Elizabeth Warren on Welfare & Poverty

Massachusetts Senator; former head of CFPB; Dem. Presidential Challenger


Illusory that market will ensure enough affordable housing

The federal government has changed it's approach to housing. From the 1930's to the 1970's, The US government built millions of housing units, mostly built for families of modest means. By increasing the housing supply, prices stayed lower for all renters and buyers, particularly for those with moderate incomes. But in the late 1970's, federal policy changed, shifting to rental assistance that relied on giving cash or vouchers to renters, and then turning them loose to find their own housing. The unspoken premise was that "the market" would respond to the shortages and build enough housing units to solve the problem.

In 1999 Congress passed a law known as the Faircloth Amendment, requiring that not a single new unit of public housing could be built unless an existing unit of public housing was destroyed or sold to a private party. The magical market that would provide housing for everyone turned out to be an illusion.

Source: Persist, by Elizabeth Warren, p.148-149 , May 4, 2021

My housing plan deals with the after-effects of red-lining

It is not enough to talk about housing neutrally and just be race-blind. It is important to recognize the role that the federal government played for decades and decades in discriminating against African-Americans having an opportunity to buy homes.

[During] the housing crash of 2008, I was out there fighting for a consumer agency to make sure people never get cheated again on their mortgages. I have a housing plan, and what it has in it specifically is a piece to deal with the effects of red-lining. We can no longer pretend that everything is race-neutral. We have got to address race consciously, what's happening in this country.

Source: 10th Democratic Primary debate on eve of S.C. primary , Feb 25, 2020

Need race-conscious laws to overcome housing discrimination

Mayor Pete Buttigieg sidestepped a question about why the number of marijuana possession arrests among black residents in South Bend increased under his leadership. Rather than answer the question directly, Buttigieg instead said that that category of arrests was lower in his city than the national average. He then pivoted to discussing racism more broadly, before being called out by the moderator for deflecting.

When asked if Buttigieg's response was substantial, Warren replied simply, "No."

"It's important to own up to the facts about how race has totally permeated our criminal justice system," she said. Warren referenced her housing plan, saying that the United States needs to "start having race-conscious laws."

"It was the policy of the United States of America to discriminate against African Americans and any other people of color for buying homes until 1965," she said. "You can't just repeal that and say, 'Okay, now everything is even.' It's not."

Source: CNBC.com excerpts of 8th Democrat 2020 primary debate , Feb 8, 2020

Not enough housing: build 3M units and no discrimination

Our housing problem is on the supply side, and that means the government stopped building affordable housing. I've got a plan for 3.2 million new housing units. They are for families, the poor, for seniors, for people with disabilities, for people coming back from being incarcerated. The government has subsidized housing for white people and said black people are cut out of the deal. When I built housing, it's about addressing what is wrong about government-sponsored discrimination.
Source: November Democratic primary debate in Atlanta , Nov 20, 2019

Raise wealth tax rate for healthcare & affordable housing

Warren upped the wealth tax ante, raising her proposal's top rate to 6% as part of her blueprint to fund Medicare for All. To finance expanded affordable housing programs, she would lower the threshold that triggers the federal estate tax from $22.8 million to $7.0 million and raise the estate tax rate to as much as 75% on bequest values over $1 billion.
Source: The Nation magazine on 2019 Democratic primary , Nov 19, 2019

Need funding to help LGBTQ homeless youth

We know that LGBTQ youth are far more likely to end up homeless. And we know that part of that is rejection by their families.

I propose to expand our funding that is specifically targeted to LGBTQ youth who are homeless.

Source: CNN LGBT Town Hall 2020 , Oct 10, 2019

Wealth tax of two cents, to fund education and childcare

Q: Congressman Delaney, your estimated net worth is more than $65 million. That would make you subject to Senator Warren's proposed wealth tax on the assets of the richest 75,000 households. Is that fair?

DELANEY: I think wealthy Americans have to pay more. But the wealth tax will be fought in court forever. It's arguably unconstitutional.

WARREN: It's time to tax the top 0.1% of fortunes in this country. Your first $50 million, you can keep free and clear. But your 50 millionth and first dollar, you got to pitch in two cents. Two cents. What can America do with two cents? We can provide universal childcare from zero to five. We can raise the wages of every childcare worker and preschool teacher in this country. We can provide universal tuition-free college. We can put $50 billion into our historically black colleges and universities. It tells you how badly broken this economy is that two cents from the wealthiest in this country would let us invest in the rest of America.

Source: July Democratic Primary debate (first night in Detroit) , Jul 30, 2019

Bankruptcy filers are squeezed by economy, not irresponsible

To Warren, bankruptcy filers generally aren't trying to get out of debts racked up irresponsibly. "Many people in bankruptcy were solid bill payers until something knocked their legs out from under them," she said while describing her research in 2000. "For 2/3 of these people, it was loss of a job, for 40% it was a serious medical problem and for 20% it was the economic fallout of divorce."

Warren, in her book "The Two-Income Trap", and on a blog called Warren Reports on the Middle Class, which she wrote with some collaborators, pushed [that] view. Her argument was that structural shifts in American family and economic life had made middle-class finances more fragile, leading to a spike in bankruptcies induced by job losses or medical problems. She castigated the [2005 Congressional bankruptcy] bill as exacerbating the middle-class squeeze and as being an example of a broken politics working for special interests rather than average Americans. In her book,

Source: Vox.com on Warren's "The Two Income Trap" , May 6, 2019

Build 3.2 million new affordable housing units

Housing Plan -- Warren's housing plan would provide federal funding to build 3.2 million new affordable housing units, investing "$2 billion to support borrowers with negative equity on their mortgages, predominantly in suburban and rural communities," "down payment assistance to communities historically denied mortgages by the government," plus putting "$10 billion into a new competitive grant program that communities can use to build infrastructure, parks, roads, or schools."
Source: Current Affairs magazine, 2019 article series , Apr 16, 2019

Government should subsidize new home building

I have a proposal to build about 3 million new housing units across America. We need to make a real investment in housing. In the same way that we think about health care as a basic human right, having a decent and safe place to live should be a basic human right. Independent analysis from Moody's says that we would lower rents across this country by about 10 percent -- that's across the board -- and we'd create an opportunity for more people to become buyers.
Source: CNN Town Hall on 2020 Democratic presidential primary , Mar 18, 2019

Focus on poverty, not corporate profit: raise minimum wage

Today in America, a full-time minimum-wage job will not keep a mama and a baby out of poverty. I am in this fight because I believe that is wrong. Washington once asked the question, at least on minimum wage, "What does it take to support a family, to get a little toe in the door?" Today, they ask, "What will improve the profitability of giant multinational banks?" I want a government that doesn't work for giant multinational corporations. I want one that works for little families like mine.
Source: CNN Town Hall on 2020 Democratic presidential primary , Mar 18, 2019

Address housing crisis by assisting cities & homebuyers

Warren's most intriguing plans concern housing. High rents in productive cities limit opportunity and economic growth. Warren proposes to coax cities into changing restrictive development rules for a share of a large pot of money--$10B in total--while also funding large public-housing developments. She also wants the federal government to assist first-time homebuyers in formerly segregated neighborhoods.
Source: The Economist "Wonkish Populism," on 2020 Democratic primary , Feb 9, 2019

Rental market has discrimination just like housing market

Discrimination in the rental market is widely documented. This sort of discrimination has been going on for a long time: favoring white renters while turning away black renters, for instance, is pretty much what was happening in some of President Trump's apartment buildings back in the 1970s.

The housing collapse wiped out trillions of dollars in family wealth nationwide, but the crash hit African Americans and Latinos like a tidal wave. And the hit was doubly hard because these were the families that generation after generation, had already been aggressively discriminated against in housing. Restrictive deeds, land sales contracts, redlining--American history is littered with examples of housing laws and lending strategies that were designed to deny black and Hispanic families mortgages.

For most middle-class families in America, purchasing a home is the best way to build financial security. And it worked that way, for much of the twentieth century, at least for white Americans.

Source: This Fight is Our Fight, by Sen. Elizabeth Warren, p. 40-1 , Apr 18, 2017

Strong safety net is needed now more than ever

The modern economy can be perilous, and a strong safety net is needed now more than ever. Strengthen disability coverage, retirement coverage, and paid sick leave. And for heaven's sake, get rid of the awful banker-backed bankruptcy law, so that when things go wrong, families at least have a chance at a fresh start.
Source: The Two Income Trap, by Elizabeth Warren, p.xxii , Apr 12, 2016

Those in poverty fight for crumbs left over from the wealthy

The suggestion that we have become a country where those living in poverty fight each other for a handful of crumbs tossed off the tables of the very wealthy is fundamentally wrong. This is about our values, and our values tell us that we don't build a future by first deciding who among our most vulnerable will be left to starve.
Source: Quotable Elizabeth Warren, by Frank Marshall, p.100 , Nov 18, 2014

Nobody should work full-time and still live in poverty

Q: Are the Republicans going to take back the senate?

SEN. WARREN: Take a look at the House if you want to see what happens when Republicans take over. What are they on now, is this their fiftieth vote to repeal Obamacare? That's not how you run a country. We have real issues we need to deal with. Minimum wage, student loan debt, equal pay for equal work, a little accountability for the big financial institutions.

Q: Your fans say you're a populist, but your critics say you're just basically a socialist.

WARREN: I just don't know where they get that. You know, look at the issues. Minimum wage? I just believe nobody should work full time and live in poverty. And you know what? Most of America agrees. Student loans, I don't think the U.S. government should be making tens of billions of dollars in profits off the backs of our students, which is what the current student loan system is doing. And I think most Americans agree with me on that.

Source: Face the Nation 2014 interview: 2016 presidential hopefuls , May 11, 2014

Foreclosures made recession's biggest victims

The White House and Treasury fretted over what to do. Rescuing everyone from foreclosure was impossible; it would create huge moral hazard, not to mention costing taxpayers another trillion dollars. But Elizabeth Warren's congressional oversight panel was scathing in an October report. Warren said the administration's plan didn't keep pace with the huge flow of foreclosures and did little to help the recession's biggest victims: the unemployed and those with subprime mortgages.

By the end of his first term, Obama would likely be able to say that he helped a few million Americans avoid foreclosure. Of course it wouldn't be much to brag about because millions more would be forced from their homes.

Source: The Promise: Obama Year One, by Jonathan Alter, p.319 , May 18, 2010

Make a balanced, sustainable lifetime financial plan

Have you ever wondered why one person can manage just fine on $40,000 a year, while another person is in big trouble on $140,000?The difference comes down to one simple, but very powerful, idea: Get your money in balance.

What is balance? You've heard of a balanced diet, with enough of each of the basic food groups. Balancing your money follows the same general idea. The right amount of this, the right amount of that, and not too much of any one thing--and you have the formula for a sustainable, lifetime plan. When your money is in balance, you spend just the right amount on each of your major expense categories.

This is just like a diet where you look at carbs, your protein, and your fat intake.
Source: All Your Worth, by Elizabeth Warren, p. 13-4 , Jan 17, 2006

Balanced Money Formula: must-haves vs. wants vs. savings

There is always enough for each of the 3 categories. Must-Haves, Wants, and Savings each follow a preset formula, so that they are always balanced against each other. So, what's the formula? Here it is:Why 50%? There are 3 simple reasons.
  1. It is sustainable.It's not about getting straight with your money for a month; it's about getting straight for life.
  2. It is safe.When everything is going well, you should have the money for what you Must-Have and for what you Want. Suppose you get laid off? With Must-Haves at 50%, your unemployment check could cover your needs for several months.
  3. It has been tested over time.That number worked for Americans for a long time. A generation or so ago, most families spent half (or less) of their incomes on the Must-Haves. Getting rich, little by little, was commonplace; people did it every day. People also WORRIED less--a whole lot less.
    Source: All Your Worth, by Elizabeth Warren, p.26-9 , Jan 17, 2006

    For non-wealthy, financial house is built on sand

    You have only so much time and energy to focus on money. You need to work, to fix the car, to take care of your kids (or your cat or your girlfriend), and do a zillion other things besides getting straight with your money. There just isn't TIME to chase down every possible financial detail to perfection. We once counseled a man who watched every penny--to the exclusion of watching his dollars. Roberto was a fanatic sale chaser. He also kept the most meticulous financial records we have ever seen.

    And you know what? Roberto owed thousands of dollars to the IRS because he hadn't gotten around to filing his tax returns in the last three years. He didn't have car insurance or health insurance. And he hadn't saved a nickel for retirement. Every week Roberto spent hours saving pennies and updating his financial records. But when it came to what really mattered, his financial house was built on sand.

    So, what's the alternative to counting the pennies? Follow the steps in All Your Worth.

    Source: All Your Worth, by Elizabeth Warren, p.63-4 , Jan 17, 2006

    Refinancing mortgages shouldn't require more debt

    There are lots of people (including a number of so-called financial experts) who will tell you that it's smart to "cash out" your home equity and take on a bigger mortgage. Well, we're here to tell you it isn't smart. In fact, it is just plain dangerous. You are just borrowing money that you will have to pay back someday--and you are doing it in the most dangerous way possible. If something goes wrong and you can't pay, the mortgage company gets to take away your house. Just remember this simple rule: When you refinance your mortgage, don't let the bank talk you into taking on a single dollar of new debt.
    Source: All Your Worth, by Elizabeth Warren, p. 83 , Jan 17, 2006

    Home equity is a trap: can't borrow your way out of debt

    "Tap into your home equity!" "Consolidate your debt!" "Lower your interest payments sand save money on taxes!" The drive toward second mortgages and home equity lines of credit is practically a national fever. And if you are facing a mountain of debt, it can certainly sound tempting.

    Well, it isn't smart. In fact, it's dangerous. Really, really dangerous. Borrowing against your home to pay off other debt violates the first principle of debt-free living: You can't borrow your way out of debt. Ever.

    1. Home equity loans put your home at risk. If you make all your payments, the lender can take away your home.
    2. You probably won't save very much. The money you save on interest is very small, often less than the fees you paid to set up the loan.
    3. The only way to tap your home equity is to sell your home. You should rest easy that you are putting your home equity to work exactly as you should be: You're keeping a roof over your head.
    Source: All Your Worth, by Elizabeth Warren, p.149-52 , Jan 17, 2006

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