The budget-slashing hysteria’s latest victim: legal aid for the poor

Published July 12, 2011, with Mother Jones.

Legal assistance for the poor will take a huge hit under a proposal just released by the House Appropriations Committee, which aims to slash the budget of the Legal Services Corporation back to 1999 levels. Officials at LSC, which has been around for four decades and supports 136 independent legal-aid outposts all over America, knew big cuts were coming—the program was by no means exempt from DC’s budget-slashing hysteria. But supporters were betting on losing $70 million, the figure proposed last year during budget negotiations.

The new proposal would take away $104 million—26 percent of the program’s resources—at a time when demand is soaring. Legal-aid offices from Texas to Maine report that the need for their services already has been outstripping funding for years.

“Demand is just going to keep going up. People are still losing their jobs. People are still struggling to put food on the table. Foreclosures are still happening,” says Cynthia Martinez, spokeswoman for Texas RioGrande Legal Aid, the state’s largest legal-services agency. “Last year, we had to turn away half of the people that came to us because we just don’t have the resources. And it’s not like when we say no, the legal problems just go away.”

You’ll hear similar stories nationwide. “We know that in February we were only able to handle about 20 percent of the calls that were actually tracked on our voicemail system, in one office location,” said Nan Heald, executive director of Pine Tree Legal Assistance, Maine’s largest legal-services provider. “And a lot of people don’t even get through on the phones because they’re busy.”

More of those who do get through, Heald says, “are getting limited service rather than full representation, because we’re trying to manage the demand with reduced staff.” She has lost seven staffers since 2009. It’s not just the federal cuts that are hurting these agencies. “We get foundations, we get individual donations, state grants, state funding. All of our funding sources are dropping,” Heald adds.

In Texas, a bill providing $20 million for legal services was passed only after a major fight in the state legislature, and Gov. Rick Perry has yet to sign it. In Florida, renowned for its “rocket-docket” foreclosure courts, Gov. Rick Scott vetoed a bill providing $1 million in funding for legal aid, despite broad bipartisan support.

Another key funding source for legal services comes through interest on lawyers’ trust accounts. When a lawyer wins a cash settlement for a client, the money often goes into a pooled account before it’s paid out. The interest on that money is used to support civil legal services. But with interest rates plummeting, that revenue source has also been gutted.

Already, the legal-aid nonprofits supported by the LSC are slated to lose a total of 445 staff members, including 200 lawyers, by the end of 2011, according to a survey of the groups. Last year, 63 million people—an all-time high—qualified for their help, an increase of 11 percent from the year before. “This is not the time to undercut the fundamental American commitment to equal justice for all,” says Legal Services president James Sandman.

“There is never a convenient time to make tough decisions,” counters Frank Wolf, chair of the House subcommittee responsible for the LSC’s budget. “But the longer we put off fixing the problem, the worse the medicine will be…The bill represents our best take on matching needs with scarce resources.”

Heald says she understands the need to cut spending, but explains that legal services has a “preventive effect” that actually saves money for the states. Housing a family in a homeless shelter in Maine for just two or three weeks is five to ten times more expensive than supporting a lawyer who can help keep the family in stable housing, she says. “And that’s just the cost of the shelter nights, and not the cost on all the other supportive systems a family might need.”

“I think it’s important to have the full picture, and not to see just part of it,” she adds.

For now, the hopes of the legal aid community hinge on the Senate. “We’re hopeful that things will continue to be okay, and we’re not going to face these major cuts,” said Linda Perle, director of legal services at the DC-based Center for Law and Social Policy. “But that might just be wishful thinking.”

If the proposed cuts do take effect, the LSC estimates that 235,000 people eligible for help will be turned away. And that will have a direct impact on vulnerable Americans, Rodriguez says.

“It means that more people won’t have the support they need,” she says, “to assert their rights in desperate situations.”

Foreclosure crisis + legal aid cuts = @#$%!

Published February 14, 2011 with Mother Jones.

Marilyn Hopper learned the hard way what happens to people who can’t afford a lawyer.

Back in 2009, Hopper, a diminutive, pleasant, 57-year-old from Detroit, was sued by a company called Midland Funding over a $1,700 credit card debt, which grew to $2,400 with fees and interest. She missed the initial court hearing at Michigan’s 36th District Court, and in her absence, the judge gave the company permission to take $700 a month from her paycheck.

That got her attention pretty fast. When she showed up in court this past November to contest the judgment, she explained that the hearing notice had been delivered to her old address — a home she’d lost to foreclosure. Over the objections of Midland’s pink-suited young attorney, Hopper convinced the judge to reduce the garnishment from her paycheck to $200 a month, but the company’s past withdrawals had left her nearly destitute. “I was subjected to undue hardship because they were taking such a large chunk,” she told me. When I asked whether she’d considered hiring a lawyer, Hopper sighed. “Most of them want $4,000 up front, and who has $4,000 lying around?”

Thanks to a landmark 1963 Supreme Court ruling, criminal courts must assign a lawyer to any defendant who can’t afford one. But there’s no such safety net for the hundreds of thousands of cash-strapped Americans who, like Hopper, find themselves embroiled in civil litigation, from employment and custody battles to foreclosures and bankruptcies — cases that often have serious consequences. “You’re not going to go to jail, but you may lose your home, you may lose your kids, you may lose your job,” says Linda Perle, director of legal services at the Center for Law and Social Policy in Washington, D.C. “There’s very important interests at stake.”

Traditionally, people with little money could turn to Legal Services Corporation (LSC), the federally mandated nonprofit that supports free legal-aid programs in hundreds of communities. But over the past few years, a perfect storm of conservative pushback, stagnant budgets and recessionary demand for legal services has left those who can least afford it fending for themselves against the financial behemoths.


The corporation lawyers “are here every day, and they pretty much bank on people not showing up, or not having an attorney to represent them,” says Alison Folmar, a Detroit lawyer who spends much of her time in the 36th District Court, defending everyday clients in anything from traffic disputes to domestic-violence cases. “The playing fields are not even.”

The courts, too, are reeling from having more and more people show up as their own lawyers. Unfamiliar with the process, these solo flyers require considerable hand-holding from judges and bailiffs who are dealing with overstuffed dockets. Nearly 80 percent of judges in a 2010 American Bar Association survey (pdf) said that pro se litigants have a negative effect, primarily by bogging things down. “The amount of time that gets spent to assist a self-represented person through any kind of litigation really expands for court staff, as well as for judicial hearing time,” says Lorraine Weber, director of access and fairness for the Michigan Supreme Court.

Numbers are hard to come by, but what little research that exists on the topic supports the notion that going it alone is a losing proposition. Tenants represented by lawyers, for instance, were three to 19 times more likely to beat their landlords in eviction cases. And a study of women seeking restraining orders found that 83 percent of those with lawyers secured an order while only 32 percent of those without lawyers prevailed.

I witnessed this disparity firsthand one morning in one of the 36th District’s windowless, linoleum-floored courtrooms. Judge Roberta Archer presided over two foreclosure cases, three eviction cases and three debt-collection cases, and only one of the defendants had a lawyer in tow. He was the only defendant who didn’t lose his case. “For some people, it makes a world of difference,” says Archer’s colleague, Judge Katherine Hansen. “Some people have a defense, but they don’t really know how to put the words to a defense.”

An unschooled defendant would certainly have a tough time explaining flawed mortgage paperwork to a judge — if the defendant even makes it that far. In Michigan and 26 other states, foreclosures seldom go to court without a proactive move by the borrower’s lawyer. In Michigan, most foreclosures are conducted “by advertisement” — the bank runs a legal notice in a local newspaper for four weeks stating its intent and then initiates a sheriff’s sale. A homeowner’s day in court is by no means guaranteed.

Nor, of course, is a lawyer. To qualify for free legal aid, a family must earn no more than 125 percent of the poverty threshold — about $27,500 for a family of four. That’s not much, to be sure, but more and more people have been qualifying. In 2009, the most recent year for which numbers are available, nearly 44 million Americans were living in poverty, up from about 40 million in 2008. “There are only about 180 legal aid lawyers for the state of Michigan,” says Linda Rexer, executive director of the Michigan State Bar Foundation, which funds legal aid grants. “Now, in Michigan, a third of our 10 million population would qualify for legal aid.” That’s about 18,500 potential clients per legal aid lawyer.

Initiatives only make a dent in swelling need

Across the nation, pro bono and legal aid lawyers have been facing a crisis of numbers. In 2009, the 136 independent legal aid groups backed by Legal Services Corporation saw a dramatic rise in recession-related cases: Their collective foreclosure caseload more than doubled from the previous year, and cases involving unemployment compensation jumped by 63 percent, according to the LSC’s annual report (pdf). This explosion of demand has forced grantees to turn away half of the people who come to them with eligible cases.

These numbers, of course, only take into account people who step up and ask for help. Many never make the phone call to legal aid in the first place, or give up when their calls go unanswered by harried local staff. “Program after program will tell you, they are just flooded with new need,” says Rebekah Diller, deputy director of the justice program at the Brennan Center for Justice at New York University School of Law.

Last June, the Brennan Center reported some striking local stats. One office in Orange County, California, reported a 337 percent jump in requests for foreclosure help. In Las Vegas, where 1 in every 76 housing units had a foreclosure filing in December — more than 43,000 homes — there were fewer than 10 legal aid lawyers for the entire city. According to the Oregon state bar, requests for help in landlord-tenant cases had more than tripled. And Cleveland’s Legal Aid Society reported a 56 percent increase in employment-related cases. The list goes on.

The crisis in civil representation hasn’t gone unnoticed. In 2008, as foreclosures slammed the state, Maryland’s Pro Bono Resource Center launched a program to train pro bono lawyers in foreclosure prevention and defense. Last March, the Justice Department launched an initiative called Access to Justice, aimed at improving indigent defense in civil and criminal cases.

Other states are looking at recruiting retired lawyers and allowing them to represent low-income clients. And Michigan is building an online resource for people who plan to represent themselves in court — similar to websites launched in Illinois, Wisconsin and elsewhere. “There are some problems that can be effectively resolved with self-help,” explains Rexer of the Michigan State Bar Foundation, who is spearheading the effort. “There are other problems that require full representation and the help of a lawyer.”

But none of these initiatives are likely to make much of a dent in meeting the legal needs of the poor. That would require more money, and state lawmakers are loath to pass laws guaranteeing people a lawyer in civil cases — a budget-busting proposition for deficit-plagued governments.

At the federal level, the GOP’s resurgence has made matters worse. Prior to the midterm elections, congressional lawmakers were mulling the Civil Access to Justice Act, which would loosen restrictions on groups receiving money from the LSC. The changes would once again let legal aid lawyers file class-action lawsuits and engage in policy advocacy — both of which are now forbidden — allowing them to bundle together cases against unscrupulous lenders, for instance, and alert elected officials to emerging problems.

But the act didn’t make it out of committee before the November elections. “That thing is kind of dead in the water at this point,” says Ken Boehm, chairman of the National Legal and Policy Center, which opposes the changes.

Earlier this month, the House unveiled its latest appropriations bill, which would slash the LSC’s budget by another 18 percent. (The corporation had asked for a 23 percent increase to keep pace with the overwhelming demand for its services.) The House conservative caucus, meanwhile, aims to do away with the LSC entirely as part of its Spending Reduction Act of 2011 — “a $2.5 trillion head start in the race to resolve the growing debt crisis and preserve the American Dream.”

The upshot, says the Brennan Center’s Diller, is that most low-income people are basically stuck with two choices when they are faced with foreclosures, evictions, debt collections, custody battles or employment-related problems. “You give up and you don’t even show up in court,” she says. “Or you try to go it alone.”

The GOP plot to destroy legal aid

Published February 14, 2011 with Mother Jones.

Last month, when the House conservative caucus proposed scrapping a program that has provided the poor with free legal assistance for nearly four decades, it felt like déjà-vu. Indeed, this provision of the GOP’s Spending Reduction Act of 2011 was simply the latest salvo against an entity under siege by conservatives since the day it was conceived.

Legal Services Corporation (LSC) is a federally funded nonprofit that doles out money ($420 million this year) to 136 independent groups providing legal services in hundreds of communities around the nation. Debt collectors knocking down your door? Foreclosure mill trying to take your house? If you can’t afford a lawyer and your family is hovering near the federal poverty line, then the LSC is your ticket to legal representation.

If you’re lucky, that is. The corporation’s budget has always been limited, and over the past few years, as more and more Americans grapple with civil cases involving employment, foreclosures, debt collections and bankruptcy, soaring demand for legal help has overwhelmed the LSC’s limited resources.

But the current crisis in the civil courts isn’t a product of the Great Recession. It’s the natural consequence of a decades-long campaign by agricultural interests, Christian conservatives and their congressional allies who would prefer to do away with the LSC altogether.

Publicly funded legal aid got its start under the Johnson administration, which recognized that lawyers for the poor were a key element of its war on poverty. In 1964, Congress passed the Economic Opportunity Act, and beginning the next year, with the government’s help, nonprofits began providing free community legal services, assisting broke clients with life’s mundane issues — eviction and custody battles and so forth. With their challenges to public housing programs and school districts, legal aid lawyers antagonized politicians, but they were enormously popular among their clients. When the Nixon administration began dismantling Johnson’s Office of Economic Opportunity, legal services survived. In 1974, Congress passed legislation creating the Legal Services Corporation, which President Nixon signed into law days before his resignation.

Among the LSC’s early opponents was the American Farm Bureau Federation, whose members were rankled by lawsuits filed on behalf of agricultural workers, many of them immigrants, in cases involving unpaid wages and poor working conditions. The bureau argued that these cases were often frivolous matters and that underpayment of wages was usually unintentional. In 1995, bureau lobbyist Bryan Little assailed the LSC as a “money-making machine” for the American Bar Association.

Legal aid faced another formidable foe in the Christian Coalition and Ralph Reed, then its executive director, who claimed the LSC “subsidizes divorce and illegitimacy.” The coalition’s 1994 Contract With the American Family sought the complete defunding of the LSC, alongside platform planks on “Restoring Respect for Human Life” and “Restoring Religious Equality.”

The following year, with Newt Gingrich installed as speaker of the House, congressional Republicans heeded the call with a proposal to phase out the LSC’s funding over three years. Among the program’s most vocal critics were Sen. Phil Gramm of Texas, whose spokesman called it “less an instrument for the delivery of legal services than a machine with a Democratic political agenda as its primary purpose.” Indiana Congressman Dan Burton was among a group of House Republicans putting out a weekly “LSC Hall of Shame” newsletter. “Legal services,” his spokesman argued, “wastes taxpayer dollars by spending millions on outlandish test cases.” GOP Congressman Robert Dornan of California called for abolishing the LSC entirely, adding that “it’s time to defund the left.”

In 1996, Congress struck a compromise. The LSC could continue to exist, but its budget would be slashed by one-third, and crippling restrictions would be imposed on its network of lawyers. By this time, the LSC had been under attack for more than two decades and had managed to stay afloat despite dwindling funding — adjusted for inflation, its budget peaked back in 1981 and has been shrinking ever since. “Congress didn’t want to cut it entirely, but they didn’t want to give them a blank check for all these controversial cases,” says Ken Boehm, chair of the National Legal and Policy Center and a longtime LSC critic. “So they decided to cut the baby.”

The new restrictions meant that LSC-funded lawyers could no longer represent prisoners or most immigrants — legal and undocumented alike. They also were barred from collecting court-awarded attorney’s fees (a restriction rescinded in 2009), from engaging in any sort of policy advocacy and from alerting elected officials to problems they’d encountered — unless invited in writing to do so. The restrictions “deprived low-income clients of some of the tools that every other litigant has available to them,” says Rebekah Diller, an expert on the civil courts at the Brennan Center for Justice at New York University School of Law. The restrictions included what legal aid advocates call a “poison pill”: Any group taking a single dollar from the LSC could not participate in any of the restricted activities, even if they planned to use state or private funding for those purposes.

Perhaps most significantly, the law included a ban on class-action lawsuits, which represented a tiny fraction of the cases but packed a big punch. Lawyers from South Brooklyn Legal Services, for instance, had won a class action securing disability benefits for women with HIV. Legal aid lawyers in Maryland had prevailed on behalf of state prisoners contesting overcrowded living conditions. And lawyers from around the country took part in a major national effort challenging the way Social Security reviews were handled.

But what really got under the skin of the critics were the welfare-reform cases. On several occasions, publicly funded lawyers had come before the Supreme Court to challenge various welfare policies, including a regulation that required “a man in the house” and rules that denied benefits to people with green cards, people moving to new states and children from large families. With three major cases, their litigation ended up boosting the nation’s welfare tab by $400 million to $500 million annually.

With Congress gearing up for a welfare overhaul, some members may have wanted to preempt legal challenges to the changes they were poised to implement. Gramm, for one, called legal services “a major impediment to meaningful welfare reform.” Legal services lawyers were “being advocates for the existing welfare bureaucracy, and while they may have a right to do it, they don’t have a right to do it with taxpayers’ money,” he told the New York Times in 1995.

The restrictions outraged legal aid lawyers, who railed against the compromise. But some within their ranks saw the compromise as the only way to ensure their survival. The LSC could operate with restrictions or not operate at all.

Linda Perle, who directs legal services at the Center for Legal and Policy Studies, counters that LSC-funded lawyers never really pursued a left-wing agenda as the critics claimed. “What was said about legal services was never true. And it’s not going to be true if the restrictions are removed,” she says. “It will just be easier for legal services lawyers to provide justice to their clients.”

Fewer resources for clients and LSC

In the 15 years since the restrictions were passed, a serious crisis in civil representation has developed, and the recent recession has made it worse. Studies show that at best, 15 to 20 percent of low-income people have their legal needs met, says Perle. Some studies even suggest the figure may be as low as 5 percent, “and that was before the recession,” she adds. “Now resources are much fewer, and there are many more people who are eligible now, because people lost their jobs, people who were working full time are part time. There’s a lot more poor people now than there were two years ago.”

The recession also hammered the LSC’s alternative revenue source. Besides federal funds, the corporation gets money through a program called Interest on Lawyers Trust Accounts (IOLTA). It’s just what it sounds like: The countless small judgments that lawyers win for their clients are pooled into trust accounts from which the clients are ultimately paid; since 1980, states have been allowed to use a portion of the interest on that big pool of money to provide legal help to the indigent. But plummeting interest rates have taken a huge bite out of the total. “Basically, what we’ve seen is a 75 percent decrease” from 2008 to 2010, the director of the National Association of IOLTA Programs told the National Law Journal in January.

Like any large institution, the LSC has its internal issues. A 2009 inspector general’s report (pdf) found flaws in its oversight of contractors, for instance, and a follow-up report from the Government Accountability Office noted that “missing or flawed internal controls” limited the corporation’s ability to monitor the performance of its grantees. Another embarrassing development involved a rash of theft by staffers at four legal aid programs. These ranged from the conviction of a Hawaii program employee for stealing about $30,000 to a high-profile case in which the finance chief for Maryland Legal Aid was convicted of embezzling more than $1 million from the agency.

But the program’s biggest problems have been related to the congressional restrictions, which reports from lawyers and judges in 21 states have identified as a “barrier to justice,” according to the Brennan Center.

The ban on class actions, for example, prevents LSC-funded lawyers from pursuing recession-related problems such as unscrupulous behavior by foreclosure mills. “Many times, particularly when you have consumer fraud and widespread systemic problems, the best way to get at that is with a class action,” says Diller. As an example, she cites mortgage rescue scams, wherein shady operators target hard-hit neighborhoods, promising to help homeowners but making off with their money instead. “The way one should respond to that, when a company like that is targeting a whole community, is by bringing a class action on behalf of everyone affected,” she says. “But because of the restrictions, most of the law offices that help low-income people can’t do that.”

And the ban on legislative advocacy means that if an attorney sees “some sort of consumer scam preying upon low-income and elderly people,” Diller adds, “you can’t go bring it to the attention of your legislature.”

New Congressional efforts to cut aid

Now, once again, legal aid is on the chopping block: The Spending Reduction Act introduced by Ohio Congressman Jim Jordan proposes a $420 million cut to the LSC’s budget — which happens to be $420 million. The Christian Coalition and the American Farm Bureau are all for it.

The Christian Coalition, “and virtually all of its supporters, would support the current Republican effort to totally eliminate federal tax dollars going to such groups as the LSC,” says longtime Coalition lobbyist Jim Backlin, adding that his group also seeks cuts to the National Endowment for the Arts, the Corporation for Public Broadcasting and “countless other federal organizations.” The Farm Bureau’s policy book promotes a “call for major reform,” including “the U.S. government ceasing to provide federal funding for Farm Workers Legal Services.”

Realistically, the wholesale elimination of LSC funding isn’t likely to make it far in the Senate, but the latest version of the House appropriations bill that funds the LSC calls for an 18-percent budget cut. Which is pretty brutal, given that the corporation had requested a 23 percent increase based on overwhelming need for its services.

The LSC said in a statement that the cut would “decimate civil legal aid,” while Stephen N. Zack, president of the American Bar Association, called the proposal “shocking and unacceptable,” adding that his group will fight it.

“LSC-funded programs help about a million people a year,” says Diller. “So you’re always going to find one or two cases that you can construe as controversial. The point is that you have millions of people in need.”

Flawed loan paperwork? Prove it.

Published February 14, 2011 with the Investigative Reporting Workshop.

When Nicolle Bradbury was on the verge of foreclosure in 2009, she reached out to a nonprofit legal services group in Maine, asking for help. Tom Cox, a volunteer with Pine Tree Legal Assistance, took her case. And he quickly spotted a red flag in her file — something that only someone, like Cox, who spent decades looking at legal documents is likely to have caught. Her foreclosure paperwork had been approved by a “limited signing officer,” and Cox suspected that person didn’t know as much about Bradbury’s mortgage as he was supposed to.

Photo by Tim Greenway

Tom Cox prepares for a court case in front of the Maine District Court in Biddeford on Nov. 18, 2010. He says foreclosure defense work is “some of the most complicated that there is.”

That hunch led to what is now known as the robo-signing scandal: the practice by which lenders and mortgage companies, processing thousands of foreclosure papers every month, used low-level workers who breezed through stacks of documents but did not actually verify the information in the loan papers, although their signatures attested that they had done just that. In theory, borrowers with robo-signed loans may be able to challenge their foreclosures. But flawed loan paperwork is no guarantee of success in court, particularly if, like most homeowners, they are facing the courtroom alone.

“The foreclosure defense work is some of the most complicated that there is,” Cox told me last week. “The amount that you have to know, and the speed at which the law is evolving, is amazing to me.”

To expose what he calls the “dishonest documents,” Cox deposed Jeffrey Stephan, who signed loan papers for GMAC, including Bradbury’s foreclosure paperwork. But to get Stephan “into a chair at a table across from me” took enormous effort, Cox says. He had to file a document with the Maine courts, asking the courts in Pennsylvania, where Stephan lived, to take action. The whole process was so obscure he had to explain the system to the judge.

“There’s no way a lay person could navigate that,” he says. “Most lawyers can’t.”

Maine is not a state known for its foreclosure crisis, and, indeed, the numbers are miniscule compared to states like Nevada and Florida. But in a rural state, where the rental housing options are limited, foreclosure can be devastating.

Nan Heald is the executive director of Pine Tree, the only group in the state that receives money from the Legal Services Corporation. She says that Pine Tree, Maine’s biggest legal services agency, can handle just 6 percent of the foreclosure cases that come its way. And that’s with the support of outside lawyers like Cox. Without the lawyers coming through the state’s pro bono program, Heald says, she’d be able to help just 3 percent of the foreclosure cases they see.

Historically, legal services groups in Maine have received substantial support from a state fund fed by the interest on lawyers trust accounts. But with interest rates down, the flow from that fund has plummeted. Pine Tree is facing a 20 percent budget shortfall this fiscal year, according Heald. Asked how she plans to make up the deficit, she laughs.

“A lot of grant writing,” she says. Heald says she hopes new funding will become available as awareness of the crisis in legal representation grows.

“I’m always optimistic that budget deficits can be erased,” she says. “I’d like to believe that’s possible.”


99 weeks of problems

Published March 28, 2011 with the American Prospect.

Ninety-nine weeks is a long time. Ninety-nine weeks ago, it was early April 2009. President Barack Obama was wrapping up his first 100 days, and he saw “glimmers of hope across the economy.” The official end of the Great Recession, in June 2009, was just around the corner.  

Tell that to Wayne Drescher. Ninety-nine weeks ago, the 59-year-old was three months out of a job and collecting unemployment checks. Now, more than two years removed from his layoff—“a Monday,” he says, “the day my world turned upside down”—he’s joined the ranks of the so-called 99ers: people who have exhausted all 99 weeks of available unemployment assistance.

The government estimates that 1.4 million Americans are in the same boat as Drescher—what the Bureau of Labor Statistics  calls the “very long-term unemployed.” The National Employment Law Project puts the number far higher, at 3.9 million. “As long as the economy continues to be in bad shape,” says Claire McKenna, a policy analyst at NELP, “I can’t imagine the number is going to go down.” There are also almost 6 million people who have been out of work for 27 weeks or more, some of whom are on their way to 99er status.

Yet despite their numbers—and their potential as a swing voting bloc, given their political diversity and shared predicament—the 99ers are oddly invisible. They have had no mass protests in state capitals, no marches on Washington, no storming of Wall Street. Why?

A lack of leadership is one factor: The 99ers are spread across the country and are only loosely organized, mostly through websites and a weekly chat on Twitter. A lack of cash is another. They can’t pony up funds for buses to D.C. or New York. And many can’t afford Internet service, which hinders online organizing.

Psychology also plays a role. Many 99ers I’ve talked to are battling a sense of shame at having lost a long-held job, and so they often keep quiet about their crises. “You don’t want to walk out in the street and put a sign on and say, “Hey, I’m unemployed, look at me,’” says Rhonda Taylor, a 99er advocate from Rhode Island.

But one of the biggest reasons for 99ers’ invisibility is a surprising one, given their potential political value: a lack of allies.

Being a 99er is, under the best circumstances, a transient state. People don’t want to build an organization around an identity they’re trying to shake off. That makes finding allies a challenge.

As allies go, however, labor unions would seem to be a good option: Their resources and recent media attention make them attractive partners. But unions, by definition, represent people working in specific sectors. The 99ers, by definition, aren’t working at all. Some 99ers look at the protests around wage and benefits cuts with skepticism. Public workers may be losing pay, but at least they have jobs.

The 99ers could also align themselves with groups focused on issues of poverty, income inequality, and public benefits. That means groups like the National People’s Action, a coalition working “to advance a national economic and racial justice agenda.” Ninety-nine weeks ago, that might have meant ACORN, but much can change in 99 weeks.

These groups, however, tend to lean left politically—and the 99ers I’ve talked to run the gamut, from conservatives (like Drescher) and former Tea Party activists to lifelong Democrats. With any potential ally, says Jason Tabrys, who organizes the weekly 99er Twitter chats, “it’s about these causes being a little bit flexible, and letting their messages merge.” Besides, he adds, “I’ll work with anyone, left, right and center. Our people just want to survive.”

Despite their circumstances, most 99ers don’t see themselves as poor but rather as middle-class people fighting a temporary setback. Unemployment is for workers going through a rough patch. Welfare and food stamps are for the underclass. “We’re not the typical system suckers,” JD Galvin, a 99er from Illinois, told me. “We’re not used to handouts.”

Lacking an ally among traditional interest groups, the 99ers have taken their case directly to Washington, pushing for legislation to create additional weeks of unemployment benefits and give jobless Americans more time to find work. Support for such legislation could be lawmakers’ ticket to winning over this valuable constituency. Reps. Barbara Lee and Bobby Scott have taken a stab at it, introducing a bill to add 14 weeks of unemployment benefits. H.R. 589 has 74 co-sponsors, all Democrats. House Speaker John Boehner and Majority Leader Eric Cantor reportedly agreedlast week to meet with Lee and Scott about the bill, but prospects for passage are dim, given the GOP’s determination to pay for any extension with existing funds or to offset it with spending cuts.

The 99ers are making no secret of their potential value to political candidates. With or without allies, they are looking ahead to the next election season.

“We’re a big voting base,” Taylor says. “As we get organized, we’re not going to choose between who’s worse. We’ll run our own candidate if we have to.”

Ultimately, of course, the 99ers don’t just want more unemployment help. “I want to get up in the morning and go to work,” Drescher says. “But I feel like it might never happen.”

Housing counselors under siege

Published August 5, 2011 with New America Media.

By Kat Aaron and Mary Kane

Just as foreclosures are poised to take off again, housing counseling groups across the country are getting hammered by federal budget cuts, a deficit-reduction measure that may save a few dollars now but could further damage an already hobbled economy.

In April, $88 million was cut from the Department of Housing and Urban Development budget, a reduction that included all funding for foreclosure prevention, reverse mortgages and first-time and other home purchases, said Jesse Van Tol, spokesperson for the National Community Reinvestment Coalition.

Those cuts take effect Oct. 1, and it’s not clear yet whether other sources of foreclosure counseling funds can come close to making up for the lost money. In the meantime, securing any money for HUD counseling in 2012 will require a fight, given that proposals so far call for zero funding again next year.

“We won’t have much of a chance for a recovering housing market if people aren’t able to buy homes and avoid foreclosure,” Van Tol said. The housing counseling money “helps people to do both of those things. By stripping it away, we’re making the problem worse.”

In New Jersey, for example, “where lawyers are just waiting to push the button,” it’s been estimated that there are between 20,000 and 30,000 foreclosures pending, said Alan Mallach, a senior fellow at the National Housing Institute. Yet one New Jersey housing counseling agency already has shut its doors and more closings are expected.

In Maryland, in March, more than 7,100 notices of intent to foreclose were filed in Prince George’s County alone, more than twice as many than in any month since the state began keeping records in 2008.

“This has become a major crisis around the country,” Mallach said. “It’s crazy. It’s totally crazy. No one believes foreclosures are going down in the long term. We’re totally cutting services to people who need them the most.”

Nationally, RealtyTrac said a backlog of pending foreclosures has cast “an ominous shadow” over the housing market.  As many as 1 million foreclosure actions that should have taken place in 2011 will now happen in 2012, or even later, the company reported in July. Even with delays in those foreclosures, some 2 million total foreclosure filings are expected this year, RealtyTrac said.

Advocates contend housing counselors have helped prevent some 900,000 foreclosures. In Maryland, HomeFree, a counseling agency, is already fielding far more requests for help than its staff can handle, thanks to a drumbeat of foreclosures and escalating unemployment. And that’s despite the herculean efforts of the agency’s staff.

“The reality is, counselors are carrying probably double (the workload of) what they should,” said Peyton Herbert, vice president of the organization.

In Maryland, one source of cash is the foreclosing lenders themselves. Under the state’s foreclosure mediation law, lenders must pay $300 each time they file a notice of intent to foreclose, a document alerting homeowners that a foreclosure action is around the corner.

Those fees totaled $2 million for counseling groups between June 2010 and July 2011, said Carol Gilbert, assistant secretary for neighborhood stabilization at the Maryland Department of Housing and Community Development.

But the state funds can’t make up for the lost HUD funding.

A major obstacle to preventing foreclosure is getting mortgage servicers to process loan applications, something housing counselors can assist with. The slow grind of foreclosure notices and modification limbo can make homeowners lose hope.

“People are ditching their homes,” said Lisa Butler McDougal, executive director of Sowing Empowerment and Economic Development, a Maryland counseling agency.

“It’s unemployment, a lack of wages, low wages, or any kind of reduction of wages in the home,” she said. “That’s what’s leading to the foreclosures.”

Foreclosures mount, mediation efforts fail

Published July 21, 2011 with

By Kat Aaron and Mary Kane

PRINCE GEORGE’S COUNTY, Md. – On a hot summer evening, two second-year law students are trudging through the leafy neighborhoods of suburban Prince George’s County, knocking on doors. Toting stacks of fliers, the young women are going house to house, making sure that delinquent homeowners know about the state’s mortgage mediation program.

Tonight, only two people answer the door. One, like 11 others the students have contacted during previous outings, insists she already has gotten her loan modified and doesn’t need mediation, despite a foreclosure notice on record. Another homeowner, in default after taking off work to care for a sick relative, takes the mediation information and says she’ll consider it. The students leave fliers at a house with a “for sale” sign in Hyattsville and an empty condo in a nearby neighborhood.

They will try again another day.

Mediation has been touted as a key strategy to stop foreclosures, both in Maryland and nationwide. Maryland passed a law last July giving homeowners in foreclosure the right to mediation, if they ask for it. The Justice Department reported in a November study that there were 25 mediation programs in 14 states.

But if Maryland is any indication, the programs are not working. As of May 31, just 56 homeowners have gotten a modification of their loan. Borrowers complain that lenders are more interested in foreclosing than negotiating. One borrower was horrified to discover that the bank had sold her home during the mediation process.

Prince George’s is the nation’s wealthiest majority-black county. Like many majority-minority areas, Prince George’s has been devastated by the foreclosure crisis. Heavily targeted by subprime lenders in the boom years (see map), the county is now staggering under the weight of abandoned homes and plummeting prices.

For Prince George’s, and for other communities of color around the country, a “lagging collapse” may be ahead, said Alan Mallach, a nationally known housing expert who has done extensive on-the-ground research into the foreclosure crisis.

Foreclosures slowed in the early part of 2011, as lenders dealt with accusations of “robo-signing” — approving foreclosure documents without looking at them. But now, they’re coming back with a vengeance: In March, more than 7,100 notices of intent to foreclose were filed in Price George’s alone, more than twice as many than in any month since the state began keeping records in 2008, according to an analysis of state records by the Investigative Reporting Workshop. Statewide, close to 30,000 notices were filed.

“I think it’s grim. And it’s going to be grim for a while. I’m not sure we’re anywhere near the aftermath yet. We’re still in the middle of the storm,” Mallach said.

Mediation a ‘formality’

More than 42,000 properties in Maryland received foreclosure filings last year, according to RealtyTrac. Mediation was supposed to be a way to stop the bleeding. When the mediation legislation was introduced in April 2010, Lt. Gov. Anthony Brown, a Democrat and Prince George’s County resident, said the program would “provide homeowners a chance to explore any and all options to find a positive resolution and remain in their homes.”

Tell that to Louis Boney.

He lives in a small, white frame house on a quiet, grassy street in Clinton, Md. When his home fell into foreclosure, he thought the mediation process might help. But he hit unexpected pitfalls. Although he submitted all the financial documentation required under the law, his lender, Wells Fargo, demanded he provide bank statements as additional proof of income.

African Americans lead in foreclosures

Source: Center for Responsible Lending.

Graphic by Melanie Taube, Investigative Reporting Workshop

The Wells Fargo servicer — present by speakerphone during the mediation — explained that he could not discuss any potential foreclosure alternatives without having three months’ worth of bank statements in hand.

“My computer won’t allow me to proceed further (without them),” the bank representative informed everyone at the session, said his Legal Aid lawyer, Gretchen Reimert.

Reimert asked for a second mediation session but Wells Fargo refused. She also asked for more time to submit the statements, and the bank refused. Reimert then threatened to challenge the validity of the mediation. Prodded by the mediator, Wells Fargo gave Boney several weeks to submit a package with the additional paperwork. But that’s no guarantee Boney won’t be foreclosed on. Wells Fargo will either make an offer that Boney will have to accept to keep his home, or notify him that he does not qualify for anything, and set a foreclosure sale date, Reimert said.

“For me, the mediation process, I think, was a gimmick,” Boney said. “In my opinion, they came there just to go through the formalities. They just want to foreclose.”

Wells Fargo, for its part, sees the situation differently. Spokesman Tom Goyda said the bank is very supportive of Maryland’s program and has participated in training and outreach for it. “Wells Fargo is committed to helping every customer we can avoid foreclosure,” he said. “We continue to work with Mr. Boney on a resolution to his case.” Goyda also noted that it’s not unusual for Wells or other banks to require additional documents when working with a borrower on a loan modification. In some cases, investors request the information, or it’s required for Fannie Mae, Freddie Mac, or FHA loans.

Program ‘new to everybody’

Boney isn’t the only one who found mediation underwhelming. A year after the law was passed, fewer than 1,000 borrowers had applied for mediation, and just 56 borrowers had received a loan modification as of the end of May, according to the Maryland Department of Labor, Licensing and Regulation. Another 159 cases ended with a so-called contingent resolution, meaning that the borrowers were promised a modification pending additional paperwork. In total, 829 mediation cases have been closed since the law took effect.

One reason for the low participation may be that homeowners don’t know about the mediation program. That’s why law students go door to door, handing out fliers. But there’s only so much ground they can cover.

The mediation program is still “new to everybody,” said Carolyn Green-Fitzgerald, a housing counselor with United Communities Against Poverty. While the program became law in July 2010, it only began operating in earnest in September. “Homeowners just aren’t sure what to do or to expect.” Her agency hasn’t referred a single borrower to mediation.

Despite the low participation rates, mediation sessions have been good for borrowers, said Carol Gilbert, assistant secretary for neighborhood stabilization at the Maryland Department of Housing and Community Development.

“Whether or not they prevent foreclosure, they do get to closure, by understanding what their lender’s position is and understanding what their options are, or are not,” she said.

What the mediation program has accomplished is “getting both sides of the (lending) shop to communicate,” Gilbert said. “The foreclosure side of the shop that’s working in turbo drive is very effective, and the modification side is not.”

“We were seeing so many consumers fall through the cracks who were midstream in their modification process and next week they were getting foreclosed upon,” she said.

Except that’s still happening.

Foreclosure sale, then mediation?

Antoinette Barber, a homeowner in Baltimore City, requested a mediation session, using the information provided by her lender, HSBC Bank. But paperwork problems plagued her case from the start, including that HSBC listed her home as abandoned, said her attorney, Legal Aid’s Reimert.

Trouble started with the envelope that foreclosure attorneys representing HSBC gave Barber to send in her mediation request. It was labeled with an incomplete address, missing the room number for the mediation program at the Baltimore circuit court. The paperwork never arrived at its destination, so no mediation session was scheduled. Barber received a second notification of her mediation rights, and submitted a second request on March 9.

But HSBC’s attorneys had already scheduled a foreclosure sale for March 11. And although the court scheduled a mediation session for April 13, and notified the foreclosure attorneys about it, the foreclosure firm didn’t cancel the sale. Barber’s house was sold two weeks later. Barber, a single mom with two children, arrived at the April mediation session in tears.

Things got worse from there.

HSBC’s servicer — after putting the call on hold for 15 minutes during the session — said that Barber’s file had been transferred to another department and couldn’t be found. Besides that, HSBC’s foreclosure attorney said she wouldn’t agree to anything that day, unless Barber would allow the foreclosure sale to go through. Barber refused, and Reimert has filed a motion to rescind the sale and stop the foreclosure. HSBC, for its part, told Reimert it considered the matter settled because Barber could try to call back and talk to someone in two to three weeks. “My head almost exploded,” Reimert said.

“Mediation is a joke,” Barber said. “I was really counting on it helping me. But they did nothing for me. It was a waste of time.”

HSBC officials had not returned a call seeking comment for this story by press time.

It could be worse?

In some ways, Prince George’s is doing better than many other communities of color. It sits next to Washington, D.C., a city relatively insulated from the recession by a stable base of government jobs. D.C. is the only metro area in the country where home prices are on the rise.  Unemployment in the greater D.C. area is under 6 percent. If Prince George’s can’t make it through the crisis, the fallout in less wealthy minority neighborhoods may well be worse.

The homeownership gap

The homeownership rate for non-Hispanic whites has remained at over 70 percent since 1994, while the homeownership rate for blacks and Hispanics has trailed significantly, at less than 50 percent.

Source: Census Bureau

Graphic by Melanie Taube, Investigative Reporting Workshop

But the prosperity of the region is not evenly distributed, not now, and not in the pre-recession years. The District’s communities of color were hit hard by subprime loans at the front end of the crisis. African-American and Hispanic borrowers in the D.C. metropolitan area were far more likely to get subprime loans than white borrowers with similar credit scores and incomes, according to a 2009 study by the National Community Reinvestment Coalition. That echoes patterns seen around the country, with black and Latino neighborhoods blanketed with high-cost, often abusive loans.

In Prince George’s county, subprime lenders dominate the list of companies filing notices of intent to foreclose, according to the Workshop’s analysis of state data. Many are no longer in business: Fremont Investment & Loan, New Century Financial Corp., Option One Mortgage, WMC Mortgage Corp., GreenPoint Mortgage Funding Inc. and EquiFirst Corp. have all closed their doors. But their loans live on. Topping the list is Wells Fargo, which was sued by the city of Baltimore for allegedly steering black borrowers toward higher-cost loans.

Memphis and Cleveland, like Baltimore, filed suit against the banks they blamed for selling predatory loans and causing damage to their cities. In Prince George’s County, however, attitudes toward the foreclosure crisis are different. The county government has taken little action, and a series of corruption scandals haven’t helped matters. For the most part, people in and out of government don’t talk about it. When they do, there’s a sense of shame, of blaming themselves, even though they know their community ended up with more of its share of subprime loans. And there’s a simmering anger that lenders aren’t paying for the damage done.

Tough choices for borrowers

On a recent afternoon, Doris Tucker and her father-in-law, Ron Tucker, sat on a sunny balcony overlooking a creek in a cul-de-sac of expansive new homes in Fort Washington, a prosperous Prince George’s County neighborhood. Inside was a potential buyer, who had just made an offer for a short sale — meaning the buyer would pay less than what was owed on the loan. Ron Tucker’s home, built in 2004 for $1.3 million, was about to be sold for $725,000.

Tucker’s problems began after his wife died of cancer in July 2010. Despite the loss of her income, his lender, IndyMac, a major subprime lender that was seized by the federal government, wouldn’t consider a loan modification because Tucker remained current on his payments. And with a “jumbo” loan, Tucker didn’t qualify for a government loan-modification program.

Each month, since his wife’s death, his income has been $3,100 short of his mortgage payment. He has pieced the payments together with income tax refunds and death benefits. But he can’t keep it up. So Tucker, 69, a former police officer and federal government security guard who retired in September, agreed to a short sale.

Doris Tucker, 48, (watch video) a former Realtor and nurse who stopped working because she has lupus, has a loan modification for her own Prince George’s house. It’s reducing her interest rate temporarily, but not her loan balance, and she’s not sure what will happen in a few years, when it ends. She’s helping her father-in-law with the short sale.

“He has never walked away from anything in his life. So this is really, really hard for him. I had to talk him into it,” she said. “I said, ‘you are either going to lose it today or lose it after you use up all your retirement money tomorrow. Which will it be?’ ”

Standing on the front steps of his house, Ms. Tucker points out at least five other homes on the cul-de-sac that are in foreclosure. There are no foreclosure signs in the yards, no boards on windows, no furniture out front. The crisis is invisible.

That invisibility contributes to the deafening silence in the county about the scale and impact of foreclosures. “It’s all individual pain,” she said. Most people don’t realize “that every two people on every block is going through this, so I think I am the only dummy around that took this bait.”

In Ms. Tucker’s Upper Marlboro block, six of the 11 homes have been in foreclosure at some point. The foreclosures, she said, have changed Prince George’s permanently. Earlier in the crisis, she said, people in foreclosure would just walk away from their homes. These days, even in high-income areas, “they take the furnace, the stove, the refrigerator. They take anything and everything that isn’t nailed down.”

“You already see a change in the quality of life,” she said. “You see more drastic crime. People are desperate.”

The impact of the lost homes will reverberate for years. Her goal, her father-in-law’s goal and the aspirations of many of her friends was to pass down their housing wealth to their children. That’s not going to happen, and that may be the greatest loss that results from the foreclosure mess.

“It’s amazing that two generations and three generations ago they did better actually than we did in obtaining land,” the mother of two said. “Right out of slavery, sharecroppers bought and had” land, she continued, a sharp contrast to “what we are getting to ready to lose this generation.”

Lenders can’t make changes

This dire situation isn’t lost on the state. The state legislature has made tweaks to the mediation law, giving homeowners more time to request a meeting with their lender. They’ve also addressed an early criticism of the program’s outreach, printing the mediation notice on brightly colored paper to help it stand out in the massive stack of documents sent to delinquent homeowners.

But those changes may not be enough. The law student canvassers, from American University’s Washington College of Law, say many Spanish-speaking homeowners aren’t aware of their mediation rights, because the notices are all in English. Or borrowers have been hit by loan modification scammers, making them wary.

The biggest problem, though, may be the lenders. Borrowers and counselors around the country have complained that the modification process breaks down because the people at the servicer call centers don’t have the power to change the terms or balance on a loan.

Maryland’s mediation program was supposed to be a sure-fire way to get decision-makers in the room. The law requires lenders to be “present and or readily available,” said Anthony DePastina, director of litigation at Civil Justice, Inc., a nonprofit legal services group.

That’s the idea. But housing counselors and attorneys say it’s not always the reality.

“Too many times have I heard the story, ‘Oh, the lender is going to be available,’ but you call them and the lender’s out to lunch, or they have no concept of the file you’re talking about,” DePastina said.

When they are available, the servicer often says they don’t have the power to sign off on changes, as in Louis Boney’s case. And the administrative law judges who oversee the sessions have very limited powers. They can’t order lenders to do a loan modification or stop a foreclosure.

“If you’re going to have the mediation, I’m sure the governor never intended for people not to try to work it out,” said Sharon Goldsmith, executive director of the Pro Bono Resource Center of Maryland.

Downward spiral

Just over one-fifth of all loans in Prince George’s were either in foreclosure or delinquent at the end of last year, according to an analysis by the Urban Institute. Rates of delinquency, severe delinquency, foreclosure and real estate owned properties are all more than twice the regional average.

Foreclosures have been down at the start of 2011 in Prince George’s, as in the rest of Maryland and the nation — a change many attribute to the “robo-signing” mess, rather than an easing of the crisis.

But the lull in foreclosures in the county hasn’t resulted in a slowdown in foreclosure-related sales. Greater Baltimore Board of Realtors figures show that as of March, 52 percent of all real-estate sales in Prince George’s were foreclosures and 17 percent were short sales, significantly higher than the percentage of such sales in nearby Montgomery County or the city of Baltimore.

And the notices of intent to foreclose are picking up dramatically, indicating a new round of foreclosure filings may be close. Once a notice is filed, a lender can move to foreclose within 45 days.

The crash is particularly steep in Prince George’s because the market flew so high during the boom years. “It’s where movers and shakers were going,” said Vicki Taitano, director of Maryland Legal Aid’s Foreclosure Legal Assistance Project. “People (were) really thinking like they were getting the American dream, establishing themselves.”

Now, though, the combination of predatory loans and a weak economy have had a “rather lethal effect” in Prince George’s County, said Robert Strupp, manager of systemic investigations for the National Community Reinvestment Coalition.

Some borrowers may have overreached in their pursuit of the dream. But many homeowners didn’t live beyond their means. Their means just aren’t enough anymore. A lost job or an illness can be the difference between scraping by and failing.

“The scary story out there is that it takes one or two (missed) payments to get a homeowner into this black hole of hell,” said Douglas Rian, a forensic auditor with Maryland-based Professional Compliance Examiners. “It transcends all socioeconomic bounds.”

As bad as things are in Prince George’s, the fallout may be even worse in minority neighborhoods outside the Washington economic bubble.  For many cities, like Phoenix and Las Vegas, the foreclosure crisis started out huge, but then “things went downward a slower rate,” said Mallach, a senior fellow with the National Housing Institute.

Cumulative impact

In other places, though, the slow but steady pace of foreclosure is just hitting home.

Consider Irvington, N.J., a largely African-American community and inner ring suburb of Newark. The damage wasn’t massive in the first years of the mortgage meltdown, but the cumulative impact of five years of foreclosures and abandonment mean “things have really gone down big time,” Mallach said. The average home sales price fell from $215,000 in 2008 to $94,000 by 2010, with some neighborhoods experiencing declines above 70 percent. Irvington’s experience is not likely to be unique.

“In many minority communities outside the DC metro area, in two to three to five years, I would expect to see major abandonment of foreclosed properties,” Mallach said.

The mediation problems in Maryland are yet another indication that so far, government efforts aren’t putting a dent in the foreclosure problem. Mallach isn’t optimistic they will any time soon. “I see nothing on the horizon that could give these areas the kind of shot in the arm they need to turn things around.”

“This is the disgrace of the whole thing,” Mallach said. “Basically, the lenders who made these loans are paying huge amounts of money to the investors that they defrauded. But the problem for these communities is that basically the lenders got away with murder, and they are continuing to get away with murder.”

In Prince George’s County, homeowners have paid a steep price for some bad loans and some bad choices. Ron Tucker wants lenders to pay, too.

“Those big banks got bailed out with our money and then they turn around and screw us even more. Somebody should go to jail. This is ridiculous,” he said. “These people almost brought down the world and they are still living high off the hog.”

Investigative Reporting Workshop data editor Jacob Fenton contributed to this report.

Skills and jobs don’t line up

Published May 12, 2011 at the Investigative Reporting Workshop

No one said winning the future would be easy.

For a bright 21st century, America is going to have to make big changes in the way it thinks about education, workforce development, economic policy and job training. And if that isn’t a tall enough order, it’s also going to have to integrate immigration policy into the mix. Oh, and figure out how to pay for it all, then get a sweeping mix of policies passed by a Congress bent on retrenching.

That was the message of a bipartisan panel that met in Washington this week, featuring five eras of leaders in Congress and the Department of Labor.

Evelyn Ganzglass leads the workforce development program at the Center for Law and Social Policy, which organized the event. This is “an especially good time” to look back at what’s worked, and what hasn’t, in workforce development, she said. “The economic challenges we face couldn’t be more daunting.”

A high school degree “used to be the passport, if you will,” said Kitty Higgins, Deputy Secretary of Labor in the Clinton administration. No more.

Jobs that don’t require a college degree are scarce. In 1973, 72 percent of workers had only a high school education. By 2018, almost two thirds of all jobs will require a college degree or higher, according to a report (pdf) from the Georgetown University Center on Education and the Workforce.

“The world has changed a lot,” said Ray Marshall, Secretary of Labor in the Carter administration. Globalization has taken a massive toll, he said, creating unemployment that is more long term, and more structural. The needs of employers are different now than four decades ago, and the changes are hitting people in their paychecks. In his day, Marshall said, “we did not have the problem of a long-run decline in real wages for American workers.”

In large part, argued the panelists, that has to do with the growing gap between the skills of the American workforce and the skills employers demand. “We’re now paying the price for what we did not do in education,” said William Brock, Secretary of Labor in the Reagan administration.

President Obama has said he wants to raise college attendance and graduation rates, and has promoted a focus on science, technology, education and math in the country’s public schools. For workers unemployed now, though, that’s not much help. That’s where workforce development comes in. Such programs, offered through community colleges, state-sponsored One-Stop job centers, and other training sites, give people a chance to upgrade their obsolete skills to match the jobs on offer.

Given the rapid economic change, workers need a “lifetime opportunity to improve, change, and modify their skills base,” Brock said. Policy makers must “create systems that are much quicker on their feet.”

One way to do that would be through a lifelong learning account, said Steven Gunderson, a former Republican congressman from Wisconsin.

The worker would put 10 cents an hour into a private account, matched by the employer. The worker could draw on the account to fund training, as needed. Other panelists suggested an overhaul of the current workforce development system, which provides training through public and private institutions, largely paid for through the Workforce Investment Act.

However it’s funded, the quality and usefulness of job training varies widely. Many workforce development programs don’t grant credentials that are accepted by industry, said Roberts Jones, assistant secretary of labor for employment and training under Reagan and the first President Bush. Recognized certifications “are the empowering tools,” he said. But, Jones said, the idea of standardized credentials has not gained traction at the departments of labor or education.

And then there’s the immigration issue. Marshall argued that immigration policy must be integrated into workforce development and economic policy. President Obama seems to agree. Speaking this week in Texas, he argued that “immigration reform is an economic imperative.”

“One way to strengthen the middle class in America is to reform the immigration system so that there is no longer a massive underground economy that exploits a cheap source of labor while depressing wages for everybody else,” Obama said.

All of these solutions, from increasing college attendance to immigration reform, require political will. Which, Gunderson said, is largely absent.

“I shouldn’t be on this panel,” he said, noting that he left Congress in 1996. That there was no current member of Congress on the panel was an “indictment of the lack of leadership” on this issue, he said.

That may be changing. There is consensus, Higgins said, that “what we have isn’t what we really need. The question is, how do we get from here to there.”

“We’ve got to find a new way to do this,” she said. “It isn’t serving our workers.”

In focusing on retraining and skills development, though, the panelists downplayed the grim reality that the economy has lost almost 8.7 million jobs since the start of the recession. Just 1.7 million jobs have been created since the beginning of 2010, according to the National Employment Law Project (pdf). In April, there were 10.4 million people out of work, and another five and a half million working part time but a seeking a full time job. Coordinating skills and jobs may be one answer, but the scope of the jobs crisis has outpaced the current solutions.

“The ability to address this problem in traditional terms is gone,” Brock said. “People in this country are scared. That includes even some members of Congress.” And, he added, “they better be.”

Charts help: Economic data by the numbers

Published April 15, 2011, at the Investigative Reporting Workshop

Since the rise of interactive data visualizations, the dismal science has become decidedly less dismal. Economists are still painting a pretty grim picture of the American economy, but at least the statistics are easy to understand and interpret, thanks to a series of stellar new websites.

The sites below lay out issues of income inequality and economic security, using clear and simple charts and graphics. With varying degrees of interactivity, these online tools let Americans get a sense of how we’ve arrived in the state we’re in.

Here at What Went Wrong, we’re working on adding narrative and characters to some of the data compiled by the esteemed economists and policy wonks at these organizations.

Mapping the Measure of America

This site features state-by-state maps for a range of economic and social indicators. You can explore three indexes, with numbers on income, health and education. Each index includes parsed-out detailed data, like the number of marginally attached workers, food insecure households or per-pupil spending. You can also check out the data broken down by sex and/or race, a section that here includes Native Americans, a group often excluded from such analyses.

It’s the companion site for a book by the American Human Development Project, called The Measure of America 2010-2011: Mapping Risks and Resiliance. The report, written by Sarah Burd-Sharps and Kirsten Lewis, is a project of the Social Science Research Council.

Economic Security Index

This site charts rising economic insecurity, giving hard numbers to the looming sense most Americans have that formerly solid ground may give way at any moment. The authors of the site, and its accompanying report, spent years calculating a measure they call the Economic Security Index, which “measures the share of Americans who experience a major drop in their available family income — whether due to a decline in income or a spike in medical spending — and who lack an adequate financial safety net to catch them when they fall.” In other words, their data and charts show how, over time, Americans have lost substantial percentages of their income, making it much harder to recover from unforeseen (but not unusual) events. Their timelines can be broken down by age, race, education level, and gender, which means you can compare the insecurity of, say, Black women with a college education with the average of all Americans.

In July 2010, the Index authors summarized the key findings (pdf) from the index and followed up in December 2010 with Shaky Ground (pdf), a look at Americans’ experiences with economic insecurity. One fascinating finding of the latter report: people who experience one economic “shock” often experience several more shocks after that. As the authors note, “Americans’ lives are not simply disrupted by the occasional unfortunate happenstance. Many experience a series of economic shocks, the combined impact of which is much larger than any of the individual shocks. When economic shocks both cluster and persist, the lives of even the most prudent and careful households can be deeply disrupted and those households’ expectations for the future can be profoundly unsettled.”

State of Working America

The State of Working America is the old kid on this block. The report has been published since 1988, by the Economic Policy Institute. This year, they’ve made some telling charts, illustrating things like how economic growth goes disproportionately to the wealthiest Americans and how household wealth breaks down by race. Most of the charts are static, not interactive, but still extremely clear and useful. They also let you download the spreadsheets they use to create their charts, so if you really want interactivity, you can build it yourself.

And of course, we have to shout out the charts on income inequality created by the folks at Mother Jones. Even though literally millions of people have already looked at them.