Playing Games With Housing

Congress and the Department of Housing and Urban Development have been playing a transparent game of “good cop, bad cop” since HUD set out to savage Section 8, the federal program that provides housing subsidies for the poor. Republicans in Congress say they budgeted enough money to underwrite the program, and they blame recalcitrant officials at HUD for the cutbacks — while the agency, in turn, maintains that it is doing what Congress told it to do.

Behind the game, however, both sides seem intent on squeezing money from the HUD budget to help pay for all those tax cuts for the rich, even if it means exposing thousands of poor families to the possibility of eviction.

Most of the families who receive subsidies under the 30-year-old Section 8 program live at or below the poverty level. They pay about 30 percent of their incomes toward rent and government vouchers pay the rest.

Conservative Republicans, who have long wanted to scale back the program, have usually been beaten back by their colleagues. This time around, the appropriators in Congress provided full financing for the program while quietly authorizing HUD to make cuts by administrative means. The department then announced that it would no longer pay the full cost of the vouchers, and it froze federal funds at the level of August 2003, plus an adjustment for inflation.

In addition, HUD’s new policy involves retroactive cuts, which only became clear at the end of May, long after local housing authorities had committed themselves to helping new families, including many who had waited for years to get decent housing through the voucher program. Obviously, if cuts have to be made, the only sensible way to make them is to do so gradually and well in advance, so the local housing agencies can adjust to the new reality while preserving housing for their most vulnerable tenants.

Faced with unexpected shortfalls, local public housing agencies have informed landlords that they can no longer pay agreed-upon rent subsidies, making it likely that many Section 8 tenants will soon be shown the door. A recent survey from the Center on Budget and Policy Priorities suggests that most agencies with shortfalls will go this route. The survey also shows that local authorities have revoked newly issued vouchers and have begun to withdraw from circulation the vouchers that become available when families get better jobs and move out of the subsidy program.

In addition, local agencies have begun to raise rents for the vulnerable families who can least afford to pay, something that is a sure way of destabilizing these families while driving them deeper into poverty.

The Bush administration is counting on Republicans at the state level to keep quiet in the interest of party solidarity. But given the disastrous nature of the new policies, governors, state legislators and mayors of both parties have both a moral and political obligation to speak out.

Is Wal-Mart Getting Scared?

eRobin of Fact-esque posted a thought-provoking piece suggesting that Wal-Mart customers may be catching on to their unholy practices and shopping elsewhere.

Note: I hope she’ll forgive my stealing the whole post but I really couldn’t figure out a way to excerpt it without ruining her point.

If July’s Numbers Are Bad, WalMart Will Have a Theory Linked to Months With an “R” in Their Names.

I have a theory that the world’s largest retailer and Enemy of the People, WalMart, is scared to death that Americans will wake up to what a corrosive force it is in our economy. After just a little bit of press attention to their failures to get outlets in some major cities, partly due to the company’s medieval labor practices, WalMart began a publicity blitz that reeked of fear. (here and here) They were probably also anticipating the sexual discrimination suit to hit the papers as well.

Now their very disappointing June numbers are out. They are blaming the poor performance on cool weather and bad Father’s Day turnout. To be fair, I don’t love my dad as much when the temperature falls below 80. And that analysis makes as much sense as what WalMart has been saying.

In the beginning of June, before we experienced any unseasonable weather and America turned against our fathers, they blamed the calendar in advance:

Wal-Mart Stores Inc., the world’s largest retailer, said yesterday that June sales would reach the low end of the expectation range of 4 to 6 percent higher than last year.

[…]

Walmart said that gains might be limited because the June period last year included July 4, when shoppers stock up on traditional holiday items like flags and hot dogs.

So now the sales growth numbers are out and they’re even worse than the low end of 4 to 6 percent. In fact, they’re twice as bad as that – essentially flat. From AOL news:

Wal-Mart Stores Inc. lowered its forecast Monday for June sales growth at stores open at least a year to a range of 2 percent to 4 percent, citing cool weather and disappointing Father’s Day results.

The world’s largest retailer said Monday during its weekly sales update that key categories were flat this year as compared to last year, when it had its best week of the summer.

They’re terrified. If people threatened by WalMart’s economic power, anti-union policies and political reach could manage to organize a one-day boycott/Day of Education targeting Walmarts across the country, the company’s head would explode. Why can’t we (“organized” labor) get that done??

It’s a good question to which I don’t have a good answer, though I suspect the fact that ‘organized labor’ groups have their hands full just surviving may have something to do with it. Still, that’s no excuse. She’s right about this: Wal-Mart should have been a standard union target years ago.

There may be something to her theory. Wal-Mart is buying time on NPR (let’s face it, that’s what it is) to announce and promote their ‘philanthropic foundation’, a pure PR ploy. Why would they do that if their base doesn’t listen to it and they don’t care about the bad publicity? The Waltons have never been known for their ‘philanthropic’ urges before.

I can’t say I’ve seen any falling-off of business in the store where I live, but then Wal-Mart drove all the competition out years ago in this area and now they’re the only game in town, so probably I wouldn’t.

But consider this: Wal-Mart is a leader in the anti-worker war; it was fear of Wal-Mart that caused the supermarket strike in CA that John wrote about. If they got taken down, all the corporations that are looking at adopting Wal-Mart-style labor practices would be quaking in their boots and backing out the door.

So?

Money-Changers Put the Squeeze On

They come at you in steps usually.

Step 1: Lower interest rates to entice you to go into debt

Step 2: Convince you that those interest rates are going to stay low forever if you just keep spending money you don’t have to keep the economy growing when it’s actually not

Step 3: When you fall for Steps 1 & 2 and you’re thoroughly trapped, start raising interest rates on fears of ‘inflation’

By several measures, Americans are more indebted than ever. Through the first quarter, they owed nearly $9 trillion in home mortgages, car loans, credit card debt, home equity loans and other forms of personal borrowing — accumulating nearly 40 percent of this total in just four years, according to published Federal Reserve data. But most of the debt is at fixed interest rates. Thus it will be unaffected initially as the central bank begins its much expected quarter-point increases in the so-called federal funds rate, now at a 46-year low of 1 percent. The federal funds rate, in turn, influences the interest rate cost of most household and commercial debt.

Only one-fifth of the $9 trillion in total household debt, or $1.8 trillion, is borrowed at variable rates. Variable rates, like those that the Diffenderfers pay on their four credit cards, often track what the Fed does, which means they are likely to rise one-quarter of a percentage point over the next few weeks. The immediate cost for the nation’s households as a result of this process could be as much as $4.5 billion, including the initial $35 increase in the Diffenderfers’ monthly credit card bill.

The $4.5 billion is roughly 10 percent of the cost of the rise in oil prices so far this year. That is not a big number yet, but each quarter-point increase would be another step closer to matching the oil shock, which brought gasoline prices above $2 a gallon in many parts of the country.

While the oil shock quickly raised the gasoline and heating oil bills of nearly every household, the burden of higher interest payments falls most heavily in the early stages on lower- and middle-income families. They are the biggest users of variable rate debt, particularly on credit cards, various studies show.

Upper income families, on the other hand – that is, families with more than $80,000 in annual income – are more likely to have fixed rate debt, particularly mortgages, and to owe relatively little on their credit cards. What variable rate debt they do have is usually at lower interest rates than lower income people. Lower income people, as a result, are 10 times more likely than upper income people to be devoting 40 percent or more of their income to debt repayment, the Economic Policy Institute reports. In addition, upper income people are the nation’s biggest savers, and a rate increase raises the return on their interest-bearing securities.

Maybe they’re the biggest savers because the income distribution is now so top-heavy that they’re then only ones with extra money. Yah think? Here’s the way the scam works:

The Diffenderfers have a combined income of nearly $70,000 a year, including the overtime he earns and the small payments she receives as assistant organist at her church. They have been married 17 years but they lived with her mother for the first 11, paying her rent. When they finally bought a house of their own in 1998, for $89,000, they had nothing saved for a down payment, and borrowed the entire amount through a 30-year mortgage. They also took out a second mortgage, for $30,000, which they invested in remodeling the home: aluminum siding, a new bathroom and a refinished living room with oak trimmed walls.

As interest rates fell, they refinanced both mortgages, locking in a 5.25 percent fixed interest rate for 30 years. Still, the remodeling continued, mainly on credit cards once the $30,000 was exhausted. Their three-bedroom house is now worth nearly $120,000, almost equal to the mortgage debt, Mrs. Diffenderfer estimates. That leaves the couple with no spare equity that can be extracted in cash through a bigger mortgage. Nor can they lower their $726-a-month mortgage payment. With mortgage rates already rising in anticipation of the Fed’s increases, that once lucrative route for millions of consumers is closing.

The Diffenderfers have only their salaries to meet the rising cost of their variable rate credit card debt, although for a while Mrs. Diffenderfer managed to reduce the interest payments by switching the balances to new credit cards whenever she could get a lower rate. The interest rates on her cards now average just under 10 percent, partly through her efforts to find teaser discounts and partly because credit card companies dropped their rates several percentage points, a decline now likely to be reversed.

That’s putting it mildly. We have to stop this madness, people. They’ve got us coming-and-going. It doesn’t matter whether you slave to buy–and keep–your own home or rent an apartment, they treat our necessities as an opportunity for theft, and they’ve got a hundred ways of tricking us into looking the other way while they lift our wallets. We need to get smarter and we need to fight back. It’s a rigged game and we’re the marks.

Corporate HR fads

An alert reader, Dum Luks sent me this op-ed piece from the English edition of the Japanese paper Asahi Shimbun:

`There is no clear evidence that downsizing actually does any good, at least not in the United States.’In recent years, Japan’s kinder and gentler managers borrowed a critical lesson from their more ruthless American counterparts: They learned to downsize. They got serious about trimming their work forces, that in turn boosted profits, and that finally brought the fragile recovery Japan is now experiencing.

It’s a nice story, but there is a big problem with it: There is no clear evidence that downsizing actually does any good, at least not in the United States. What? How could that be? Everyone knows that downsizing reduces costs, and cutting costs raises profits. But that is precisely the point.
Everyone is so convinced that downsizing enhances corporate performance that no one bothers to check the evidence, …

I have been doing some research on the topic recently, and I discovered to my astonishment that the evidence from the United States suggests that downsizing has not improved corporate performance-whether defined in terms of profits, productivity, or stock price-and many studies indicate that it impairs performance.

After all, downsizing may save a company on labor costs, but it also entails substantial costs: The immediate cost of paying off downsized workers, for example, plus the longer-term cost of losing valuable personnel and undermining employee morale.

In one of the most authoritative studies, prominent economists William Baumol, Alan Blinder and Edward Wolff [in the book Downsizing in America] find that downsizing does not improve productivity, lowers stock performance and raises profits-but only by depressing wages. Other studies contend that downsizing does not even increase profits, and one study suggests that layoffs actually decrease profits in subsequent periods.

So if downsizing doesn’t help, then why have so many American companies rushed to do it? Several scholars have taken up this puzzle, and they conclude that American managers are so beholden to the myth that downsizing is effective that they do not even bother to check whether it happens to be true. They also contend that managers view downsizing as a social norm, so they do it to preserve or enhance their firm’s reputation.

The rest of the piece speaks about the specifically Japanese case and is worth reading. For my part, I find that last statement the most interesting. Most corporations do not downsize because of the results of an honest cost/benefit analysis, they do it because all of the other corporations are doing it. Peer pressure. Management through fads. Even to give them the most credit possible, they do it to appease the investors, who themselves are acting in herd-like response to fads.To make up for understaffing, companies have run through a whole sequence of supporting fads with self-complementary rationales. First, it was filling in with temp labor. The rhetoric to support this fad was that we just get the help we need when we need it. We’re responding lightning fast to changes in the market. As this was dying out we got the tech boom. Start-ups made everyone a salaried employee and demanded they demonstrate their dedication by working hundreds of hours of unpaid overtime each year (for both of the years they lasted before burning out). Now off-shore out-sourcing and Wal-Mart style return to nineteenth century labor conditions are the magic solutions.

All of these fads were morale killers. Employees have no reason to be loyal to a company that’s not loyal to them. Even where it’s possible to stay, no one expects to stay. In the past, the answer to “what do you do for a living” was some variation of “I am this.” Today you more often hear some variation of “right now I’m doing this.”

All of these companies reduce continuity and institutional memory. Rapid turnover and short-term help are always on the low end of the learning curve. We congratulate ourselves on increases in productivity, but how much more productive would a stable and experienced work force be?

My gut feeling is that these human resources fads are as bad as management fads and as damaging to the corporations as they are for the work force. I’m encouraged to see that people like the anonymous author of this op-ed piece are finally asking the right questions and gathering the data that could prove this.

Bush’s ‘New Jobs’ 2

Update: According to a University of Chicago economics professor commenting on NPR’s Marketplace last night, more jobs have been created in debt collection over the past year than in all the manufacturing sectors combined.

And that says it all, don’t it?

Class Warfare in America by Bill Moyers, Part 4

Household economics is not the only area where inequality is growing in America. Equality doesn’t mean equal incomes, but a fair and decent society where money is not the sole arbiter of status or comfort. In a fair and just society, the commonwealth will be valued even as individual wealth is encouraged.

We don’t have a just society and I don’t expect it to happen in my lifetime but I will go further: We can’t even hope to build a society that is trying to be fair and just unless and until the commonwealth and individual and corporate wealth are considered of equal worth. As long as the latter are more valued than the former, we don’t even have a democratic society–we have a society filled with oligarchs and people who want someday to be oligarchs. It is the revolutionary idea, first that there is such a thing as a commonwealth–that society represents a wealth that we all share in common–and second that our common wealth and well-being is at least as important as our individual wealth and well-being, that is the underpinning of the democratic ideal. Without it, without a profound and lasting commitment to it, we are at best a corporate oligarchy and at worst a dictatorship waiting to happen.

Let me make something clear here. I wasn’t born yesterday. I’m old enough to know that the tension between haves and have-nots are built into human psychology, it is a constant in human history, and it has been a factor in every society. But I also know America was going to be different. I know that because I read Mr. Jefferson’s writings, Mr. Lincoln’s speeches and other documents in the growing American creed. I presumptuously disagreed with Thomas Jefferson about human equality being self-evident. Where I lived, neither talent, nor opportunity, nor outcomes were equal. Life is rarely fair and never equal. So what could he possibly have meant by that ringing but ambiguous declaration: “All men are created equal”? Two things, possibly. One, although none of us are good, all of us are sacred (Glenn Tinder), that’s the basis for thinking we are by nature kin.

Second, he may have come to see the meaning of those words through the experience of the slave who was his mistress. As is now widely acknowledged, the hands that wrote “all men are created equal” also stroked the breasts and caressed the thighs of a black woman named Sally Hennings. She bore him six children whom he never acknowledged as his own, but who were the only slaves freed by his will when he died — the one request we think Sally Hennings made of her master. Thomas Jefferson could not have been insensitive to the flesh-and-blood woman in his arms. He had to know she was his equal in her desire for life, her longing for liberty, her passion for happiness.

In his book on the Declaration, my late friend Mortimer Adler said Jefferson realized that whatever things are really good for any human being are really good for all other human beings. The happy or good life is essentially the same for all: a satisfaction of the same needs inherent in human nature. A just society is grounded in that recognition. So Jefferson kept as a slave a woman whose nature he knew was equal to his. All Sally Hennings got from her long sufferance — perhaps it was all she sought from what may have grown into a secret and unacknowledged love — was that he let her children go. “Let my children go” — one of the oldest of all petitions. It has long been the promise of America — a broken promise, to be sure. But the idea took hold that we could fix what was broken so that our children would live a bountiful life. We could prevent the polarization between the very rich and the very poor that poisoned other societies. We could provide that each and every citizen would enjoy the basic necessities of life, a voice in the system of self-government, and a better chance for their children. We could preclude the vast divides that produced the turmoil and tyranny of the very countries from which so many of our families had fled.

We were going to do these things because we understood our dark side — none of us is good — but we also understood the other side — all of us are sacred. From Jefferson forward we have grappled with these two notions in our collective head — that we are worthy of the creator but that power corrupts and absolute power corrupts absolutely. Believing the one and knowing the other, we created a country where the winners didn’t take all. Through a system of checks and balances we were going to maintain a safe, if shifting, equilibrium between wealth and commonwealth. We believed equitable access to public resources is the lifeblood of any democracy. So early on [in Jeff Madrick’s description,] primary schooling was made free to all. States changed laws to protect debtors, often the relatively poor, against their rich creditors. Charters to establish corporations were open to most, if not all, white comers, rather than held for the elite. The government encouraged Americans to own their own piece of land, and even supported squatters’ rights. The court challenged monopoly — all in the name of we the people.

Moyers has here named exactly the source of the unease that afflicts many with doubts about the way things are going. They can’t articulate it as well, but deep down somewhere inside they know that something is dreadfully wrong with the attitudes that have been fostered by the right over the past three decades, that we are no longer even trying to live up to our promise, that we have allowed ourselves to be taken in by con-artists and snake-oil salesman who dazzle us with their “Goverment Is BAD” carnival sideshow.

Distance from the battles of the past, a plethora of new and and expanding distractions, a lack of direct understanding of or involvement in the democratic process, the pressures of an economy that is so friendly to business that it now requires two working parents and 60+ hours a week to survive, all contribute to the sense the right has exploited that government is irrelevant, that it has nothing to do with our lives. And I wonder if we will understand how Big a Lie that is before we lose the government we dismiss so easily and thoughtlessly only to see it replaced by yet another band of plutocrats, slumlords, and money-changers.

If we don’t, the Great Experiment that was America is over, and the shameful part is that we will have killed it for trivialities–greed and the illusion of a safety that doesn’t exist unless we band together for the common good of all.

IBM settles 50 lawsuits by former San Jose plant workers

One of the biggest dangers that almost all workers face at one time or another is the workplace itself. Whether it’s RMS (Repetitive Motion Syndrome) or toxic chemicals and pollutants or SBS (Sick Building Syndrome), we are all exposed to debilitating workplace hazards that can–and do–make us ill or even kill us, often years after that exposure.

Corporate history on this issue is abysmal when it isn’t criminal (remember Erin Brockovich? That’s standard behaviour): denial, unconscionable personal attacks on the victims involving innuendo and outright lies, bald-face lying to investigating authorities, cover-ups, destruction of evidence, the list goes on and on. The one thing not on that list is: they never agree to clean up their mess until they’re forced to, either by govt or the courts.

Which makes me wonder about this item:

NO TERMS WERE DISCLOSED IN TOXIC CHEMICALS CASES

By Therese Poletti

San Jose Mercury News

IBM has settled 50 toxic chemical lawsuits brought by former employees at its San Jose manufacturing plant.

The terms of the confidential settlement in the closely watched litigation were not disclosed.

Chris Andrews, a spokesman for the Armonk, N.Y., computer giant, said Wednesday that a Santa Clara County Superior Court judge dismissed the cases following a settlement between the company and the plaintiffs.

Richard Alexander, the lead attorney for the plaintiffs in San Jose, did not return calls or e-mails seeking comment.

In February, a Santa Clara County Superior Court jury rejected two former IBM workers’ claims that they suffered systemic chemical poisoning as a result of their work at IBM’s Cottle Road disk drive manufacturing plant between the 1960s and 1980s.

Alida Hernandez, 73, and James Moore, 62, contended that exposure to acetone, benzene, trichloroethylene and other chemicals used in manufacturing clean rooms caused them to develop cancer. Hernandez suffered from breast cancer, and Moore has non-Hodgkin’s lymphoma.

The former IBM workers alleged that IBM knew they were ill and concealed that information from them. Their case, in which they were seeking millions of dollars in punitive damages, was the first of the some 50 similar cases to go to trial. The jury verdict in favor of IBM was unanimous.

In March, Judge Robert Baines put the remaining cases on hold and ordered both parties to meet with a mediator.

As far as I know, this is unprecedented. Oddities:

1) It’s not unusual for a judge to order the remaining parties in a large lawsuit like this into mediation after a verdict is either split or goes to the plaintiffs; it’s very unusual for a judge to do so when the verdict is unanimous and in favor of the defendant;

2) The company went into mediation; standard form is to appeal the judge’s ruling, and given the jury’s decision, IBM would have grounds for it to be set aside;

3) IBM has been involved in a number of suits resulting from unsafe working conditions and toxic poisoning; their history is to settle before the trial begins or after they’ve lost:

IBM previously settled two birth-defects cases in New York. In March, IBM settled a birth-defects lawsuit with the daughter of a former semiconductor plant worker in East Fishkill, N.Y., just before jury selection was to begin. Terms of that settlement were not disclosed. The plaintiff, Candace Curtis, was seeking $100 million in damages.

In January 2001, IBM settled another birth-defects lawsuit with the family of Zachary Ruffing, who was born blind. Both his parents worked at the East Fishkill plant in the 1980s.

Why agree to a settlement after an outright win? The PR pounding, maybe; sometimes it’s more harmful for a company to have its workplace practices exposed in print even if it wins its case than if it just pays everybody to go away and keep it out of the media. But why did the judge order it? After the defendant loses, it’s in everybody’s interest to settle and get the suit out of the courts, but when the defendant wins it’s only in the interest of the plaintiffs. And I’m not the only one who thinks this is odd.

“It is difficult to draw conclusions” from confidential settlements, said John Kalin, a San Francisco attorney who specializes in toxic tort cases. “Usually, when it’s a confidential settlement, it’s requested by the corporation.”

Kalin said companies typically try to reach confidential settlements so the settlement cannot be used against them in future litigation. But he also noted that in the San Jose case the plaintiffs might not have had a lot of influence. “If you don’t have a favorable jury verdict, you don’t have the kind of leverage you would have if you had gotten a multimillion-dollar verdict.”

(emphasis added)

The only time I’ve ever seen judges do that is when they thought there had been a miscarriage of justice and that the jury–which it’s allowed to do–had ignored the law in reaching their verdict to such an extent that the equivalent of legal violence had been done. I think that’s what may have happened here.

Who knows why the jury did what it did? I wasn’t sitting in the courtroom and I don’t. What does seem clear is that, for whatever reason, IBM, as corporations do far too often, has once again dodged an accountability bullet by buying its way out of mistakes and/or policies that harmed its workers.

We were not, we are not, a priority for them, no matter what they say when they want to cut our pay. Or abandon our suit against them.

Bush’s “New Jobs” in Low-Wage Industries; Wage-Levels Remain Stagnant

By Jonathan Weisman and Nell Henderson
Washington Post Staff Writers
Wednesday, June 23, 2004; Page E01

Employers have added 1.2 million jobs this year, and average weekly earnings rose 0.3 percent in May and 2.5 percent in the 12 months that ended in May, seasonally adjusted, the Labor Department reported.

But Democrats say paychecks are failing to keep up with the cost of living. After adjusting for inflation, average weekly earnings fell 0.4 percent last month and 0.5 percent in the 12-month period.

“I believe we can do better than rising costs and shrinking incomes,” Sen. John F. Kerry (Mass.), the likely Democratic presidential candidate, told an AFL-CIO convention last week.

Some economists also point to stagnant wages and eroding job quality as dark clouds looming over the economic recovery.

“Despite the well-advertised pick-up of job growth, recent trends in real wage income remain very disappointing,” lamented Stephen S. Roach, chief economist at Morgan Stanley, in a June 7 memo to clients. “This, in my view, underscores one of the most serious shortcomings of this recovery — an unprecedented shortfall of the most important piece of personal income growth,” wages and salaries.

Over the first 29 months of the economic recovery, total wages and salaries have risen less than 3 percent after adjusting for inflation — a fraction of the 9 percent gains of the previous six upturns, Roach said. That works out to a $280 billion income gap between where workers are and where they should be, he concluded.

CIBC World Markets, a Toronto-based investment banking firm, reached a similar conclusion in a report issued Monday. That study found that U.S. job creation since late 2001 has been concentrated in low-paying industries such as hospitality, education and personal services, while job losses have hit higher-wage sectors such as transportation, manufacturing, utilities and natural resources.

“The message is clear: The vast majority of the jobs that evaporated during the job-loss recovery were high-quality jobs,” the CIBC study concluded.

(To read the rest, click the title)

Stealth Candidate DeMint Wins SC Primary

By JENNIFER HOLLAND
Associated Press
Published on: 06/23/04

Three-term South Carolina Rep. Jim DeMint soundly defeated former Gov. David Beasley in a Republican runoff Tuesday to earn a spot on the November ballot for an important Senate seat that has been occupied by the same Democrat for almost 40 years.

With all precincts reporting, DeMint had 59 percent to Beasley’s 41 percent.

In Utah, billionaire businessman Jon Huntsman Jr., a Bush administration diplomat who also worked as a White House aide under Ronald Reagan, faced a lesser-known challenger in the Republican gubernatorial primary.

Utah is one of 11 states with governor’s races this year, and Huntsman was heavily favored to be the Republican nominee.

DeMint’s victory brings an end to a comeback attempt by Beasley, who was bounced from the governor’s office in 1998 after angering voters by calling for lowering the Confederate flag from atop the state Capitol.

DeMint will face Democratic state Education Superintendent Inez Tenenbaum this fall in a race that could help determine the balance of power in the Senate.

Despite South Carolina’s conservative leanings, Democrats believe they have a serious shot at maintaining the seat that retiring Sen. Ernest “Fritz” Hollings has held since Lyndon Johnson was in the White House.

They are confident that President Bush’s vulnerability and Tenenbaum’s moderate message could spell trouble for the GOP nominee.

Republicans see the race as a chance to solidify their Senate majority.

The GOP nominee will have the advantage of a Republican president at the top of the ticket in a state that gave Bush 58 percent of its votes in 2000.

Electronic Cards Replace Coupons for Food Stamps

By ROBERT PEAR

Published: NYT, June 23, 2004

WASHINGTON, June 22 — The Bush administration announced Tuesday that it had completed one of the biggest changes in the history of the food stamp program, replacing paper coupons with electronic benefits and debit cards.

At the same time, the administration said it wanted to rename the program because the term “food stamps” had become an anachronism. It is inviting the public to suggest how to update the name of a program that became a permanent part of the government, and the nation’s vocabulary, during Lyndon B. Johnson’s Great Society era.

Electronic benefits have replaced food stamp coupons in all states, and more than half the states now issue electronic benefits in place of welfare checks as well. In addition, some states are using debit cards for Medicaid and the Special Supplemental Nutrition Program for Women, Infants and Children.

Agriculture Secretary Ann M. Veneman declared an end to the “paper era” of the food stamp program on Tuesday at a conference of state officials here.

“This month the food stamp program arrived in the 21st century,” Ms. Veneman said. “States are destroying the paper coupons, and we don’t anticipate that we’ll ever have to print them again.”

Food stamp recipients generally like debit cards because they avoid the stigma that can be associated with the use of paper coupons. Grocers like the new technology because they are paid faster, often within 48 hours; cashiers do not have to handle vouchers; and there are no coupons to sort, count and bundle.

State officials said they preferred the electronic system because it was simpler to administer and helped reduce fraud and abuse by eliminating the paper coupons that can be lost, sold or stolen. Over the years, food stamps have been sold on the black market and used as a form of currency to buy narcotics and other contraband.

More than 23 million people receive food stamp benefits each month, but nationwide only three of five eligible people are participating. Unlike most other assistance programs, food stamps are available to most low-income households with few assets regardless of age, disability or family structure.