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Biden Is Breaking His Sick Leave Promise To Crush Rail Workers

As a labor dispute between rail workers and railroad companies barrels towards a nationwide rail strike, President Joe Biden is standing with railroad barons to force a deal on workers that not only falls far short of their demands, but also goes against Biden’s own promises to grant reasonable paid sick leave to all Americans.

The move is the latest and possibly starkest example of the chasm between Biden’s pro-worker rhetoric during his campaign and presidency, and the numerous pro-corporate actions he has taken in the White House.

As part of his 2020 presidential campaign, Biden pledged that he would ensure all workers have at least seven paid sick days. And early in his presidency, he called on Congress to pass a bill that would require companies to let all of their workers accrue at least seven days of paid sick leave per year.

“It’s a national disgrace that millions of our fellow citizens don’t have a single day of paid sick leave available to them,” Biden said in a March 2020 campaign speech.

But this September, Biden reversed course, helping negotiate a deal between railroad bosses and unions that would only grant workers a single paid sick day per year, despite the unions pushing for as many as 15 sick days — a number they were ultimately willing to reduce to as few as four. Now, to avoid a shutdown of the nation’s rail network, he is asking Congress to force that deal on workers who voted to reject it.

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With Democrats in full control of Congress for just a few more weeks, Biden could be using this moment to push lawmakers to pass the party’s landmark union rights legislation or implement a national paid leave policy. Instead, he is calling on Democrats and Republicans alike to side with highly profitable railroad companies and crush their workers.

Sen. Bernie Sanders (Ind.-Vt.) has demanded that any back-to-work legislation include the unions’ paid sick leave demands, and pledged Tuesday that he will slow down the Senate’s process unless lawmakers pass an amendment of his guaranteeing five to seven paid sick days. Sanders is reportedly working with Sen. Kirsten Gillibrand (D-N.Y.) on the proposal. Even the conservative Democratic Sen. John Hickenlooper of Colorado demanded Tuesday that any legislation include at least seven days of paid sick leave.

That contention was echoed by Rep. Alexandria Ocasio-Cortez (D-N.Y.), who tweeted Tuesday, “Railroad workers grind themselves to the bone for this country as their labor produces billions for Wall St. They demand the basic dignity of paid sick days. I stand with them. If Congress intervenes, it should be to have workers’ backs and secure their demands in legislation.”

House Speaker Nancy Pelosi (D-Calif.) announced Tuesday evening that the House will vote Wednesday on the Biden-negotiated deal as well as a separate proposal to add seven days of paid sick leave to the agreement.

Sanders said in an MSNBC interview on Tuesday that Senate Minority Whip John Cornyn (R-Texas) indicated in the GOP caucus meeting Tuesday there may be significant Republican support for his paid sick day amendment, after Sen. Marco Rubio (R-Fla.) tweeted, “I will not vote to impose a deal that doesn’t have the support of the rail workers.”

Sen. Ted Cruz (R-Texas), for his part, said Tuesday that workers’ demands for paid sick leave are “quite reasonable.”

Most “Pro-Union President”?

While much of the corporate media’s coverage of the looming rail strike has focused on how the work stoppage would make a slowing economy worse and cause havoc over the holidays, far less attention has been paid to the circumstances that led the nation’s rail workers to consider such an extreme move.

Rail workers are somewhat unique in that they aren’t protected by the National Labor Relations Act, which protects workers’ right to strike at any time if their contract is expired. Instead, they are covered by the Railway Labor Act (RLA), an earlier law that requires workers to navigate a convoluted process before they are allowed to strike.

Rail workers, claiming deteriorating working conditions, have been negotiating a new contract  with railroad companies for three years. A key sticking point has been the matter of paid sick leave — because currently, workers don’t get any.

Railroad companies have been slashing their workforces for years, leaving workers on call for days and weeks on end with zero days of paid sick leave. Workers say that two of the largest railroad companies, Union Pacific and BNSF, have implemented onerous attendance policies that make it impossible for workers to go to the doctor or help with family emergencies. These policies have led to mass resignations, making the jobs even harder for workers who remain.

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As contract negotiations ground to a halt this summer, Biden convened an emergency board in July to make recommendations to the railroad bosses and union negotiators on a path forward.

But when Biden’s board came up with a tentative agreement in September, it didn’t even come close to meeting the workers’ paid sick leave demands — only including a single day of paid sick leave.

Meanwhile, the railroad companies don’t believe workers who make the industry run deserve any credit for their profitability, according to Biden’s emergency board.

“The carriers maintain that capital investment and risk are the reasons for their profits, not any contributions by labor,” the board wrote in its August report. “The carriers further argue that there is no correlation historically between high profits and higher compensation, either in the freight rail industry or more generally.”

Last week, the country’s largest rail union — the Sheet Metal, Air, Rail, and Transport Workers’ Transportation Division, representing 28,000 railroad workers — voted to reject the proposed agreement. This followed “no” votes on the deal from the Brotherhood of Railway Signalmen, the Brotherhood of Maintenance of Way Employees-Teamsters, and the International Brotherhood of Boilermakers — unions that together represent nearly 60,000 of the 100,000 union rail workers who could go on strike if no agreement is reached.

On Monday, Biden called on Congress to impose the agreement legislatively, overriding rail workers and bipartisan critics of the deal for the sake of the nation’s economy.

“As a proud pro-labor president, I am reluctant to override the ratification procedures and the views of those who voted against the agreement,” Biden said in a statement. “But in this case — where the economic impact of a shutdown would hurt millions of other working people and families — I believe Congress must use its powers to adopt this deal.”

This demand is in stark contradistinction to Biden’s response to Congress’ actions in 1992 that forced railroad workers back to work under similar circumstances.

In 1992, U.S. rail workers went on strike for just two days before Congress intervened and passed a back-to-work bill, ending the stoppage. Biden was one of just six senators to vote against the legislation, saying, “We need to restore a measure of balance to these negotiations… I am not convinced that we should act to reward the actions of the railroad companies at this time.”

Now, Biden’s efforts to crush the potential rail strike may not just prevent workers from winning their most basic demands or strip him of his claim to be the most pro-union president in American history.

The move will also indicate to other industries covered by the RLA, such as the airlines and the non-union shipping behemoth FedEx, that they don’t have to negotiate with their workers in good faith, because the president will step in at the last minute to protect them.

Build Families Back Better?

Biden is asking Democrats to use their precious final weeks with a governing trifecta to crush rail workers’ efforts to win paid sick leave, rather than passing their own proposals to extend paid sick leave and other protections to U.S. workers.

After Biden issued his statement Monday calling on Congress to pass legislation imposing the tentative agreement, Democratic leadership quickly fell in line. Pelosi said Tuesday that the House would vote this week on such legislation, and Senate Majority Leader Chuck Schumer (D-N.Y.) vowed to work with Republicans to pass it swiftly in the Senate.

That kind of urgency has otherwise been lacking in the waning days of Democrats’ control of Congress, as the window closes to pass more of Biden’s promised agenda.

Schumer has not held a vote on the Protecting the Right to Organize (PRO) Act, legislation that would make it far easier for workers to form unions — even though 48 of the 50 members of the Senate Democratic caucus have publicly supported the measure. House Democrats passed the bill in March last year.

As Politico reported this week, Schumer has also repeatedly sidelined legislation that would extend more job protections to pregnant workers, and if the Senate fails to vote on it before Republicans gain control of the House next year, the popular bill likely won’t be enacted in the near future.

Meanwhile, another bill that would mandate at least seven annual paid sick days at workplaces with 15 or more employees, reintroduced in April 2021, remains stuck in committees in both the House and the Senate. The so-called Healthy Families Act has been introduced 10 times since 2004, but has never made it to the floor for a vote.

Biden proposed including the Healthy Families Act in Democrats’ social spending and climate package, known as Build Back Better, but the legislation failed under the weight of opposition from Sen. Joe Manchin (D-W.Va.).

The version of Build Back Better that passed the House last fall included four weeks of paid sick and family leave, but never got a vote in the Senate, thanks to Manchin’s opposition.

While 17 states now mandate paid sick leave, 33 million American workers remain without such protections. According to the National Partnership for Women and Families, 82 percent of voters support a national paid sick days policy.

The lack of a federal policy currently prevents railroad workers even from enjoying state-mandated benefits. In a precedent-setting July ruling, a California appeals court found that federal law governing railroad workers preempted the state’s 2014 paid sick leave law, after six railroad companies sued the California Labor Commissioner to avoid extending new benefits.

In a statement responding to Biden’s actions on Monday, the Brotherhood of Maintenance of Way Employees Division of the International Brotherhood of Teamsters said it was “deeply disappointed.” The Brotherhood, the nation’s third-largest railroad worker union, called on “President Biden and any member of Congress that truly supports the working class to act swiftly by passing any sort of reforms and regulations that will provide paid sick leave for all railroad workers.”

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Railroading workers

(Photo by Justin Sullivan/Getty Images)

Railroad workers across the country are threatening to go on strike on December 9, delivering a potentially crippling blow to the American economy. According to the Association of American Railroads, a nationwide rail shutdown could cost more than $2 billion per day. There are 140,000 miles of rail in the United States, which are operated by about 115,000 rail workers. This network serves “nearly every agricultural, industrial, wholesale, retail and resource-based sector of our economy.” Passenger rail would also stop, disrupting hundreds of thousands of commuters. 

The dispute boils down to one issue: paid sick leave. 

Rail workers and railroad companies are at an impasse after more than two years of negotiations. In July, Biden named a Presidential Emergency Board (PEB) in an effort to help resolve the dispute and avoid a strike. The PEB issued recommendations that formed the basis of a tentative agreement in September between the railroad companies and 12 unions. The deal did not include any paid sick leave. 

The tentative agreement was subject to ratification by the members of the rail unions. And a majority of workers at four of the 12 unions rejected the deal. The unions that voted against the deal represent 60,000 rail workers, including the largest rail union, SMART Transportation Division. And the 12 unions have agreed to honor each other’s picket lines. That sets up the possibility of a strike beginning on December 9, when a “cooling off” period expires. 

The tentative agreement did secure significant pay increases for rail workers, raising wages by about 24% over 5 years. The unions, however, note that the increase does not even keep up with the pace of inflation. But wages don’t appear to be the primary sticking point. 

Railroad companies have adamantly refused to include any short-term paid leave. That means rail workers must report to work, even when they are sick, or forfeit their pay. “It’s an insane and cruel system, and these guys are fed up with it,” Peter Kennedy, chief negotiator for the maintenance workers union, which rejected the deal, said. Rail workers say that some colleagues come to work with COVID because they can’t afford to take time off. The maintenance workers are seeking a deal with at least four paid sick days. The railroad companies, according to the union, are unwilling to negotiate.

Rail workers have demanding jobs, often requiring them to be on the road for weeks at a time. Further, over the last six years, “major railroads have reduced their work forces by nearly one-third,” increasing the workloads for workers that remain.

On Monday, a coalition of hundreds of business groups, organized by the U.S. Chamber of Commerce, wrote to Congressional leaders and demanded they pass legislation prohibiting rail workers from striking. 

As provided for under federal law and consistent with past practice, Congress must be prepared to intervene before the end of the current “status quo” period on December 9 to ensure continued rail service should railroads and four unions fail to reach a voluntary agreement. A strike by any one union would assuredly result in a stoppage of national rail service.

But the corporate trade organizations that signed the letter helped create the current crisis. 

Among 22 highly-developed nations, the United States is the only one that does not require employers to provide paid sick leave. Spain requires 16 days of paid sick leave, Belgium provides at least one month, and the UK guarantees at least 28 weeks. For more than a decade, members of Congress have introduced legislation, the Healthy Families Act, that would require all businesses with at least 15 employees to provide seven paid sick days each year. If the Healthy Families Act were law, there would probably not be a looming strike because the railroad companies would be legally required to provide paid sick leave. 

The Healthy Families Act has not passed Congress “largely because corporate lobbyists mounted a fierce effort to block it.” In 2014, a column by staffers for the Employment Policies Institute, a corporate front group, asserted that “paid sick leave is a cure worse than the disease.” A permanent paid sick leave requirement was initially included in one of the coronavirus relief bills, but it was removed at the insistence of business groups and Republican lawmakers

Congress could avert a rail strike by passing the Healthy Families Act. Instead, corporate lobbyists are demanding that Congress prevent rail workers from securing paid sick leave through collective bargaining. 

In a statement released Monday evening, Biden urged Congress to give the railroad companies and corporate lobbyists what they want. 

I am calling on Congress to pass legislation immediately to adopt the Tentative Agreement between railroad workers and operators – without any modifications or delay – to avert a potentially crippling national rail shutdown.

…As a proud pro-labor President, I am reluctant to override the ratification procedures and the views of those who voted against the agreement. But in this case – where the economic impact of a shutdown would hurt millions of other working people and families – I believe Congress must use its powers to adopt this deal.

Congress has a variety of options. One possibility would be to impose a modified agreement that includes paid sick days. The railroad companies could certainly afford it. 

Providing 15 days of paid sick leave would cost the industry roughly $688 million per year, according to the rail companies. But with railroad profit margins at record highs, this cost would hardly harm profitability.

BNSF, one of the largest railroad freight carriers, saw its net income climb four percent to $4.5 billion in the first nine months of this year. Last year, the railway raked in $6 billion in profits, a 16% jump from the year prior.

Its parent company, Warren Buffett’s Berkshire Hathaway, also spent at least $32 billion since last year buying back stock. This tactic, which was considered a form of market manipulation until 1982, drives up stock prices by reducing the number of shares in the market. Company executives who derive most of their compensation from stocks have every incentive to invest corporate profits towards buybacks instead of workers. 

Last week, Buffett added $1.38 billion to his net worth in a single day after Berkshire Hathaway closed at a high price – that’s twice as much money as it would cost to fund 15 days of paid sick leave for every rail worker in the country. Buffett’s BNSF is notorious for penalizing workers for taking time off for “fatigue, family emergencies or illness.” Workers at the railway also say they’re expected to be on call 90% of the time, including throughout the night. 

Similarly, Union Pacific, the largest railroad in the U.S., said it had its “most profitable year ever in 2021,” reporting $6.5 billion in profits. More recently, the railway posted a net income of $5.4 billion for the first nine months of the year, an 11% increase from a year ago. Compared to 2000, the railway today employs 18,000 fewer workers but makes 85% more in revenue. Since 2021, the company has also spent nearly $13 billion repurchasing its own stock – enriching Union Pacific executives at the expense of their workers. 

CSX also reported a 15% increase in net earnings last quarter. The railway’s net income for the first nine months of the year reached $3.1 billion. It also reported spending $3.7 billion so far this year repurchasing shares. Norfolk Southern made a record $3 billion in income in 2021, a 27% increase from 2020. In the first nine months of 2022, the railway has surpassed where it was during the same time in 2021, increasing its net income to $2.5 billion

Meanwhile, as profits soar, some of the largest U.S. railroads have also significantly slashed their spending on labor over the years.

Source: More Perfect Union

“In 2001, the four railroads spent about $8.7 billion on compensation and benefits to generate $25.6 billion. In 2021 the companies spent 10% more on labor but brought in nearly double the amount of revenue,” More Perfect Union reports

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Normalizing white supremacy

Nick Fuentes in 2016 (WILLIAM EDWARDS/AFP via Getty Images)

Last week, Donald Trump — the former president and leading candidate for the Republican nomination in 2024 — had dinner at his Mar-a-Lago club with one of the nation’s most prominent white supremacists and antisemites, Nick Fuentes. In recent episodes of his podcast, Fuentes has called “for the military to be sent into Black neighborhoods” and demanded “that Jews leave the country.” He is also a Holocaust denier and compared the murder of Jews in Nazi Germany to baking cookies. Fuentes rose to prominence after he participated in the 2017 white nationalist march in Charlottesville. “You can call us racists, white supremacists, Nazis, & bigots…But you will not replace us,” Fuentes said after the violent demonstration. “The rootless transnational elite knows that a tidal wave of white identity is coming.”

In response to Trump breaking bread with an unrepentant racist, top Republican elected officials have said nothing. 

The silence of Congressman Kevin McCarthy (R-CA), who is seeking to be elected as the next House Speaker, is particularly notable. McCarthy is very familiar with Fuentes and his abhorrent views. In February, Congresswoman Marjorie Taylor Greene (R-GA) and Congressman Paul Gosar (R-AZ) participated in a white nationalist convention hosted by Fuentes. McCarthy told reporters that Greene and Gosar’s association with Fuentes was “appalling and wrong” because “Republicans should not be associated, any time, any place, with somebody who is anti-Semitic.” But McCarthy has not said anything publicly about Trump’s dinner with Fuentes, and his office did not respond to a request for comment. 

Today, Republicans have a very narrow House majority, and McCarthy needs the support of Republican members of Congress that are loyal to Trump (and potentially sympathetic to Fuentes) to be elected Speaker. McCarthy claimed to be appalled by Fuentes but is willing to look the other way if that is what it takes to gain power. 

Other Republican leaders have taken a similar approach. In February, after Taylor Greene and Gosar participated in Fuentes’ conference, Senate Republican Leader Mitch McConnell (R-KY) said there is “no place in the Republican Party for white supremacists or anti-Semitism.” In response to Trump’s dinner with Fuentes, McConnell has said nothing publicly and did not respond to a request for comment. McConnell needs the backing of Trump loyalists in the Senate to maintain his leadership post. 

Congressman Jim Banks (R-IN), a Trump loyalist contemplating a run for Senate, blasted Taylor Greene and Gosar last February. “It’s unbecoming for a member of Congress to speak at an event that’s promoted by anyone who espouses those views,” Banks said. But Banks has remained silent in the wake of Trump’s dinner with Fuentes and did not respond to a request for comment. 

The other members of Republican Senate leadership — Senators John Thune (R-SD), John Barrasso (R-WY), Joni Ernst (R-IA), Shelley Moore Capito (R-WV) — have said nothing about Trump’s personal meeting with a white supremacist. The same goes for the rest of the Republican House leadership — Steve Scalise (R-LA), Tom Emmer (R-MN), Elise Stefanik (R-NY), and Richard Hudson (R-NC). 

The silence delivers a loud message: Republicans are willing to countenance white supremacy and anti-Semitism if that is what it takes to maintain power and stay in the good graces of Trump. 

In response to critical media coverage, Trump claimed that he “knew nothing about” Fuentes. According to Trump, he invited Kanye West to dinner, and West brought Fuentes along unannounced. Trump described the dinner as “quick and uneventful.” West has embraced anti-semitism in recent weeks, tweeting that he was prepared to go “death con 3” on “the Jews.” 

Claiming ignorance is a tactic Trump has used previously to avoid criticizing white supremacists that support him politically. In 2016, Trump was endorsed by notorious former KKK grand wizard David Duke. In an interview with CNN, Trump refused to repudiate the endorsement, claiming that he didn’t “know anything about David Duke” and didn’t “know anything about what you’re even talking about with white supremacy.” Asked if he would condemn the white supremacists that support him, Trump said he would need to “do research on them and certainly I would disavow if I thought there was something wrong.” 

Trump’s claim that he didn’t know anything about Duke was not credible. He had disavowed Duke when he was contemplating a run for President as a Reform Party candidate in 2000. In August 2015, shortly after his initial campaign launched, Trump said he “wouldn’t want [Duke’s] endorsement.” 

Similarly, Trump’s alleged unfamiliarity with Fuentes is suspect. One of Fuentes’ closest associates is far-right provocateur Michelle Malkin. In May 2020, Trump retweeted a clip from Fuentes’ internet show, America First Clips, supporting Malkin. (The American First Clips account was subsequently banned from Twitter.) At the time, Malkin was under fire for defending Fuentes and other racists. 

In February 2022, Trump’s own social media network, Truth Social, verified Fuentes’ account. Fuentes has been banned from most other networks, including those catering to the right wing. Since his dinner last week, Trump has not said anything negative about Fuentes or expressed any regret about his decision to have dinner with him. 

Notably, Taylor Greene also defended her participation in Fuentes’ February event by claiming she was unfamiliar with Fuentes. “I do not know Nick Fuentes. I have never heard him speak, I have never seen a video,” Taylor Greene said. “I do not know what his views are so I am not aligned with anything that is controversial.” Republican leaders were not convinced and condemned her anyway. Trump is being treated differently. 

Several major media outlets have granted sympathetic operatives anonymity to defend Trump. These operatives use the cloak of anonymity to engage in speculation or simply repeat claims made by Trump himself. Axios’ story on the dinner included this passage, repeating Trump’s dubious claim that he didn’t know anything about Fuentes before the dinner:

Trump at one point turned to [West] and said, “I really like this guy. He gets me,” according to the source.

“To be honest, I don’t believe the president knew who the hell [Fuentes] was,” the source added.

The Society of Professional Journalists cautions against the use of anonymous sources and says if an anonymous source is used, “the reporter owes it to the readers to identify the source as clearly as possible without pointing a figure at the person who has been granted anonymity.” Axios provides no information about this source. 

A similar passage was included in NBC’s report:

A person familiar with the dinner conversation who is not involved in Trump’s presidential campaign and two Trump advisers briefed on the dinner corroborated Trump’s claim that he didn’t know Fuentes’ identity when they dined together. The three sources spoke on condition on anonymity given the nature of the controversy.

The Washington Post makes an unsourced assertion about what Trump has been telling aides, but does acknowledge that even some aides are skeptical:

Trump has insisted to aides since Tuesday that he did not know Fuentes, a Trump supporter active on Truth Social, the former president’s social media network, though some in his circle said they were skeptical.

All of these reports lack the full context of Trump’s denials, including his history of suspect claims of ignorance, his defense of Malkin, and his retweet of Fuentes’ video. 

Trump’s dinner with Fuentes cannot be understood in isolation. Rather, it is part of Trump’s extensive history of defending, promoting, and encouraging white supremacists. 

In a September 2020 debate, Trump was asked repeatedly if he was willing to condemn white supremacists. Trump demurred, claiming that he thought the real problems was “from the left wing, not the right wing.”

WALLACE: [A]re you willing, tonight, to condemn white supremacists and militia groups and to say that they need to stand down and not add to the violence in a number of these cities as we saw in Kenosha and as we’ve seen in Portland? Are you prepared to specifically do that?

TRUMP: Sure, I’m prepared to do that. But I would say almost everything I see is from the left wing, not from the right wing. If you look, I’m willing to do anything. I want to see peace.

Pressed again, Trump resisted condemning white supremacists. Instead he asked for a “specific group” to condemn. When Biden suggested the Proud Boys, “a right-wing extremist group with a violent agenda” that includes “members [who] espouse white supremacist and antisemitic ideologies,” Trump told them to “stand down and stand by.” The Proud Boys were thrilled and put Trump’s response on t-shirts. 

Shortly after losing the 2020 election, Trump “appointed two men with well-documented white nationalist ties to government roles.” One appointee was Darren Beattie, “a former White House speechwriter fired in 2018 after it was revealed he’d spoken at a white nationalist conference.” Beattie was appointed to the “Commission for the Preservation of America’s Heritage Abroad.” The other appointee was Jason Richwine, “a policy analyst pushed out of a conservative think tank for writing that Mexican and other Latino immigrants have lower IQs than white people.” Richwine was appointed to “a senior position at the National Institute of Standards and Technology (NIST).”

Most famously, Trump defended some of the participants in the 2017 white supremacist march in Charlottesville, which resulted in the murder of a counter-protester. Trump, however, claimed that some of the marchers were “very fine people.”

Five years later, he had dinner with one of the white supremacist marchers on his patio at Mar-a-Lago. 

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LEVER WEEKLY: Medicare Disadvantage

This is Lever Weekly, a recap of our work from the past week. If you only read one email from us all week, this should be it.

Below you will find a breakdown of our reporting, podcasts, videos, and live events — a feature now open to all subscribers. Following that, we are providing paid subscribers with an original column, written by a member of The Lever, connecting the dots on our coverage to deliver important takeaways.

In this week’s column, exclusively for paid subscribers, Matthew Cunningham-Cook explores the privatization of the country’s national health insurance program for seniors under the guise of Medicare Advantage — and why it’s a catastrophe of epic proportions, even though corporate media refuses to see it that way.

Stuff The Lever Reported This Week:

Why Is AARP Boosting Medicare Privatization?“The state of affairs lays bare a conflict inside AARP, the major advocacy organization for Americans 50 and older, over how to approach the regulation of Medicare Advantage, the for-profit version of Medicare.”

Ticketmaster Faces The Music“The online ticketing giant Ticketmaster has been using its monopoly power for years to abuse artists, fans, and venues alike — but now, thanks to a perfect storm of political and cultural factors, not to mention an army of Taylor Swift fans, it could face a long-overdue government thumping.”

YOU LOVE TO SEE IT: Amazon Ordered To Cease And Desist “This decision is a massive victory for Amazon workers nationwide — protection from retaliation is especially important as those workers enter the grueling peak season in Amazon’s warehouses.”

Stuff To Watch & Listen To:

LEVER TIME: Ticketmaster’s Monopoly vs. Taylor Swift Fans“With the help of Eve 6 frontman Max Collins, we break down last week’s Ticketmaster incident involving an army of Taylor Swift fans, who it turns out may be our best hope for antitrust enforcement.”

LEVER TIME PREMIUM: Gary Hart On The State Of American Politics“David sits down with former U.S. Senator and presidential candidate Gary Hart for a long-form conversation about the evolution of American politics and his new book about saving American democracy.” (This week’s segment is open to everyone.)

Medicare Disadvantage

By Matthew Cunningham-Cook

This week, I reported on chicanery behind senior advocacy group AARP — responsible for advocating for its 38 million members — selling Medicare Advantage plans, and making up to $800 million last year while doing so. All the while, their advocacy arm in Washington is soft-pedaling any critiques of Medicare Advantage, while hospital lobbyists join public interest advocates in demanding reforms to the program.

Medicare, the government health insurance program for those over 64 as well as those with a disability status, is extraordinarily popular, with 94 percent of Medicare beneficiaries supporting the program. But Medicare Advantage, the for-profit version of Medicare, has proved to be detrimental to Medicare patients and taxpayers alike. A recent report by the Inspector General of the Health and Human Services Department found that 18 percent of claims denied by Medicare Advantage plans in one week in June 2019 were done so wrongfully. Meanwhile, these plans are systematically overbilling the government.

As of now, there are 29 million Americans on Medicare Advantage — or about 48 percent of all Medicare beneficiaries. And that number is growing all the time: By next year, a majority of America’s seniors will be on these privatized Medicare plans.  

Most corporate news outlets have avoided scrutinizing the growth of Medicare Advantage, likely deeming it not “sexy” enough to capture attention or clicks. Maybe even worse, The New York Times recently covered the differences between Medicare and Medicare Advantage in a fluffy service piece, blithely weighing the pros and cons of the wholesale privatization of one of the country’s most sacrosanct institutions in the same way it compares brands of underwear and ice scrapers.

Read the full story

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YOU LOVE TO SEE IT: Amazon Ordered To Cease And Desist

Good things are happening! A federal judge is turning up the heat on Amazon over its labor practices. Meanwhile, Los Angelenos deal a blow to corporate landlords, food delivery workers will see a much-anticipated raise, and the country’s electric bus fleet is about to quadruple.

All this and much more in this week’s edition of You Love To See It below, a weekly feature reviewing good news, progress, and action steps that’s one of the many features available only to Lever supporting subscribers.

Amazon Workers Score Needed Win

Last Friday, a federal judge filed a cease-and-desist order against Amazon, demanding that the country’s second largest employer stop firing employees for union organizing.

The court order was a response to a petition filed by Gerald Bryson, a former Amazon employee who was illegally fired for protesting how Amazon endangered workers during the pandemic in 2020. The court order demands that Amazon immediately stop “discharging employees because they engaged in protected concerted activity” and “in any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed to them by Section 7 of the National Labor Relations Act.”

Bryson has not yet been reinstated.

“This decision is a massive victory for Amazon workers nationwide — protection from retaliation is especially important as those workers enter the grueling peak season in Amazon’s warehouses,” said Analilia Mejia and DaMareo Cooper, co-executive directors of the Center for Popular Democracy Action, in a statement. “Nonetheless, continuing to keep Gerald Bryson out of work at this point is a travesty of justice.”

Food Delivery Workers Get Pay Boost

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🎧 LEVER TIME PREMIUM: Gary Hart On The State Of American Politics

🎧 LEVER TIME PREMIUM: Gary Hart On The State Of American Politics

Nov 23, 2022

Frank Cappello

On this week’s Lever Time Premium: David breaks down the recent Ticketmaster debacle, explores a recent victory against dark money, and interviews former U.S. Senator and presidential candidate Gary Hart.

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🎧 LEVER TIME: A Victory Against Dark Money

In the new episode of our  weekly podcast Lever Time, David Sirota discusses one of the country’s first-ever dark money disclosure laws passed during the recent midterms — Arizona Proposition 211 — and speaks with former Arizona Attorney General Terry Goddard, who has spent the better part of the last decade fighting to get the law passed (4:37).

In addition, David is joined by Jordan Uhl, who has been covering last week’s Ticketmaster debacle in which thousands of Taylor Swift fans learned the hard way what happens when antitrust law isn’t enforced. The two were also joined by Max Collins, frontman for the rock band Eve 6, who has firsthand experience with the abusive practices of the giant corporations that now control the music industry (25:46).

Click here for a rough transcript of the episode.


BONUS: In the spirit of the holidays we’re taking down the paywall for Lever Time Premium (the extended version of Lever Time which is usually available only to supporting subscribers) and sharing this week’s bonus segment with everyone. This past week, David sat down with former U.S. Senator and presidential candidate Gary Hart for a long-form conversation about the evolution of American politics since the late 1980s, and his new book about saving American democracy (52:11).

To get access to Lever Time Premium and all of its bonus content, go here.

If you like this episode, feel free to pitch into the tip jar — it helps us do this kind of reporting:

We hope you enjoy our weekly podcast — it’s the next step in our plan to build a powerful independent voice to take on corporate media.

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🎧 LEVER TIME: Ticketmaster’s Monopoly vs. Taylor Swift Fans

In the new episode of our  weekly podcast Lever Time, David Sirota is joined by Jordan Uhl, who has been covering last week’s Ticketmaster debacle in which thousands of Taylor Swift fans learned the hard way what happens when antitrust law isn’t enforced. The two were also joined by Max Collins, frontman for the rock band Eve 6, who has firsthand experience with the abusive practices of the giant corporations that now control the music industry (25:46).

In addition, David discusses one of the country’s first-ever dark money disclosure laws passed during the recent midterms — Arizona Proposition 211 — and speaks with former Arizona Attorney General Terry Goddard, who has spent the better part of the last decade fighting to get the law passed (4:37).

Click here for a rough transcript of the episode.


BONUS: In the spirit of the holidays we’re taking down the paywall for Lever Time Premium (the extended version of Lever Time which is usually available only to supporting subscribers) and sharing this week’s bonus segment with everyone. This past week, David sat down with former U.S. Senator and presidential candidate Gary Hart for a long-form conversation about the evolution of American politics since the late 1980s, and his new book about saving American democracy (52:11).

To get access to Lever Time Premium and all of its bonus content, go here.

If you like this episode, feel free to pitch into the tip jar — it helps us do this kind of reporting:

We hope you enjoy our weekly podcast — it’s the next step in our plan to build a powerful independent voice to take on corporate media.

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All corporations want for Christmas is a $131 billion tax cut

In 2017, with Trump in the White House, Republicans in Congress passed a massive tax cut for corporations, reducing the basic corporate tax rate from 35% to 21%. From there, corporations have an assortment of deductions and credits to reduce their tax bill further. Between 2018 and 2020, the three tax years following the corporate tax rate cut, “39 profitable corporations in the S&P 500 or Fortune 500 paid no federal income tax.” Corporations that paid nothing in federal income taxes over those three years include Duke Energy, FedEx, and T-Mobile. 

In 2021, more of the nation’s largest corporations, including AT&T, Charter Communications, and Dow Inc., are paying nothing in federal income taxes. Other highly profitable corporations are paying very low rates, including General Motors (0.2%), Ford (1%), Exxon Mobil (2.8%), Nike (5.9%), and Amazon (6.1%). While major corporations are paying these low rates, corporate profits are soaring to record highs.

To reduce the enormous cost of the 2017 tax cuts, the law made some technical changes to certain business tax deductions beginning in 2022. The most prominent change involved how businesses could deduct spending on research and development (R&D). Starting this year, businesses cannot deduct the full cost of R&D immediately. Instead, they must spread out the cost over five tax years, a process known as amortization. (A separate tax credit for R&D remains unchanged.) 

This change in the R&D tax deductions was put in place by Republicans in Congress (no Democrats voted for the bill) and signed into law by Trump. The overall legislation was enthusiastically supported by corporate America. 

But now, the same corporations that cheered the legislation are warning of “grave harm” if the change in how R&D spending goes into effect. A letter to Congressional leaders, signed by the CFOs of 178 companies, says that “the current playing field is tilted against the U.S., and every day this policy continues to be in place makes it harder for the U.S. to remain a global leader in innovation.” Several signatories of the letter represent corporations that have paid no income taxes in recent years. 

Giving these corporations what they want will cost the federal government $131.3 billion over 10 years. But there is little evidence that the R&D tax deduction meaningfully increases R&D spending or useful innovation. Rather, “[e]vidence suggests that a significant portion of increased R&D spending may be driven by reclassification of existing activity.” A 2019 paper in the Journal of Accounting and Public Policy found “found that creative categorization of some corporate spending as qualified R&D expenses can be an effective tax avoidance technique for companies to use.”

While corporations are arguing that the immediate deduction of R&D expenditures is necessary to incentivize R&D spending, they are also urging Congress to make the change retroactive. They want the federal government to refund $29.1 billion in estimated taxes corporations paid this year. Since this R&D spending has already occurred, it is not an incentive but a corporate giveaway. 

“We’re hoping, again, [that] we’re going to get a tax law change here at the end of the year with tax extenders which, as you know, will give us a refund of the $1.5 billion that we’ve already paid,” Raytheon CEO Gregory Hayes said during an earnings call last month. Raytheon had $3.9 billion in profits in 2021. It is projecting higher sales and profits for 2022. 

Last week, the U.S. Chamber of Commerce — which represents virtually every major corporation in the United States —  listed its legislative priorities for the remainder of the year. The extension of immediate deduction of corporate R&D spending is prominently featured. The group claims that allowing amortization to take effect “would increase the cost of doing business for American companies at a time when they are suffering persistent, record-high inflation.” But large American companies that benefit from favorable tax treatment of R&D spending are not “suffering” from inflation. Rather, they are enjoying record profitability. 

The American Rescue Act, passed in March 2021, expanded the child tax credit. It increased the amount of the deduction, made it fully refundable regardless of income, and provided it as a monthly benefit instead of forcing families to wait for a tax refund. 

The expanded child tax credit kept 3.7 million children out of poverty. The monthly payments were spent “on basic household needs and children’s essentials: the most common item is food.” After two months of payments, “2 million fewer adults report[ed] that their children, specifically, did not have enough to eat.” Overall, child poverty rates were cut in half to the lowest level on record.

The child tax credit has traditionally “enjoyed bipartisan support.” But many Republicans in Congress turned against expanding the credit after Biden embraced it. The U.S. Chamber of Commerce specifically argued against extending the expanded child tax credit, saying it was concerned about “large amounts of transfer payments that are not connected to work.” That argument won the day, plunging millions of kids back into poverty

Earlier this month, a group of 58 progressive members of Congress wrote leadership and urged them not to extend full deduction of corporate R&D spending without also helping families. The signatories describe the change to how R&D spending is deducted as “one of the few provisions that helped level the playing field by increasing corporate taxes.” They noted that Biden’s original Build Back Better proposal included a 4-year delay of changes to R&D deductions. But that delay was “included as part of a comprehensive framework that provided major economic and tax-related support for working families while pursuing historic advances in the longstanding Democratic priority to make the wealthy and large corporations finally pay their fair share in taxes.”

A separate letter by 51 centrist Democrats to Democratic leadership claims allowing the change to R&D expensing to go into effect “will hurt U.S. economic competitiveness [and] stifle the innovation that has powered our economy.” But this group also urged leadership to pair any change to R&D expensing with an extension of “the enhanced [child tax credit] so American families and children have the resources and opportunities to flourish.”

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Trump's paymaster

Former U.S. President Donald Trump and Yasir al-Rumayyan, head of the sovereign wealth fund of Saudi Arabia (Photo by Cliff Hawkins/Getty Images)

On Tuesday night, Trump announced he was running for president for the third time. The coverage of his announcement was broadly critical, focusing on the poor results of the candidates he endorsed in the 2022 midterms. Reports also noted some other issues complicating Trump’s run, including his role in fomenting an insurrection and the federal criminal investigation into his handling of classified documents. 

These stories virtually ignored one of the most significant developments since Trump left the White House: his expanding financial relationship with Saudi Arabia. Since Trump left office, entities controlled by the Saudi government, a repressive regime responsible for the murder of U.S.-based journalist Jamal Khashoggi, have sent billions to Trump and his family members. 

Trump’s candidacy for president raises the prospect of a major party nominee that is on the payroll of a foreign government.

The Saudi Public Investment Fund (PIF) has spent billions creating LIV, a new golf tour. Two of LIV’s eight tournaments in 2022 were held at Trump-owned golf courses, including the season-ending championship at Trump Doral in Florida. At one event, Trump participated in the pro-am tournament with two of LIV’s highest-profile players — Dustin Johnson and Bryson DeChambeau — and Yasir Al-Rumayyan, the governor of PIF.

PIF also funds the Aramco Team Series on the Ladies European Tour. In October 2022, the series held an event at Trump’s Ferry Point Golf Course in New York. Another LIV event will reportedly be held at Trump’s golf course in Virginia in May 2023. The tournaments at Trump’s courses doubled as political events, with right-wing luminaries like Tucker Carlson and Congresswoman Marjorie Taylor Greene (R-GA) in attendance. 

These Saudi-financed tournaments were a critical injection of money and exposure for Trump’s courses. The PGA Tour ended its annual tournament at Trump Doral in 2017 and moved 2022 PGA Championship from Trump Bedminister in New Jersey after the attack on the Capitol on January 6, 2021. 

The Saudis, through PIF, paid Trump an undisclosed sum for the use of his courses. Trump, for his part, was very happy about the deal. “It’s big time and it’s big-time money,” Trump said in October. “It’s unlimited money. They love golf, and the Saudis have done a fantastic job.” Trump also casually dismissed Saudi Arabia’s record of human rights abuses. “We have human rights issues in this country, too,” Trump said. 

Due to the widespread perception that LIV is an effort to “sports wash” Saudi Arabia’s reputation, LIV has struggled to find a TV network willing to broadcast its tournaments. In August, the Sports Business Journal reported that Trump’s son-in-law, Jared Kushner, was making calls “to try to help the controversial Saudi-backed LIV Golf tour secure a media-rights deal.” Kushner reportedly “called one of the top execs at Paramount, which owns CBS, to try to jump-start negotiations.” 

The financial dependence of Trump and his family on Saudi Arabia extends far beyond LIV. 

After leaving the White House, Kushner sought investors for a $7 billion private equity fund. Kushner had no prior experience managing private equity. Prior to entering the White House, his most significant business experience was nearly bankrupting his family real estate company by purchasing an aging office building in New York for $1.8 billion.

Kushner pitched the Saudi PIF. The committee at the PIF responsible for vetting investments recommended rejecting Kushner. An internal document, published by the New York Times, summarized the objections:

[O]bjections included: “the inexperience of the Affinity Fund management”; the possibility that the kingdom would be responsible for “the bulk of the investment and risk”; due diligence on the fledgling firm’s operations that found them “unsatisfactory in all aspects”; a proposed asset management fee that “seems excessive”; and “public relations risks” from Mr. Kushner’s prior role as a senior adviser to his father-in-law, former President Donald J. Trump, according to minutes of the panel’s meeting last June 30.

The full board of PIF, led by Saudi Crown Prince Mohammed bin Salman, overruled the committee’s recommendation and decided to invest $2 billion. Under the deal, Kushner will receive a $25 million annual management fee, plus a percentage of any profits. 

Some members of the PIF board recommended reducing the size of the investment to limit the risk. But that proposal was rejected because the purpose of the investment, according to internal documents, was “to form a strategic relationship with the Affinity Partners Fund and its founder, Jared Kushner.” Making a smaller investment,  “may negatively or fundamentally affect the framework of the agreed strategic and commercial relationship.”

Ivanka Trump did not attend her father’s campaign announcement at Mar-a-Lago. Afterward, she released a statement, saying she is prioritizing “my young children and the private life we are creating as a family.” She said that she will no longer “be involved in politics.” Kushner, Ivanka’s husband, was in attendance. 

Another Trump ally, former Treasury Secretary Steven Mnuchin, started his own private equity fund and raised $2.5 billion, including a large investment by PIF. Mnuchin was “one of the first Western government officials to meet with Saudi Crown Prince Mohammed Bin Salman, chair of the [PIF], in the wake of the murder of journalist Jamal Khashoggi.”

Earlier this week, Trump “struck a deal with a Saudi-based real estate company to license its name to a housing and golf complex that will be built in Oman.” The agreement was made “with Dar Al Arkan, one of Saudi Arabia’s largest real estate companies, for the project.” Under the arrangement, Trump will receive “a cut of condo sales or golf course revenue in exchange for allowing its name to be used.” The proceeds could be considerable since the project is estimated to cost $1.6 billion and “will include an estimated 3,500 residential units, luxury retail and 450 rooms at the hotels.” 

While Dar Al Arkan is technically a private company, it is closely associated with the Saudi government. The first page of its annual report features the Saudi King and Crown Prince. Robert Weissman, the president of Public Citizen, called the arrangement “another in a series of sweetheart deals from the Saudi government to the Trump family.”