August, 22 2012, 02:46pm EDT
For Immediate Release
Contact:
Kate Fried, Food & Water Watch, (202) 683-2500, kfried(at)fwwatch(dot)org.
First Our Homes, Now Our Water?
Food & Water Watch Analysis Reveals Wall Street’s Hold on Municipal Water Systems
WASHINGTON
Following its disastrous foray into the housing market, Wall Street's latest earnings scheme is as close as your kitchen sink: the finance industry is increasingly targeting public water systems. A new report released today by the national consumer advocacy group Food & Water Watch, Private Equity, Public Inequity: The Public Cost of Private Equity Takeovers of U.S. Water Infrastructure reveals that as of January 2012, private equity players had raised $186 billion through 276 infrastructure funds and were seeking another $93 billion to take over infrastructure worldwide.
"Like Wall Street's manipulation of the housing market in the previous decade, private equity firms and investment bankers are increasingly looking to cash in on one of our most essential resources--water," said Food & Water Watch Executive Director Wenonah Hauter. "These deals are ultimately a bum deal for consumers, who will end up paying the price through increased water bills and degraded service."
Food & Water Watch's new report shows that because private equity players typically seek a 12 to 15 percent return on investment, they quickly flip assets. Often, they do this after scrimping on service, investing in elaborate and unnecessary projects, quashing transparency and avoiding taxation, in turn driving up prices for consumers.
Even the finance community has identified flaws in these deals. In 2006, Standard & Poor's warned that due to excessive borrowing, private equity takeovers could result in downgraded credit ratings. Governments could also have to step in and bail out the privatized systems if economic conditions prevent refinancing short-term acquisition debt and the private operators default.
George Marlin, a career investment banker and director of the Nassau County Interim Finance Authority (the state board that oversees the county's finances and which earlier this year rejected the county's contract with Morgan Stanley to serve as a financial advisor on the privatization of the county's sewer system) called the county's privatization proposal an "ill-conceived backdoor borrowing scheme" akin to using a credit card with a high interest rate to pay off a loan with a lower one.
Despite obvious conflicts of interest, private equity players are increasingly stepping in as financial advisors to cash-strapped municipalities exploring possible privatization deals. Compensated primarily through the execution of such plans, advisors from private equity firms have a direct financial interest in these deals, much to the detriment of local residents.
When municipalities privatize their drinking and wastewater systems to fill budget shortfalls, private equity firms have greater bargaining power to negotiate more lucrative deals. Many local governments, especially cash-strapped ones, are ill-equipped to evaluate proposals from multinational finance firms or to negotiate a fair contract, making them vulnerable to expensive, unnecessary deals.
Firms have also been known to low-ball contract bids, basing costs on rosy water use and growth estimates or pessimistic financial projections. After winning a privatization contract based on these inaccurate figures, a firm would renegotiate the contract to shift risks and costs to the public.
"Private equity players aren't investing in water out of a sense of civic responsibility. Their first and foremost motivation is profits, which has already proven incompatible with delivering an essential resource to consumers," added Hauter.
Instead of using budget gimmicks like privatization, Food & Water Watch recommends that municipalities address their fiscal challenges in an open and transparent manner. Rather than pursuing such risky privatization deals, governments can improve services and protect the integrity of the water and sewer systems through public-public partnerships. Forged between public water utilities, government entities, or non-governmental organizations, these partnerships pool resources, buying power and technical expertise to enhance public efficiencies and service quality--all at a lower cost to consumers than privatization.
Private Equity, Public Inequity: The Public Cost of Private Equity Takeovers of U.S. Water Infrastructure is available here.
Food & Water Watch mobilizes regular people to build political power to move bold and uncompromised solutions to the most pressing food, water, and climate problems of our time. We work to protect people's health, communities, and democracy from the growing destructive power of the most powerful economic interests.
(202) 683-2500LATEST NEWS
Extending Trump Tax Cuts Would Add $4.6 Trillion to Deficit: CBO
"We can't afford 10 more years of giveaways to the wealthy and corporations and fail to invest in the people who drive our economy," said the head of Groundwork Collaborative. "This tax law should expire."
May 08, 2024
As former U.S. President Donald Trump and congressional Republicans campaign on extending their 2017 tax cuts if elected in November, a government analysis revealed Wednesday that doing so would add $4.6 trillion to the national deficit.
When Trump signed the Tax Cuts and Jobs Act during his first term, the initial estimated cost was $1.9 trillion. Last year, the Congressional Budget Office (CBO) projected that extending policies set to expire next year would cost $3.5 trillion through 2033.
The new CBO report—sought by U.S. Senate Budget Committee Chair Sheldon Whitehouse (D-R.I.) and Senate Finance Committee Chair Ron Wyden (D-Ore.)—says continuing the income, business, and estate tax cuts will now cost $4.6 trillion through 2034.
"The Republican tax plan is to double down on Trump's handouts to corporations and the wealthy, run the deficit into the stratosphere, and make it impossible to save Medicare and Social Security or help families with the cost of living in America."
Responding in a statement Wednesday, the senators cited an Institute on Taxation and Economic Policy (ITEP) estimate that "extending the Trump tax cuts would create a $112.6 billion windfall for the top 5% of income earners in the first year alone."
They also slammed their GOP colleagues, who Whitehouse said "are awfully eager to shield their megadonors from paying taxes."
He recalled that just last year, "Republicans held our entire economy hostage," refusing to raise the debt ceiling and risking the first-ever U.S. default, because they didn't want the Internal Revenue Service to get more funding to "go after wealthy tax cheats."
"Remember the Trump tax scam cutting taxes for billionaires and big corporations," Whitehouse continued. "Now they're set on extending those tax cuts, even though it would blow up the deficit. The Trump tax cuts were a gift to the ultrarich and a rotten deal for American families and small businesses. With their impending expiration, we have a chance to undo the damage, fix our corrupted tax code, and have big corporations and the ultrawealthy begin to pay their fair share."
Wyden similarly took aim at the GOP, warning that "the Republican tax plan is to double down on Trump's handouts to corporations and the wealthy, run the deficit into the stratosphere, and make it impossible to save Medicare and Social Security or help families with the cost of living in America."
"Republicans have planned all along on making Trump's tax handouts to the rich permanent, but they hid the true cost with timing gimmicks and a 2025 deadline that threatens the middle class with an automatic tax hike if they don't get what they want," he argued. "In short, they're focused on helping the rich get richer, and everybody else can go pound sand. Democrats are going to stand by our commitment to protect the middle class while ensuring that corporations and the wealthy pay a fair share."
Groundwork Collaborative executive director Lindsay Owens also responded critically to the CBO report, saying Wednesday that "extending Trump's tax law and effectively subsidizing corporate profiteering and billionaire wealth is a nonstarter."
"This tax law, on top of decades of failed trickle-down cuts, has come at the expense of workers and families," Owens stressed. "We can't afford 10 more years of giveaways to the wealthy and corporations and fail to invest in the people who drive our economy. This tax law should expire."
While some of the tax cuts in the 2017 law are temporary—unless they get extended—the legislation permanently slashed the statutory corporate tax rate from 35% to 21%. As Common Dreamsreported last week, a new ITEP analysis shows that tax rates paid by big and consistently profitable corporations dropped from 22% to 12.8% after the law's enactment.
Keep ReadingShow Less
Sanders, Khanna Lead Push to Tackle Medical Debt Crushing US Workers
"The time has come to cancel all medical debt and guarantee healthcare to all as a human right, not a privilege," said Sen. Bernie Sanders.
May 08, 2024
A quartet of progressive U.S. lawmakers on Wednesday introduced bicameral legislation "to eliminate all $220 billion in medical debt held by millions of Americans, wipe it from credit reports, and drastically limit the accrual of future medical debt."
The Medical Debt Cancellation Act—introduced by Sen. Bernie Sanders (I-Vt.), Rep. Ro Khanna (D-Calif.), Sen. Jeff Merkely (D-Ore.), and Rep. Rashida Tlaib (D-Mich.)—is a four-point plan for ending the medical debt that's crushing so many working-class Americans.
"Our current healthcare system is bankrupting Americans."
"The medical debt crisis has exploded in recent years, decimating Americans' bank accounts and deterring them from seeking healthcare," Sanders' office said in a statement. "Among all working-age adults in the United States, an estimated 27% are currently carrying medical debt of more than $500, and 15% have medical debt loads of $2,000 or more."
If passed, the Medical Debt Cancellation Act would:
- Amend the Fair Debt Collection Practices Act, making it illegal to collect medical debt incurred prior to the bill's enactment and creating a private right of action for patients;
- Amend the Fair Consumer Credit Reporting Act, effectively wiping medical debt from credit reports by preventing credit reporting agencies from reporting information related to debt that arose from medical expenses;
- Create a grant program within the U.S. Department of Health and Human Services to cancel medical debt, prioritizing low-resource providers and vulnerable populations; and
- Amend the Public Health Service Act, updating billing and debt collection requirements to limit the potential for future debt to be incurred.
"This is the United States of America, the richest country in the history of the world," said Sanders. "People in our country should not be going bankrupt because they got cancer and could not afford to pay their medical bills. No one in America should face financial ruin because of the outrageous cost of an unexpected medical emergency or a hospital stay."
But many do. In 2018 alone, 8 million people in the U.S. were driven into poverty due to medical debt. According to Sanders' office, nearly three-quarters of U.S. adults say they are worried about unexpected medical bills and nearly 1 in 4 people report having foregone medical treatment over cost concerns—including almost 20% of adults covered by health insurance.
"The time has come to cancel all medical debt and guarantee healthcare to all as a human right, not a privilege," said Sanders, a longtime proponent for Medicare for All in the only industrialized nation without universal coverage.
Khanna lamented that "our current healthcare system is bankrupting Americans."
"I've heard heartbreaking stories from constituents who have skipped doctor's appointments due to cost, who have lost loved ones because they couldn't afford their medication, and who aren't able to buy a house or get a job because of crippling medical debt," the congressman said.
"I'm so proud to join Sen. Sanders to cancel medical debt, wipe it from credit reports, and reform our system going forward," he added. "This bill would transform the lives of millions of Americans and I couldn't ask for a better partner in the fight."
This isn't Congress' first attempt to address the issue of medical debt. Last year, Tlaib
introduced the Restoring Unfairly Impaired Credit and Protecting Consumers Act, which would reduce the amount of time that negative information remains on a credit report from seven years to four and compel reporting agencies to erase adverse data stemming from "predatory loans and fraudulent activity."
Keep ReadingShow Less
Study Links Abortion Restrictions and Intimate Partner Homicide
"In thinking about pregnancy itself as a risk factor for homicide, it follows that the ability to prevent or end a pregnancy" could have "immediate implications" for the safety of pregnant people, said one researcher.
May 08, 2024
A new study links abortion restrictions to an increased risk that pregnant people will be murdered by their intimate partners—and since researchers examined laws that were in place before the U.S. Supreme Court overturned Roe v. Wade and cleared the way for statewide abortion bans, the authors warn that the threat may be even greater than the analysis shows.
In the study released Monday, researchers at Tulane University looked at five separate abortion restrictions and compared them to the intimate partner homicide rates reported by the National Violent Death Reporting System at the U.S. Centers for Disease Control and Prevention.
For each of the abortion restrictions, all of which were in place from 2014-22, the rate of intimate partner homicide among women and girls of reproductive age rose 3.4%.
The researchers found that extrapolated across the United States, an additional 24 women were killed by their intimate partners over the time period.
The study controlled for domestic violence risk factors including income inequality and gun ownership.
Intimate partner homicide is "consistently among the leading causes of death in pregnant and postpartum people," lead author Maeve Wallace, an associate professor at Tulane, toldThe Guardian.
Because it is still relatively rare, however, the research team used girls and women of reproductive age as a proxy for victims of violence who were likely pregnant or postpartum.
"In thinking about pregnancy itself as a risk factor for homicide, it follows that the ability to prevent or end a pregnancy" could have "immediate implications" for the safety of pregnant people in states with severe abortion restrictions and bans, Wallace told The Guardian.
The newspaper reported that the research "is almost certainly an underestimate of the potential risk to pregnant and postpartum women, because intimate partner violence is generally underreported."
The study is the latest research illustrating "the horrific reality for women in America," said U.S. Sen. Dick Durbin (D-Ill.).
Another study published in the Journal of the American College of Surgeons in February found a 75% higher rate of peripartum homicide—the murder of a pregnant person or within a year of their giving birth—in states that restricted abortion access from 2018-20.
Reproductive justice advocates have pointed out that at least four states with abortion bans in place also ban divorce for married people who are pregnant.
"An abusive partner oftentimes views pregnancy as a loss of control, that their victim will now not be solely dedicated to them but will have somebody else that diverts their attention away from the abusive partner," Crystal Justice, chief external affairs officer at the National Domestic Violence Hotline, told The 19th last month after the Arizona Supreme Court reinstated an 1864 abortion ban, which has since been repealed by state lawmakers but still could be in effect for part of this year.
"Not only is the state now saying with this harmful and antiquated law that you must stay pregnant against your will," Justice said, but "during that pregnancy, the state is not going to let you legally divorce your abusive partner. I can't think of anything more outrageous or cruel."
The U.S. National Domestic Violence Hotline can be reached at 1-800-799-SAFE (7233), by texting "START" to 88788, or through chat at thehotline.org. It offers 24/7, free, and confidential support. DomesticShelters.org has a list of global and national resources.
Keep ReadingShow Less
Most Popular