GOP accuses Dems of stalling Kavanaugh over document requests
GOP accuses Dems of stalling Kavanaugh over document requests
Jennifer Epps-Addison, network president at the grassroots Center for Popular Democracy, stressed that public access to...
Jennifer Epps-Addison, network president at the grassroots Center for Popular Democracy, stressed that public access to Kavanaugh's legal opinions and documents from his time in the Bush administration is "the bare minimum of transparency Americans should expect before confirming a Supreme Court nominee."
Read the full article here.
How Can We Combat Wage Theft And Protect Immigrant Workers?
How Can We Combat Wage Theft And Protect Immigrant Workers?
Every year, millions of workers suffer from wage theft when employers or companies do not pay them what they are owed....
Every year, millions of workers suffer from wage theft when employers or companies do not pay them what they are owed. Wage theft, which costs America’s low-wage workers an estimated $50 billion each year, comes in different forms. An employer could keep customer tips instead of paying them out to workers, force employees to work off the clock without compensation, or illegally deduct the cost of uniforms or work tools from employees’ paycheck.
Read the full article here.
Fed Up Statement: Market Turmoil Should Remind Fed that Economy Is Too Weak to Slow It Down
Shawn Sebastian, Policy Analyst at the Center for Popular Democracy, released the following statement on behalf of the...
Shawn Sebastian, Policy Analyst at the Center for Popular Democracy, released the following statement on behalf of the Fed Up campaign:
“The Fed Up campaign has been saying for more than a year that the economy is too weak to warrant interest rate hikes. Although the stock market was performing well and Wall Street was reaping major profits, the real economy has seen stagnant wages and insufficient job growth.
“The past week’s events vindicate our argument. The economy is too weak, and the performance of the stock market is not a legitimate basis for making interest rate decisions. Just as the market inflated itself over previous months, and witnessed a “correction” recently, it will likely continue to fluctuate in the months ahead. Fed officials who pointed to an inflated stock market as a justification to raise interest rates have been proven wrong: the health of the economy should be measured by the labor market, not the stock market, and the labor market is far from recovered.
“The Fed must continue focusing on the fundamentals: building a labor market that works for all communities, and that features rising wages and good jobs for everybody who wants to work. Creating genuine full employment is the Fed’s mandate, and the past few days vindicate the message that the Fed Up campaign’s worker leaders and economists have said all along: this economy is far too weak for the Fed to intentionally slow it down.”
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The Center for Popular Democracy promotes equity, opportunity, and a dynamic democracy in partnership with innovative base-building organizations, organizing networks and alliances, and progressive unions across the country. CPD builds the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial justice agenda.
Immigration Advocates on SB 4: We’re Resisting in Texas
Immigration Advocates on SB 4: We’re Resisting in Texas
Grassroots leaders and local officials wasted little time organizing a coordinated campaign to fight SB 4, a new Texas...
Grassroots leaders and local officials wasted little time organizing a coordinated campaign to fight SB 4, a new Texas law that targets cities, towns and sheriffs that don’t cooperate with federal immigration enforcement.
Only nine days after Texas Republican Gov. Greg Abbott signed the legislation, formally known as Senate Bill 4, into law, grassroots advocates announced a “Summer of Resistance” campaign May 16. The statute allows police officers, sheriff deputies and Texas state troopers to ask about a person’s immigration status – whether they are here legally – during a routine stop.
Read the full article here.
Minneapolis Fed chief Neel Kashkari calls some racial disparity 'a crisis'
Minneapolis Fed chief Neel Kashkari calls some racial disparity 'a crisis'
Community organizer Wintana Melekin was grabbing a soda in late June at a coffee shop near her office when she heard...
Community organizer Wintana Melekin was grabbing a soda in late June at a coffee shop near her office when she heard Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis, had just been in.
Seeing her chance, she dashed out the door after Kashkari, caught up and asked if he would meet with her organization, Neighborhoods Organizing for Change, to discuss racial and economic disparities in the Twin Cities.
He agreed, and to confirm that he meant it, retweeted Melekin’s tweet saying he was willing to meet.
On Wednesday, the meeting happened. Kashkari sat down with about a dozen people at NOC’s offices in north Minneapolis and committed to an ongoing collaboration between the Minneapolis Fed and some of the state’s most outspoken critics of a status quo in which blacks are not enjoying the benefits of economic growth.
“Some of the racial disparities are a crisis, and we need to treat them like a crisis,” Kashkari said. “One of the things I learned in 2008 is you don’t tackle a crisis with incremental solutions. You tackle a crisis with overwhelming force, and so if this is a crisis, and I think certainly parts of this are, then we need to bring overwhelming force.”
Kashkari, who became president of the Minneapolis Fed at the start of the year, is a former investment banker and Treasury official in the George W. Bush administration. He was appointed the first chief of the bank bailout program known as TARP at the end of the Bush term and start of President Obama’s administration.
Though his everyday work is at the very top of the national economy, Kashkari has a record of trying to understand its depths. As a candidate for governor in California two years ago, Kashkari spent a week living on the streets of Fresno, a midsize city, with just $40. He tried unsuccessfully to find work during that week and wound up in a homeless shelter.
It’s not clear how Kashkari and the nation’s central bank can directly address the challenges that were brought up at Wednesday’s meeting. The Fed controls interest rates, with the goal of creating maximum employment, but monetary policy can’t be targeted at segments of the population or certain states or cities. As Kashkari pointed out, black unemployment in the United States stubbornly tracks at roughly twice the level of white unemployment.
“There’s something structural in the U.S. economy, in good times and bad, that black unemployment is almost always twice as high as white unemployment,” Kashkari said.
He said driving unemployment downward will help everyone, and he is for low interest rates as long as they aren’t driving inflation upward. But he has not heard a satisfying answer for why the disparity in Minnesota is worse than in most places, though he committed to working with NOC to understand why it is.
From NOC’s perspective, the meeting with Kashkari was historic. Never before has a Fed president met face to face with its members in Minneapolis. As local ambassadors for the national Fed Up campaign, the organization has a fresh interest in the Fed and has taken the position that interest rates should remain low.
For Anthony Newby, the head of the organization, the meeting was a good starting point. Kashkari’s comment that the economic plight of black Minnesotans is a crisis requiring a response of “overwhelming force” was particularly satisfying.
“It sets the tone for how the Fed could, in unusual and unorthodox ways, use its power and position to solve some of these equity problems,” Newby said.
Kashkari agreed to spend a day with Rosheeda Credit, a mother of five at the meeting who said she struggles to pay for rent and child care. “The crime rate is high here, and the rent is high here and we’re not getting paid enough to work here,” Credit said.
He heard from Tenice Hodges, a former teacher who moved back to Minneapolis two months ago to help her sister’s family. She is living out of her car until she can get a teaching job because she can’t afford the city’s high rents with her restaurant wages.
“We are struggling out here,” Hodges said. “Yes, I’m employed. I work every day. But can I go out and get an apartment right now? No. I don’t have $1,100 by myself, or $2,200 for a deposit.”
Kashkari committed to looking closely at the résumés of people of color that NOC submitted for various board appointments at the Minneapolis Fed. He also said he will work with NOC on research and meet with people from the organization again in the future. He also committed to attending a workshop put on by groups affiliated with NOC at the Jackson Hole Economic Policy Symposium, an annual conference in Wyoming where central bankers from around the world gather.
Kashkari, who has drawn national attention by calling for a transformative solution to the problem of banks that are too big to fail, explained that his role as a regional Fed president is to understand the problems people face in his district. While the tools of monetary policy are limited, and much of the heavy lifting that causes social change much happen in Congress, he said it is important for him to meet with people as he did Wednesday to understand their concerns.
“I appreciate that you think it is business as usual,” Newby told Kashkari. “I don’t think it is business as usual.”
By ADAM BELZ
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New Orleans experience a warning to Texas
Behind Frenemy Lines - May 10, 2014, by Jason Stanford - This is a typical day for Greg Abbott’s gubernatorial bid: He...
Behind Frenemy Lines - May 10, 2014, by Jason Stanford - This is a typical day for Greg Abbott’s gubernatorial bid: He goes into the office, screws up his own campaign and goes home. If it weren’t for his mistakes—Ted Nugent, thanking a supporter who called Wendy Davis “retard Barbie”, calling South Texas a “Third-World Country”, and his bungled opposition to equal pay come to mind—Abbott would seem to have no campaign at all. But it’s when you separate the wheat from the gaffe on education that Abbott’s campaign looks like a disaster waiting to happen.
The negative coverage of Abbott’s education plan—and boy howdy has there been a lot—is focused on Abbott’s mistakes. His education plan cites Charles Murray, whose retrograde views on race and gender got him called a “White Nationalist” by the Southern Poverty Law Center. On page 20, his plan calls for “standardized tests” in pre-K. As a dodge, his campaign spokesmanclaimed that was in the plan “for informational purposes only.” And then he cancels campaign events at public schools when the Davis campaign points out that the schools are suing him over funding cuts.
But behind this façade of denials, backpedaling, and obliviousness sits the luckiest man in American politics, because almost no one has bothered to discuss his idea to create “takeover districts” for low-performing schools. He has reportedly modeled his plan on the privatization reforms in New Orleans.
That last bit should scare you. Education reformers—that is, those who think private charters would do better than public schools at educating poor children—call the Recovery School District in New Orleans a success. If the RSD is a success, I’m the third baseman for the Baltimore Orioles. No matter how much I wish that to be true, the facts say otherwise. Here’s why:
No one argues that schools in New Orleans were turning out Harvard scholars by the boatload, so the legislature created the RSD, a takeover district as Abbott has conceived. Davis also supports recovery districts, but Abbott likes the New Orleans model in which “failing” schools would be run by private charters that promised to get the schools shipshape and back into the public school system within five years.
Before taking a look at the results, we must first figure out what “failure” means, because they keep moving that target. RSD used to takeover any school that failed to get a passing score of 60 on the state performance index. After Katrina, the legislature changed that to allow RSD to scoop up any school that fell short of the state’s 87.4 average. The New Orleans private charter district took over 94 schools, 26 of which met the old passing standard. The state redefined failure to mean below average so more schools could get privatized.
Almost a decade later, the takeover district in New Orleans has failed to turn around even one school, so “improvement” became the new goal. Not one school has received an “A” or even a “B” grade. In fact, RSD stopped disclosing the grades their schools received, preferring to publicize percentages of improvement without disclosing the underlying data or that they were cherry-picking the data every year, making it impossible to honestly chart progress. By their original standards, though, all the RSD schools are still failing.
Remember, Louisiana was throwing millions of tax dollars at what were essentially startup small businesses. Fraud and bankruptcy are commonplace, and if you think that’s confined to New Orleans, think again.
Integrity in Education and the Center for Popular Democracy looked at 15 states that have charter schools, one of which was Texas and found “rampant fraud, waste and abuse,” according to a report released last week. The two groups found numerous cases of embezzlement, misuse of tax dollars, child endangerment, bilking taxpayers for services not rendered, inflated enrollment numbers, and general mismanagement. Private charters are running schools like a business. Unfortunately, that business is Wall Street.
It’s never the schools in the wealthy neighborhoods that get taken over. On average, poor children score worse than their wealthier peers. We have always known that, but we cannot get poor children to achieve in school simply by insisting they act like wealthy children.
Now Abbott is using the false dogma of education reform as cover to give up on public schools. Giving up on public schools will not fix public schools, but if Abbott becomes governor, he’ll go into the office every morning, screw up public schools, and go home.
Don’t say you weren’t warned.
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Meet the Group of Feisty Urban Progressives Who Want to Transform the Country One City at a Time
The Nation - December 10, 2014, by Steve Early - A century ago, working-class radicals frustrated with the pace of...
The Nation - December 10, 2014, by Steve Early - A century ago, working-class radicals frustrated with the pace of change often scoffed at their more patient comrades in city government, calling them “sewer socialists.” The latter, however, numbered in the hundreds, and, in their heyday, were quite influential in cities both large and small. After being elected to municipal positions on the Socialist Party ticket, they labored mightily to improve local services, from public sanitation to street repair. They even encroached on private markets by expanding public housing and experimenting with municipal ownership of utilities.
The national expansion of popular democracy sought by these left-wing reformers was, sadly, never achieved under their party banner. But several decades later, their many ideas for putting government to work for the people found traction during the New Deal. Programs to promote social equality and economic opportunity first tested at the state or local level became a Depression-era lifeline for millions of Americans nationwide.
In the twenty-first century, many on the left still yearn for economic and policy victories on the scale of the 1930s and the emergence at the federal level of a counter-force that might one again curb the influence of corporate America. While waiting for that second coming, progressive activists have, like the “sewer socialists” of old, been forced to grapple with serious problems—national and even global in nature—at the municipal level instead.
Some of the bravest (or most ambitious) among them have sought and won local elected office. So, in city halls across the country, they are now trying to deploy the limited resources of local government to fight poverty, inequality and environmental degradation at a moment when higher levels of government have failed to address such problems or made them worse. To maintain public support, these reform-minded mayors, city councilors, county commissioners and allied civil servants must be as concerned about street paving and policing as saving the planet from global warming.
Until recently, most of these “pothole progressives” have toiled largely in isolation. They chipped away at local injustice or city hall dysfunction in ad hoc fashion with little national infrastructure to sustain or support them. But as their ranks have swelled in recent years, several networks have developed to promote greater coordination of this difficult work through systematic sharing of information, ideas, and technical expertise.
From December 4 to 6, the only of these groups to focus exclusively on cities, Local Progress, hosted a lively and racially diverse “convening” in New York City to celebrate recent municipal election victories and progressive policy wins, while laying the groundwork for more. Local Progress is funded by several national unions and social-change foundations. Its individual and organizational affiliates profess a “shared commitment to a strong middle and working class, equal justice under law, sustainable and livable cities, and good government that serves the public interest effectively.” Its mission? “To drive public policy at the local level—an area of governance that is too often ignored by the progressive movement.”
Among the “electeds” gathered in New York City for the Local Progress third annual meeting, there was little moping about the Democratic Party’s now much weakened condition in various state capitols and Washington, DC, as a result of last month’s midterm elections. Instead, they and their larger supporting cast of labor and community organizers, public policy advocates and social-change funders all resolved to expand their influence at the local level, where reform is still possible. To hasten this goal, the organizers distributed a sixty-page compilation of “case studies and best practices” from around the country, co-produced with the Center for Popular Democracy. This dense, well-documented guide provides an ambitious blueprint for improving local labor standards, housing and education, policing practices, environmental sustainability, treatment of immigrants, voting rights and financing of elections.
Local Progress has recruited 400 members in forty states; about a third turned up for its latest annual meeting, with impressive representation from the city councils of San Diego, San Francisco, Seattle, Tacoma, Denver, New Orleans, New York, Baltimore and Philadelphia. Mayoral participants included everyone from the high-profile chief executive of the host city, Bill de Blasio, to his far less well-known, but equally feisty, West Coast counterpart, Meghan Sahli-Wells. She hails from Culver City, California, a Los Angeles County enclave with a population smaller than some New York City neighborhoods.
But that difference in scale hasn’t stopped Sahli-Wells from making waves of her own, as an enviro-oriented “bike mayor” who helped secure a ban on single-use plastic bags and has been working tirelessly to ban fracking as well. Now her talk about property tax reform has local realtors organizing against her and wishing she had never been chosen by her council peers to be the city’s part-time mayor. “My Chamber of Commerce hates me,” she reported, but expressed confidence that “harnessing the power of community” would enable her to overcome business opposition to some of her future plans.
De Blasio welcomed such diverse colleagues amid the ornate surroundings of the New York City Council chamber. He was joined by Council Speaker Melissa Mark-Viverito and Brooklyn councilmember Brad Lander, who both described the salutary effect of having a Progressive Caucus of nineteen in the city’s fifty-one-member leadership body.
The Big Apple’s affable, lanky mayor quickly gave what an alarmed New York Post called, the next day, “a fawning shout-out to Seattle.” And indeed, de Blasio did hail Seattle city councilmember Nick Licata, chair of Local Progress, and others from “the Left Coast,” for their leading role in the nationwide minimum-wage campaign that has now bettered the pay of seven million workers. “We all reference each other,” de Blasio noted. “We all build on each other’s work…. Every time we succeed, it builds momentum for other cities.”
The job of Local Progress members, the mayor argued, is to be organizers, not just elected officials. As a result of the group’s collective efforts, “change is coming from the grassroots and working its way up—real, sustained and lasting change.”
In the smaller strategy sessions that followed, participants shared information and ideas on a wide range of topics. These included “participatory budgeting”—an experiment now underway in New York City to solicit neighborhood input on spending priorities—and multi-state efforts to expand public financing of candidates for local and county office. According to Emmanuel Caicedo, state affairs manager for Demos who spoke at the conference, this election reform was a key factor in making progressives more competitive electorally in New York City and enabling them, once in office, to expand the reach of paid sick day legislation. “Without this matching funds system, councilmembers would not be able to do the right thing for their constituents, “ he said.
Local Progress workshop turnout and the intensity of discussion were both driven, in part, by the momentum of events unfolding outside the gathering. The latest round of national fast-food worker protests and street demonstrations in Manhattan over the grand jury decision in the Eric Garner case provided an urgent backdrop for brainstorming about workers’ rights and major reform of US police departments.
On the labor front, city officials were reminded by several speakers from the Service Employees International Union (SEIU) and the AFL-CIO that minimum wage hikes, statutory entitlement to paid sick days, and better enforcement of local labor standards still doesn’t give enough Americans the workplace voice that collective bargaining provides. More needs to be done, they argued, to help workers for government contractors or in public facilities, like airports, to win bargaining rights without management interference. “Having a union is necessary to sustain gains,” Héctor Figueroa, president of SEIU Local 32BJ, pointed out.
Few labor allies in Local Progress question the value of unionization—but some did express concern about unions being unhelpful in their own past municipal campaigns. For example, Anders Ibsen, an earnest 28-year-old city councilor from Washington State, sought advice from AFL-CIO Executive Vice President Tefere Gebre about dealing with conservative “business unionists” who’ve tried to thwart progressive initiatives in Tacoma. In the same panel discussion, San Diego councilmember David Alvarez—a recent labor-backed candidate for mayor—recalled the initial opposition he faced from a major AFL-CIO affiliate. According to Alvarez, it took much patient relationship-building to win over this union, despite his strong commitment to local labor causes like taxi-driver organizing.
Before their gathering ended, most of the city officials present endorsed a Local Progress statement criticizing the “excessive use of force” by police officers in Ferguson, Cleveland, and New York City. They urged federal officials to ensure “that cities around the country end discriminatory policing practices and replace them with programs that respect and empower residents…”
Just how to do that, at the local level, was the subject of much debate at a session on “Winning Real Police and Criminal Justice Reform.” Panelists discussed remedies like requiring police body cameras, retraining officers, recruiting more from minority communities, and offering them financial incentives for local residency. Lisa Daugaard, policy director for the Public Defender Association in Seattle, cautioned against quick fixes, including indiscriminate body camera use and training programs unaccompanied by real institutional change. “It’s easy to hold a three-day training session. It’s very difficult to have training change behavior, habits, instincts,” she said.
Daugaard reported on Seattle’s Community Police Commission (CPC), an oversight body, which she co-chairs and includes two active members of the police force. According to Daugaard, the CPC has spurred a “deeply transformative” shift in the treatment of jobless, homeless, addicted, and/or mentally ill residents previously targeted for police round-ups and jailing, with a disproportionate racial impact. By expanding relevant social services and, in effect, decriminalizing vagrancy and low-level drug dealing, Seattle has been able to “re-humanize” at least some “daily interactions between police and the community.”
And just as cities like Seattle can’t arrest their way out of petty crime spawned by poverty and unemployment, Daugaard warned against a singular focus on prosecutions of police misconduct, after the fact. Many such cases are likely to fail, she noted, and, even if successful, don’t transform the departmental culture or quality of police-community relationships. Jumaane Williams, a New York City councilmember from Brooklyn, agreed with Daugaard that community policing done right “works better than the lock-‘em-up strategy” that still prevails in most cities, even some with Local Progress ties. “The problem, “said Williams, “is when we send policemen to do the job that everyone needs to do. Public safety is an everybody kind of thing.”
Turning the overall Local Progress agenda into actual public policy in more places is also “an everybody kind of thing.” As Seattle’s Nick Licata observed, urban progressives “need both an outside and inside game” to win because neither street politics nor electoral victories alone can change the status quo sufficiently. Instead, he said, “you need people on the inside and people protesting on the outside to provide insiders with backbone.”
By bringing both catalysts for change together, in one organizational network, Local Progress is not blazing an entirely new path or one as explicitly anti-capitalist as left movement builders a century ago. But, in a modern political landscape otherwise bereft of many bright spots at the moment, contesting for power locally, in ecumenical fashion, still makes sense for any group of progressives with higher aspirations and longer-term societal goals.
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Senator Jeff Flake won't make an ultimatum on DACA and tax bill
Senator Jeff Flake won't make an ultimatum on DACA and tax bill
In a video posted to Twitter Thursday night, Arizona Senator Jeff Flake appears on an airplane discussing the...
In a video posted to Twitter Thursday night, Arizona Senator Jeff Flake appears on an airplane discussing the controversial tax reform bill and explaining why he won't force an ultimatum on a program for immigrant youth.
Watch the video and read the full article here.
City to help immigrants seeking deportation reprieves
New York Times - July 17, 2013, by Kirk Semple - New York City plans to spend $18 million over the next two years to...
New York Times - July 17, 2013, by Kirk Semple - New York City plans to spend $18 million over the next two years to help young unauthorized immigrants qualify for a federal program that grants a temporary reprieve from deportation, officials announced on Wednesday.
The money will add 16,000 seats to adult education classes throughout the city, and priority for those slots will be given to immigrants who might qualify for the reprieve.
While more than 20,500 immigrants in New York State have already been granted the reprieve, known as deferred action, city officials have estimated that about 16,000 others in New York City alone would satisfy all the conditions save for the requirement that they have a high school diploma or General Educational Development certificate, or be currently enrolled in school.
The project — the largest investment made by any municipality in the nation to help immigrants obtain the deferral, city officials said — is one of two new immigrant-assistance initiatives that will receive significant injections of public money in the current fiscal year, which began July 1.
The other budget allocation, which the city plans to announce formally on Friday, will pay for a pilot program that will create what immigrants’ advocates say will be the nation’s first public defender system for immigrants facing deportation.
Together, the two programs further cement New York’s reputation as one of the most immigrant-friendly cities in the nation. They also come at a time when a push for comprehensive immigration reform that would include a path to citizenship for unauthorized immigrants has met stiff resistance among Republicans in the House of Representatives.
In a news conference in City Hall on Wednesday, Christine C. Quinn, the City Council speaker, seemed to allude to sclerotic politics on Capitol Hill, saying the Council’s budget decisions send a message to the rest of the nation “that local government can take action while we wait for comprehensive immigration reform.”
The federal deportation reprieve was announced by the Obama administration in June 2012. To qualify, an applicant must have arrived in the United States before reaching his or her 16th birthday and been younger than 31 as of June 15, 2012, among other requirements. Recipients of the reprieve, which is subject to renewal after two years, are legally allowed to work and, in many states, obtain a driver’s license.
More than 400,500 people across the nation have been granted the deferral; for many others, the educational requirement has been a major hurdle.
For years, adult education programs in the city have been swamped by huge demand yet been hamstrung by financial shortfalls.
Of the $18 million allocation, $13.7 million will be provided to community-based organizations through the Youth and Community Development Department and used for outreach and the increase in seats. The remaining $4.3 million will help expand related education programs offered through the City University of New York, like English for Speakers of Other Languages and General Educational Development.
In recent days, immigrants’ advocates have also been celebrating the City Council’s decision to help pay for another initiative: the allocation of $500,000 in its current budget for a network of legal service providers to represent immigrants facing deportation.
Defendants in immigration court, unlike those in criminal court, have no constitutional right to a court-appointed lawyer. Hampered by language barriers, lack of money or ignorance, most end up trying to fight their deportation alone — almost always with poor outcomes.
According to a recent study, 60 percent of detained immigrants in the New York region did not have counsel at the time their cases were completed. Of those without counsel, only 3 percent won their cases, compared with 18 percent of those with counsel.
Proponents of the program, called the New York Immigrant Family Unity Project, said it would cost about $8.7 million to provide legal representation for the 2,800 or so immigrants living in New York State who are detained and face deportation every year. The city allocation, however, will help cover the cost of a pilot program to represent just 135 immigrants. Advocates said that despite its limited reach, the pilot program would give them a chance to test their theories and demonstrate the potential impact of a broader plan.
The program will not only help keep families together, argued Andrew Friedman, executive director of the Center for Popular Democracy, an advocacy group that helped to lobby for the financing, but will also create “an innovative model program” for other municipalities to replicate.
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Fed Chair Janet Yellen: Slowdown in job market likely ‘transitory’
Fed Chair Janet Yellen: Slowdown in job market likely ‘transitory’
Federal Reserve Board Chair Janet L. Yellen expressed hope Tuesday morning that the slowdown in the U.S. job market...
Federal Reserve Board Chair Janet L. Yellen expressed hope Tuesday morning that the slowdown in the U.S. job market would prove temporary, but she emphasized that the central bank would be cautious in raising interest rates again.
Yellen, testifying before the Senate Banking, Housing and Urban Affairs Committee, acknowledged that hiring has dropped off sharply in recent months, but she also pointed to early signs that wages are beginning to rise after years of stagnation. She said she is "optimistic" that the progress in employment will continue.
"We believe that will turn around, expect it to turn around, but we are taking a cautious approach … to make sure that expectation is borne out," Yellen told lawmakers.
The Fed is responsible for charting the course for the nation’s economy, with the dual mission to keep prices stable and strengthen employment. It does that by adjusting the influential federal funds rate. A higher rate helps curb inflation by making borrowing money more expensive, which discourages spending and investment and reins in economic growth. A lower rate means that money is cheap, stimulating purchases by households and businesses. That helps boost employment and speeds up the economy.
The Fed chief's assessment comes less than a week after the Fed unanimously voted to leave its benchmark interest rate unchanged. The central bank raised rates in December for the first time since the Great Recession but has not done so again amid persistent concerns about the health of the global economy.
Yellen said Tuesday that there is still "considerable uncertainty" over her outlook, with such risks as slow growth at home, turbulence in China and volatility in financial markets.
The most immediate threat comes from across the Atlantic Ocean, where Britain will vote Thursday on whether to remain in the European Union. A decision to exit — popularly known as Brexit — would upend Britain's four-decade partnership with the continent and throw the future of Europe’s open market into doubt.
Already, the British pound has been on a roller coaster as the probability of departure shifts with each poll. International policymakers have warned that a decision to leave would lower economic growth in the country by more than 5 percent over the next three years and potentially ripple across the rest of the world.
"A U.K. vote to exit the European Union could have significant economic repercussions," Yellen said Tuesday.
In the aftermath of the 2008 financial crisis, the Fed slashed its target rate all the way to zero and pumped trillions of dollars into the economy in a bid to bolster the American recovery. More than seven years later, it is finally in the process of withdrawing that support.
The first move was in December, when the Fed nudged its target rate up to a range of 0.25 to 0.5 percent. At the time, officials anticipated raising rates four times this year, but the uncertainty in the global economy has forced them to downgrade that projection. Most Fed officials now think only two rate hikes are warranted this year, and a growing number think only one will be necessary.
That shift in thinking at the central bank is evident in Yellen’s own statements. Just last month, she had signaled that the central bank could raise rates "probably in the coming months." But Yellen dropped the reference in a speech early this month, after disappointing government data showed employers added just 38,000 jobs in May. And last week, she told reporters that she is "not comfortable to say it's in the next meeting or two."
On Tuesday, Yellen made the case for caution. Because rates are already so low, the Fed has limited room to reduce them further if the economy were to weaken, she said. Moving gradually also gives the central bank time to assess whether its forecast of continued economic improvement will come true.
"Our cautious approach to adjusting monetary policy remains appropriate," she said.
The Fed has faced criticism from both the left and the right recently over its governance. Sen. Richard C. Shelby (R-Ala.), chairman of the Banking Committee, opened the hearing Tuesday by calling on the Fed to follow more stringent rules for setting policy and to explain when it deviates.
"The desire to preserve the Fed’s independence, however, should not preclude consideration of additional measures to increase the transparency of the board’s actions," he said.
Meanwhile, Sen. Sherrod Brown (D-Ohio) focused on diversity within the Fed’s top ranks. Last month, more than 100 lawmakers sent a letter to Yellen arguing for more minority representation among its leadership.
The central bank is led by a board of governors based in Washington and 12 regional bank presidents scattered throughout the country. The governors are appointed by the president and confirmed by the Senate, but regional bank leaders are chosen by local boards of directors.
Those officials tend to be white men. Yellen is the first woman to serve as chair in the central bank’s 101-year history. Only three Fed governors have been African American, and there have been no black regional bank presidents. No one now in the top brass is Hispanic.
By Ylan Q. Mui
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8 days ago
8 days ago