30% more likely to start a business than non-immigrants. They account for 11.6% of all U.S. business income.
Many immigrants started with nothing and built businesses that support them and their extended families and communities.
They epitomize the American dream: Work hard and you can build a good life.
With customers spending less and banks less willing to loan money, some immigrant entrepreneurs are wondering whether that's still true.
A few years after arriving here, Sanchez bought a foreclosed house, then three more. He sold two of them in 1985 and used the money to open Sanchez Bros. Western Wear, a clothing store. He expanded to two more stores in the suburbs, bought a restaurant and started a record label for Mexican music.
He tried to run his businesses cautiously: He paid cash for merchandise and didn't use his line of credit at the bank. When people stopped buying $1,000 cowboy boots, he stocked $400 pairs.
Now they aren't selling, even on sale. "Every year we've seen a decline" in sales, he says.
Besides selling two of his businesses, Sanchez has stopped advertising. He laid off most employees, and now family members are behind the counters.
The record label is down to its last two acts. "I had a meeting with my family and told them we've got to work more and more hard," he says.
Sanchez believes his seven children and nine grandchildren will build successful lives here. He's sure the economy will rebound.
"Maybe next year," he says. Still, he's wondering about his future at a time when he should be planning retirement.
"I still believe in this dream I had many years ago," he says. "The only thing is, you have to work hard."
'We just couldn't hang on'
Niall Freyne's dream was snatched away by the recession.
Freyne, an Irish immigrant, closed Galway Tribes Irish Pub last month after lunch and weeknight business dwindled along with his customers' confidence in the economy.
"We just couldn't hang on," says Freyne, 43, who opened the restaurant in 2005 in suburban Frankfort, Ill."We've already lost so much: all of our life savings, all of the equity in our home."
Freyne wrote a letter to President Obama asking why small businesses like his can't get a federal bailout — he says he got no reply — and he held out hope until the last minute that some generous millionaire would rescue him. That didn't happen either, and now Freyne isn't sure how he'll support his wife, Dorothy, and son James, who is 6, or what will become of his 42 employees.
"I feel like I've let everybody down," he says. "I can't control the economy, and that's what killed me."
People who leave their countries to pursue success in the USA often are risk-takers who are optimistic and willing to work especially hard to build successful futures for their children and grandchildren, says Allert Brown-Gort, associate director of the Institute for Latino Studies at the University of Notre Dame.
In difficult economic times, "immigrants are much more likely to battle it out for longer," he says, in part because they realize that "success or failure is really on them, and this is going to have an effect for generations to come."
Because immigrant business owners — particularly those who operate stores or restaurants — often depend on their own communities, they can be "more vulnerable in these downturns," says Gregory DeFreitas, an economist at Hofstra University.
For the same reason, recovery will come more slowly to immigrant businesses, he says.
Entire family invested
Susan Patel inherited her American dream from her father, Tulsi, and uncle Mafat, immigrants from India who founded Patel Brothers, a national chain of 41 Indian grocery stores.
Last year, Susan Patel bought Patel Brothers Handicrafts & Utensils, a small Chicago shop that sells kitchen items and Hindu statues and temples, from her father. Since then, she has watched several of the Indian and Pakistani businesses that line Devon Avenue close and stopped paying herself a salary to avoid laying off her two employees.
"We've all had to adjust," says Patel, 33, but she's confident she can survive the recession. She feels obliged to keep her store open to help the neighborhood get through the recession. "If I close, customers may not come to this area at all," she says.
Patel's uncle came here from Bhandu, a rural Indian village, in the late 1960s. Her parents, Tulsi and Aruna, followed in 1971. Everyone shared a house, and Patel's parents worked in factories.
"They saved their money so they could have the American dream," she says. In 1974, they bought a small grocery. More relatives emigrated from India to join the growing throng in the Patel home, Patel says, and more stores and a line of Indian food followed. The family bought restaurants, travel agencies and real-estate companies, and the two brothers' children work in them.
Patel believes immigrant-owned businesses are more likely to make it through the recession because owners often invest their life savings — and their lives — in them. "Everyone works all the time," she says. "At the dinner table, all we talked about was business. It's all we knew."
Patel's goals are identical to those that led her parents to risk everything and come here: "just to make it, to be a success."
Confident in the economy
It will take more than a recession to threaten the dreams of many immigrant business owners who left their homelands because of political turmoil.
Christos Koskiniotis, 46, and his mother, Panayiota Koskiniotis, 67, own Four Seasons Cleaners. They came here in the 1970s from Greece after government coups forced his late father to close the cafes he owned.
The dry-cleaning business is stable for now, Christos Koskiniotis says. His mom is unfazed because she's "seen everything in her life," he says.
Their confidence in their plan for a better life in the USA is unwavering. "For the long term, this is the best place to be," he says. "You're going to hit rough spots no matter where you're at. … I don't think the American dream is ever going to die. To think that would be like giving up on hope."
Dana Kapacinskas, 48, moved here from Kounas, Lithuania, in 1979, during the country's occupation by the Soviet Union. The dream that propelled her family was simple: "Freedom. At that time in the Soviet Union, you couldn't move, you couldn't go anywhere. They would follow you," she says.
The family started a bakery/deli here that grew over time. Racine Bakery now has more than 25 employees and distributes its baked goods to area supermarkets. Business hasn't been affected much by the recession, Kapacinskas says, "maybe because it's comfort food. … People still have to eat."
Things are going well enough that the bakery donates food to area churches, schools and non-profit groups. Kapacinskas says she, her parents and brother were motivated to improve their lives and demonstrate to people in their new country that they were willing to work hard.
"I was very eager and I had good work ethic and I saw the opportunities," she says. "We left our friends and missed our family, but the freedom and the opportunities were unlimited."
That's what Freyne thought, too. He opened Galway Tribes after working at hotels and restaurants in Ireland and the USA. He bought the land and built the place, furnishing it with items imported from Ireland.
"We were making it. We were fine, and then about a year ago the economy started going down a bit and people stopped coming out during the week," Freyne says. Then a new assessment a few months ago pushed his property taxes beyond what he could afford. "We just couldn't survive on weekends alone," he says.
Freyne wants to believe that his American dream can somehow be revived when the economy improves.
"You can't know when that will happen," he says. "I put my blood, sweat and tears in this place. It's a sad story."
CHICAGO — Raudel Sanchez's American dream was so strong that he tied a few possessions around his waist in 1967 and swam across the Rio Grande into Texas.
"I wanted to make a better life in America," says Sanchez, 63. "My dream was bringing my family here and working together."
Sanchez, now a U.S. citizen, joined a brother in Chicago after crossing the border near Laredo, Texas. He worked as a butcher, making $1.85 an hour, and took a second job at a candy factory. He often worked 14 hours a day. He saved his earnings and eventually brought his wife, siblings and parents — who are now in their 90s — to Chicago.
Eventually, he opened several small businesses and built a comfortable life for himself and his family. But now, the recession has hit him hard. He has sold one of his three clothing stores and a restaurant, resulting in layoffs of several immigrant workers. He's considering selling a second store.
Sanchez's story reflects how immigrant-owned businesses — a key part of the U.S. economy — are being threatened by the recession. About 1.5 million immigrants own U.S. businesses, according to a study for the Small Business Administration by Rob Fairlie, an economics professor at the University of California-Santa Cruz. He found that immigrants are 30% more likely to start a business than non-immigrants. They account for 11.6% of all U.S. business income.
Many immigrants started with nothing and built businesses that support them and their extended families and communities.
They epitomize the American dream: Work hard and you can build a good life.
With customers spending less and banks less willing to loan money, some immigrant entrepreneurs are wondering whether that's still true.
A few years after arriving here, Sanchez bought a foreclosed house, then three more. He sold two of them in 1985 and used the money to open Sanchez Bros. Western Wear, a clothing store. He expanded to two more stores in the suburbs, bought a restaurant and started a record label for Mexican music.
He tried to run his businesses cautiously: He paid cash for merchandise and didn't use his line of credit at the bank. When people stopped buying $1,000 cowboy boots, he stocked $400 pairs.
Now they aren't selling, even on sale. "Every year we've seen a decline" in sales, he says.
Besides selling two of his businesses, Sanchez has stopped advertising. He laid off most employees, and now family members are behind the counters.
The record label is down to its last two acts. "I had a meeting with my family and told them we've got to work more and more hard," he says.
Sanchez believes his seven children and nine grandchildren will build successful lives here. He's sure the economy will rebound.
"Maybe next year," he says. Still, he's wondering about his future at a time when he should be planning retirement.
"I still believe in this dream I had many years ago," he says. "The only thing is, you have to work hard."
'We just couldn't hang on'
Niall Freyne's dream was snatched away by the recession.
Freyne, an Irish immigrant, closed Galway Tribes Irish Pub last month after lunch and weeknight business dwindled along with his customers' confidence in the economy.
"We just couldn't hang on," says Freyne, 43, who opened the restaurant in 2005 in suburban Frankfort, Ill."We've already lost so much: all of our life savings, all of the equity in our home."
Freyne wrote a letter to President Obama asking why small businesses like his can't get a federal bailout — he says he got no reply — and he held out hope until the last minute that some generous millionaire would rescue him. That didn't happen either, and now Freyne isn't sure how he'll support his wife, Dorothy, and son James, who is 6, or what will become of his 42 employees.
"I feel like I've let everybody down," he says. "I can't control the economy, and that's what killed me."
People who leave their countries to pursue success in the USA often are risk-takers who are optimistic and willing to work especially hard to build successful futures for their children and grandchildren, says Allert Brown-Gort, associate director of the Institute for Latino Studies at the University of Notre Dame.
In difficult economic times, "immigrants are much more likely to battle it out for longer," he says, in part because they realize that "success or failure is really on them, and this is going to have an effect for generations to come."
Because immigrant business owners — particularly those who operate stores or restaurants — often depend on their own communities, they can be "more vulnerable in these downturns," says Gregory DeFreitas, an economist at Hofstra University.
For the same reason, recovery will come more slowly to immigrant businesses, he says.
Entire family invested
Susan Patel inherited her American dream from her father, Tulsi, and uncle Mafat, immigrants from India who founded Patel Brothers, a national chain of 41 Indian grocery stores.
Last year, Susan Patel bought Patel Brothers Handicrafts & Utensils, a small Chicago shop that sells kitchen items and Hindu statues and temples, from her father. Since then, she has watched several of the Indian and Pakistani businesses that line Devon Avenue close and stopped paying herself a salary to avoid laying off her two employees.
"We've all had to adjust," says Patel, 33, but she's confident she can survive the recession. She feels obliged to keep her store open to help the neighborhood get through the recession. "If I close, customers may not come to this area at all," she says.
Patel's uncle came here from Bhandu, a rural Indian village, in the late 1960s. Her parents, Tulsi and Aruna, followed in 1971. Everyone shared a house, and Patel's parents worked in factories.
"They saved their money so they could have the American dream," she says. In 1974, they bought a small grocery. More relatives emigrated from India to join the growing throng in the Patel home, Patel says, and more stores and a line of Indian food followed. The family bought restaurants, travel agencies and real-estate companies, and the two brothers' children work in them.
Patel believes immigrant-owned businesses are more likely to make it through the recession because owners often invest their life savings — and their lives — in them. "Everyone works all the time," she says. "At the dinner table, all we talked about was business. It's all we knew."
Patel's goals are identical to those that led her parents to risk everything and come here: "just to make it, to be a success."
Confident in the economy
It will take more than a recession to threaten the dreams of many immigrant business owners who left their homelands because of political turmoil.
Christos Koskiniotis, 46, and his mother, Panayiota Koskiniotis, 67, own Four Seasons Cleaners. They came here in the 1970s from Greece after government coups forced his late father to close the cafes he owned.
The dry-cleaning business is stable for now, Christos Koskiniotis says. His mom is unfazed because she's "seen everything in her life," he says.
Their confidence in their plan for a better life in the USA is unwavering. "For the long term, this is the best place to be," he says. "You're going to hit rough spots no matter where you're at. … I don't think the American dream is ever going to die. To think that would be like giving up on hope."
Dana Kapacinskas, 48, moved here from Kounas, Lithuania, in 1979, during the country's occupation by the Soviet Union. The dream that propelled her family was simple: "Freedom. At that time in the Soviet Union, you couldn't move, you couldn't go anywhere. They would follow you," she says.
The family started a bakery/deli here that grew over time. Racine Bakery now has more than 25 employees and distributes its baked goods to area supermarkets. Business hasn't been affected much by the recession, Kapacinskas says, "maybe because it's comfort food. … People still have to eat."
Things are going well enough that the bakery donates food to area churches, schools and non-profit groups. Kapacinskas says she, her parents and brother were motivated to improve their lives and demonstrate to people in their new country that they were willing to work hard.
"I was very eager and I had good work ethic and I saw the opportunities," she says. "We left our friends and missed our family, but the freedom and the opportunities were unlimited."
That's what Freyne thought, too. He opened Galway Tribes after working at hotels and restaurants in Ireland and the USA. He bought the land and built the place, furnishing it with items imported from Ireland.
"We were making it. We were fine, and then about a year ago the economy started going down a bit and people stopped coming out during the week," Freyne says. Then a new assessment a few months ago pushed his property taxes beyond what he could afford. "We just couldn't survive on weekends alone," he says.
Freyne wants to believe that his American dream can somehow be revived when the economy improves.
"You can't know when that will happen," he says. "I put my blood, sweat and tears in this place. It's a sad story."
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