RCRWireless reprinted part of T-Mobile's response:

“Although your letter states that carriers’ prices for text messaging appear to have increased since 2005, the opposite is true,” states Robert Dotson, president and CEO of T-Mobile USA Inc. “Since 2005, the prices that T-Mobile charges for text messages — 90% of which are purchased in texting package plans — have fallen by more than half.

AT&T came right out and (almost) blamed Senator Kohl for the spate of lawsuits:

“As you probably know, since your letter was made public, 20 class-action lawsuits have been filed around the country against AT&T and other national carriers, specifically alleging price-fixing for texting messaging services. All but one of these cases cite your inquiry as one of the bases of alleged collusion. We are therefore eager to clear up any misunderstanding,” said Timothy McKone, executive VP for federal relations at AT&T.

If fees for text messaging bundles have dropped, while fees for single-serve text messages have shot up 20 cents, then in a way both sides are right—but if that's the case, we think the carriers are being intentionally dense about the true meaning of the Senator's line of questioning, which (we think) is an attempt to determine whether the carriers colluded to hike individual rates enough to drive customers into more profitable bundle services.

Wireless carriers counter antitrust concerns over rising costs of texting [RCRWireless]
(Photo: Getty Images)

The bailout will be expanded to pension plans, local governments, and community banks. Here are the details as reported by Reuters:

• The $700 billion in buying power would be doled out by Congress in stages. After the first $250 billion is authorized, the President could request another $100 billion. The final $350 billion could be cleared by a further act of Congress.
• Washington will take a stake in companies helped through the program so that taxpayers can share in the profits if those companies get back on their feet.
• A new congressional panel would have oversight power and the Treasury secretary would report regularly to lawmakers in two elements of a multi-level oversight apparatus.
• Compensation limits would be set for the chiefs of participating firms to prevent excessive pay and "golden parachutes" for those who might tap government aid and then quit.
• The federal government may stall foreclosure proceedings on home loans purchased under the plan.
• Alongside the plan to buy securities outright, the Treasury Department will conceive an alternative insurance program that would underwrite troubled loans and would be paid for by participating companies.
• If the government has taken losses five years into the program, the Treasury Department will draft a plan to tax the companies that took part to recoup taxpayer losses.

Both parties will now release their Whips into the horde of election-weary members. Expect an exciting (yes, exciting) vote late tonight before the Asian markets open.

Lawmakers Reach Tentative Bailout Deal [WSJ]
PREVIOUSLY: BREAKING: Congress Has A Bailout Plan
(Photo: Associated Press)

CNN says:

Both parties and both houses agreed Thursday to a set of principles on revisions to the rescue plan, which calls for the Treasury Department to buy up bad mortgage securities from banks in an effort to get them to lend again.

The proposal will help homeowners, curb executive pay packages at participating firms and provide oversight of Treasury's actions, said Sen. Christopher Dodd, D-Conn., a key architect of the congressional effort. He did not provide details but said lawmakers will sit down with Treasury officials to discuss it.

"We've reached a fundamental agreement on a set of principles, one, for taxpayers, which is tremendously important," Dodd said.

Americans should "legitimately feel better about the overall approach," said Rep. Barney Frank, D-Mass., who heads the House Financial Services Committee.

CNN also noted that the stock market was up over 300 points on news that a bailout may be forthcoming.

Congress has a plan [CNN]

Why Personal Letters Beat Form Letters
Don't get suckered in by the quick and easy "Write to Congress!" form letters littering the internet. Form letters are not an expression of values; they are a show of organizational strength. If the NRA convinces five million people to send letters opposing gun control, it shows that the NRA can muster five million people to action, not that five million people necessarily care about gun laws. Congressional offices know this and generally disregard form letters.

So what happens when you send a letter?

Every office has its own procedures for tabulating constituent correspondence, but most will produce a report at the end of week breaking down how many letters were received by issue area, separating out form letters from letters sent by individual constituents.

Members treat each type of letter differently, but most look for individual letters as a barometer of their district's concerns. These are the letters that have the most influence, the ones we will show you how to write.

What Should Your Letter Say?
We adhere to the three paragraph rule: introduce yourself, introduce your issue, request action. Congressional offices have staffers whose days are spent solely on the mail, so make their lives easier by keeping letter succinct and to the point.

• Introduce Yourself: There is a two-prong test for determining your worth: 1) Are you a constituent? 2) Are you an important constituent? Feel free to puff up your chest. Are you a lifelong member of the district? Are you associated with community groups? Say so! Convince the reader that yours is a voice of experience and wisdom.
• Be specific: Don't just ask a Member to oppose mandatory binding arbitration agreements. Ask them to rush to the floor to support S.1782, The Arbitration Fairness Act of 2007.
• Marshall Facts: Your argument—and you are making an argument—must be supported by facts. Feel free to use facts gleaned from us or other sources, but don't copy and paste paragraphs of pre-written text from form letters. Personal experiences are particularly effective, and often moving. Share them!
• Be Exceedingly Polite, Please: Congress attracts haughty personalities. Staffers don't appreciate being spoken down to or insulted. You are trying to rally them to your cause, so be nice.
• Clearly State Your Request: Plainly tell your representative that you want them to support or oppose a certain bill. If you want a response, explicitly (but politely) ask for one.

Send Your Letter To The Right Place
Only write to your representatives. You have three: one Representative in the House, and two Senators. Do not send more than three letters. Some citizens try to get their voice heard by writing to all 435 members of the House. Congressional courtesy compels the 434 Members who do not represent the zealot to forward his letter to the one lucky Member who does. This angers the Member's staff greatly at the expense of any point you are trying to make.

The addresses for your Representatives and Senators are available online, but don't waste your time with an email. Letters carry significantly more weight. Send your letter to the Capitol, where the legislative staff is based, though it will take a while to arrive since all incoming Congressional mail is irradiated thanks to those still-unidentified Anthrax mailers.

For an even greater impact, send your letter care of the staffer covering the issue. These staffers - called Legislative Assistants - are the Member's eyes and ears on their assigned issue areas. Finding the staffer destined to read your letter is easy: call the Capitol switchboard (open 24 hours a day!) at (202) 224-3121, ask for your Member's office, and ask the person who answers for the name of the staffer handling the issue area or bill number. Once you get that name, address your letter like this:

Member Of Congress
c/o Staffer
Office Building/Number
Washington, DC 20515

What Should You Expect In Return?
It depends. There are 535 Congressional offices and each handles constituent correspondence differently. The vast majority respond to letters with either a form letter pre-written by a Legislative Assistant, or with a more personal response written by a Legislative Correspondent. Controversial issues that attract many letters normally receive a form letter response, while smaller issues or specific questions often receive the attention of a personalized response.

Conclusion
Members of Congress work for you. Without your votes, they won't stay in office. They go to great lengths to cultivate a positive relationship with you, their boss. Very few people take the time to write to a Member of Congress, so the few that do carry a disproportionate influence.

Fifteen minutes is well worth the time to influence a $2 trillion enterprise.

(Photo: indi.ca)

The New York Times says:

But one after another, senators from both parties said that, while they were prepared to move fast, they were far from ready to give the administration everything it wanted in its proposed $700 billion plan to buy up and hopefully resell troubled mortgages.
...
Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Senate banking panel, called the Treasury proposal “stunning and unprecedented in its scope and lack of detail.”

Asserting that the plan would allow Mr. Paulson to act with “absolute impunity,” Senator Dodd said, “After reading this proposal, I can only conclude that it is not only our economy that is at risk, Mr. Secretary, but our Constitution, as well.”

Another expression of disgust came from Senator Jim Bunning, Republican of Kentucky, who said the plan would “take Wall Street’s pain and spread it to the taxpayers.”

“It’s financial socialism, and it’s un-American,” Mr. Bunning said.

Paulson responded that he was "angry" at Wall Street and that he needed the bailout not for the fat cats who bet badly and lost, but for you, the taxpayer.

“This is all about the taxpayers. That is all we are about,” said Paulson, who was formerly the CEO of Goldman Sachs for 7 years before becoming Secretary of the Treasury in 2006.

Finance Officials Face Wary Lawmakers [NYT]
(Photo:Andrew Councill for The New York Times)

From ABCNews:

In court documents, federal prosecutors say UBS bankers helped set up many of the secret accounts in Liechtenstein and, overall, hid as much $20 billion belonging to US citizens.

"Sums are enormous and UBS appears to have been particularly aggressive in the way they marketed their activities in the US and elsewhere," said Christensen. "So UBS is extremely vulnerable to losing their license in the US."

One UBS banker, Bradley Birkenfield, pleaded guilty last month and admitted to smuggling cash and diamonds for Americans trying to hide their wealth from the IRS.

In federal court documents obtained by ABC News, federal prosecutors allege that Birkenfield's bank trained bankers traveling to the US in "techniques to avoid detection" by law enforcement authorities, "including training bankers to falsely state on customs forms that they were traveling into the United States for pleasure and not business".

There will be Senate committee hearing tomorrow and ABC says that "among those called to testify are foreign bank account holders, including one of the wealthiest men in Los Angeles," and that the tax dodgers could face criminal prosecution.

Hundreds of Super Rich Under Investigation [ABCNews]

Kieber reportedly sold three CD's full of names and data to tax authorities to 12 countries including Germany, Great Britain, France, Italy and the United States.

Tax authorities in Italy published the full list of names.

In Germany, the disclosures led to the arrests of several prominent CEO's on charges that had evaded millions of dollars in taxes.

A former UBS private banker, Bradley Birkenfeld, has agreed to a plea deal and is reported to be cooperating with US authorities in bring charges against American citizens on tax evasion charges.

The Liechtenstein bank, LGT, is owned by the tiny country's ruling family led by Prince Hans-Adam II.

Kieber's Washington lawyer, Jack Blum, says Kieber should be considered a whistleblower and a hero, not a thief, for revealing how the super rich hid billions of dollars using the Liechtenstein bank.

Whatever you think of thieves (we're not fond), you have to admit that it takes serious balls to be comfortable pissing off a fairly large percentage of the world's super-rich and powerful tax evaders.

Day of Reckoning? Super Rich Tax Cheats Outed by Bank Clerk [ABC News]

We're curious what Senator Obama and Senator McCain have to say about this—particularly, whether Obama will vote speak out against it. Oh wait, he's too busy campaigning to weigh in on important issues, right? Because that's how career politicians work. (End of rant on politicos not doing their jobs.)

"Deal clears way for wiretap-law overhaul" [CNN]
New FISA Bill Would Grant Telcoms Immunity; Vote Is Tomorrow" [Slashdot]
(Photo: Getty)

Here's what happened: Senate Majority Leader Harry Reid (D-NV) filed a motion for cloture—Senate-speak for shut-up and stay on topic—which requires a supermajority of 60 votes for approval. Without cloture, Senators can yack forever like a bunch of riled-up monkeys. The vote on cloture failed 49-42, empowering Republicans to filibuster our beautiful piece of legislation into the ground.

What protections have Senate Republicans stolen from you? Let's look at Senator Rockefeller's (D-WV) substitute amendment sporting the new, improved Passenger's Bill of Rights:

TITLE IV—AIRLINE SERVICE AND SMALL COMMUNITY AIR SERVICE IMPROVEMENTS

SEC. 401. AIRLINE CONTINGENCY SERVICE REQUIREMENTS.

(a) IN GENERAL.—Chapter 417 is amended by adding at the end the following:

SUBCHAPTER IV—AIRLINE CUSTOMER SERVICE ``§.41781. AIRLINE CONTINGENCY SERVICE REQUIREMENTS.

(a) IN GENERAL.—Not later than 60 days after the date of enactment of the Aviation Investment and Modernization Act of 2008, each air carrier shall submit a contingency service plan to the Secretary of Transportation for review and approval. The plan shall require the air carrier to implement, at a minimum, the following practices:

(1) PROVISION OF FOOD AND WATER.—If the departure of a flight of an air carrier is substantially delayed, or disembarkation of passengers on an arriving flight that has landed is substantially delayed, the air carrier shall provide—

(A) adequate food and potable water to passengers on such flight during such delay; and

(B) adequate restroom facilities to passengers on such flight during such delay.

(2) RIGHT TO DEPLANE.—

(A) IN GENERAL.—An air carrier shall develop a plan, that incorporates medical considerations, to ensure that passengers are provided a clear timeframe under which they will be permitted to deplane a delayed aircraft. The air carrier shall provide a copy of the plan to the Secretary of Transportation, who shall make the plan available to the public. In the absence of such a plan, except as provided in subparagraph (B), if more than 3 hours after passengers have boarded a flight, the aircraft doors are closed and the aircraft has not departed, the air carrier shall provide passengers with the option to deplane safely before the departure of such aircraft. Such option shall be provided to passengers not less often than once during each 3-hour period that the plane remains on the ground.

(B) EXCEPTIONS.—Subparagraph (A) shall not apply—

(i) if the pilot of such flight reasonably determines that such flight will depart not later than 30 minutes after the 3 hour delay; or

(ii) if the pilot of such flight reasonably determines that permitting a passenger to deplane would jeopardize passenger safety or security.

(C) APPLICATION TO DIVERTED FLIGHTS.—This section applies to aircraft without regard to whether they have been diverted to an airport other than the original destination.

(b) POSTING CONSUMER RIGHTS ON WEBSITE.—An air carrier holding a certificate issued under section 41102 that conducts scheduled passenger air transportation shall publish conspicuously and update monthly on the Internet website of the air carrier a statement of the air carrier's customer service policy and of air carrier customers' consumer rights under Federal and State law.

(c) REVIEW AND APPROVAL; MINIMUM STANDARDS.—The Secretary of Transportation shall review the contingency service plan submitted by an air carrier under subsection (a) and may approve it or disapprove it and return it to the carrier for modification and resubmittal. The Secretary may establish minimum standards for such plans and require air carriers to meet those standards.

(d) AIR CARRIER.—In this section the term `air carrier' means an air carrier holding a certificate issued under section 41102 that conducts scheduled passenger air transportation.''.

(b) REGULATIONS.—Not later than 60 days after the date of enactment of this Act, the Secretary of Transportation shall promulgate such regulations as the Secretary determines necessary to carry out the amendment made by subsection (a).

So what's different from the old versions?

• Compliance: Airlines now have 60 days, not 90 days, to get their act together and slap together a contingency plan;
• Advertising: Congress wants this Bill of Rights placed "conspicuously" on each arline's website. No burying the Bill of Rights in a site index;
• Not Just For Departures: The substitute amendment now covers delayed arrivals.

We're not wild about the absence of civil penalties, or empowering pilots to stall if they "reasonably determine" that take-off is less than 30 minutes away. As compensation for these losses, Senator Rockefeller tossed in this gem of a sweetener:

SEC. 402. PUBLICATION OF CUSTOMER SERVICE DATA AND FLIGHT DELAY HISTORY.

Section 41722 is amended by adding at the end the following:

(f) CHRONICALLY DELAYED FLIGHTS.—

(1) PUBLICATION OF LIST OF FLIGHTS.—An air carrier holding a certificate issued under section 41102 that conducts scheduled passenger air transportation shall publish and update monthly on the Internet website of the air carrier, or provide on request, a list of chronically delayed flights operated by the air carrier.

(2) DISCLOSURE TO CUSTOMERS WHEN PURCHASING TICKETS.—An air carrier shall disclose the following information prominently to an individual before that individual books transportation on the air carrier's Internet website for any flight for which data is reported to the Department of Transportation under part 234 of title 14, Code of Federal Regulations, and for which the air carrier has primary responsibility for inventory control:

(A) The on-time performance for the flight if it is a chronically delayed flight.

(B) The cancellation rate for the flight if it is a chronically canceled flight.

(3) CHRONICALLY DELAYED; CHRONICALLY CANCELED.—The Secretary of Transportation shall define the terms `chronically delayed flight' and `chronically canceled flight' for purposes of this subsection.''.

If an flight is chronically late, not only must the airline broadcast their shame on their website, but they must also warn travelers before selling tickets that their flight will likely be delayed.

The Passenger's Bill of Rights was tacked onto a much larger bill reauthorizing the FAA. Members of Congress could rip out the Bill of Rights and and pass it separately, but the Congressional calendar crowds up before elections, and our important little bill has little hope of standing out.

Like a Price Is Right Danger Price loser, we don't get the contingency plans; we don't get the food or water; and we don't get the chronically delayed flight notifications. We get nothing. Thanks, Senate Republicans!

Air safety, passenger rights bill hits dead end in Senate [AP]
On the Cloture Motion (Motion to Invoke Cloture on the Rockefeller Amdt. No. 4627 (Subst.) to H.R. 2881 ) [U.S. Senate]
(Photo: Getty)

"We really do literally have five or six major corporations in this country that determine for the most part what Americans see, hear and read every day," said Sen. Byron L. Dorgan (D-N.D.), the lead sponsor of the resolution. "I don't think that's healthy for our country."

Dorgan has 25 senators behind his bill, including Democratic presidential candidates Hillary Rodham Clinton of New York and Barack Obama of Illinois, and is confident it will pass the Senate. A similar bill has been proposed in the House.

The Bush administration has threatened a veto, but Dorgan could try to attach the resolution to a must-pass bill to make it harder for the White House to block.

Senate panel moves against FCC media-ownership rules [L.A. Times]
S.J. 28 - A Joint Resolution Disapproving The Rule Submitted By The Federal Communications Commission With Respect To Broadcast Media Ownership [THOMAS]
Write Your Senator
Write Your Representative
PREVIOUSLY: How To Write To Congress
(AP Photo/Jae C. Hong)

On Friday, February 15, 2008, the President signed into law:

H.R. 3541, the "Do-Not-Call Improvement Act of 2007," which prohibits the automatic removal of telephone numbers registered on the Federal "do-not-call" registry; and

S. 781, the "Do-Not-Call Registry Fee Extension Act of 2007," which extends permanently the authority of the Federal Trade Commission to charge fees to telemarketers required to access the Federal "do-not-call" registry and specifies the fees to be charged.

For anyone who doubts the list's usefullness, read one Ars Tech editor's experience:

My family recently moved into a new home, and with it, we received a new phone number (I didn't want a new one, but in Massachusetts they can be strict about towns and their exchanges). At our old house we had been covered by the DNCR, but at the new home, we weren't because we had a new number. It took one week, at most, before the unsolicited calls started. When they started, they were frequent and annoying. Life "off" the DNCR was horrible.

After about another week of putting up with it (it just sat on a long "to do list" as we attended to other move-in crises), we finally got around to signing up our new number, and even though the Registry gives ample time for opt-out information to be followed by telemarketers, in reality we were spam-call-free within a week. In short, the DNCR works, it's fast, and telemarketers are by and large obeying it when expected.

Both measures passed the House on a voice vote and cleared the Senate by unanimous consent.

Statement by the Press Secretary [The White House]
Do Not Call Registry saved from mandatory reset [Ars Technica]
PREVIOUSLY:
Liveblogging The Do Not Call Improvement Act and CPSC Reform Act Committee Markups
FTC Vows Not To Expire Numbers From The Do Not Call List
Should Do Not Call List Registrations Last Forever?
(Photo: Getty)

"Whatever the senate does they should not delay this package. They should not keep money out of your pocket, the sooner you get a check, the more likely it is that the stimulus package will kick in and make a difference. So my attitude is if that if you're truly interested in dealing with the slowdown in the economy—the Senate ought to accept the House package, pass it, and get it to my desk as soon as possible."

(AP Photo/Tim Sloan, Pool)

She had been garnished by a credit card company, courtesy of one of those cavernous collections law firms with one attorney (if that) and about 100 paralegals. The firm had saved her bank account information from when she paid off another credit card company that also was a client of the firm. She did not know the second credit card company even had a judgment against her, and it took her a week to find out who garnished her because her bank wouldn't talk, and this was done without notice. This is all legal by the way.....

Eventually at the firm's suggestion, she began faxing paperwork to the credit card company's lawyers to "prove" the funds were SSI and SSA. They'd receive the fax, come up with some reason that the paperwork was insufficient, a page missing, a smudged entry, but never call back to tell her things were amiss. She'd finally follow up, and then she'd hear the next excuse. This went on for two more exasperating weeks. Finally, after much prodding (she was sure the account would be voluntarily released any day now), she sought legal counsel from a legal aid office, which seemed a bit overworked (obviously), and frankly a little peeved that she believed the credit card company's lawyers were ever gong to release this. She was dressed down for being optimistic and trusting.

Five weeks after the garnishment, she finally got access to her "exempt" funds, having skipped needed medication, rent payments, insurance payments, and who knows what else. She would NEVER have gotten an attorney at all if I had not begged her to do so. She does not trust lawyers and had no idea how to find one even if she did want one. And, she had family to lend her money. Most people in this position don't. The point is that things are worse than this for most people in her shoes, and many poorer people do not feel they have access to a lawyer. They are right in many cases. That is why it makes no sense to make the consumer prove the garnished funds are not SSI or SSA.

The five federal agencies responsible for regulating banks have drawn up nine best practices for banks to follow:

• Promptly notify a consumer when a financial institution receives a garnishment order and places a freeze on the consumer's account;
• Provide the consumer with information about what types of federal benefit funds are exempt, including SSA and VA benefits, in order to aid the consumer in asserting Federal protections;
• Promptly determine, as feasible, if an account contains only exempt federal benefit funds such as SSA or VA benefits;
• Notify the creditor, collection agent, or relevant state court that the account contains exempt funds in cases in which the financial institution is aware that the account contains exempt funds;
• If state law or the court order will permit a freeze not to be imposed if the account is determined to contain only exempt federal benefit funds, act accordingly if that determination is made;
• Minimize the cost to a consumer when the consumer's account containing exempt federal benefit funds is frozen, such as by refraining from imposing overdraft, NSF, or similar fees while the account is frozen or refunding such fees when the freeze has been lifted;
• Allow the consumer access to a portion of the account equivalent to the documented amount of exempt federal benefit funds as soon as the financial institution determines that none of the exceptions to the federal protections against garnishment of exempt federal benefit funds are triggered by the garnishment order;
• Offer consumers segregated accounts that contain only federal benefit funds without commingling of other funds; and
• Lift the freeze on an account as soon as permissible under state law.
• 
  

Think Public Benefits are Exempt from Execution? Think Again [Credit Slips]
(Photo: O Pish Posh)

H.R. 3010: Arbitration Fairness Act of 2007
What It Does: Prevents corporations from shackling consumers with extra-judicial mandatory binding arbitration agreements.
Status: Hearings held in both the House and Senate.

H.R. 2881: The Passengers Bill Of Rights
What It Does: Prevents airlines from caging passengers on planes for hours at a stretch without access to food, water, and restrooms.
Status:Approved by the House as part of the FAA Reauthorization Act, 267-151-14. Currently simmering in the Senate.

H.R. 3610: Food and Drug Import Safety Act of 2007
What It Does: Strengthens the FDA by granting the power to issue mandatory recalls.
Status: Hearings held in the House Energy and Commerce Committee.

H.R. 3541: Do-Not-Call Improvement Act of 2007
What It Does: Makes Do Not Call List registrations permanent.
Status: Approved by the House. Floor debate pending in the Senate.

H.R. 1525: Internet Spyware (I-SPY) Prevention Act of 2007
What It Does: Subjects spyware makers to jail terms and multi-million dollar fines.
Status: Approved by the House, languishing in the Senate.

S. 2045: CPSC Reform Act of 2007
What It Does: Gives the CPSC the staff and support it needs to do a slightly less pitiful job.
Status: Passed by the Senate Commerce Committee. Companion legislation unanimously approved by the House.

S. 2033: Cell Phone Consumer Empowerment Act of 2007
What It Does: It's the most impressive bill of the 110th Congress. It battles dragons and slays evildoers.
Status: Hearing held in the Senate Commerce Committee.

H.R. 4332: Financial Consumer Hotline Act of 2007
What It Does: Establishes a consumer hotline for banking complaints.
Status: Introduced, stuck in the House Financial Services Committee.

H.R. 3915: Mortgage Reform and Anti-Predatory Lending Act of 2007
What It Does: Attempts to prevent a recurrence of the subprime meltdown by tightening oversight of the mortgage industry.
Status: Approved by the House 297-127-14. The Senate Banking Committee is slow-mulling companion legislation.

H.R. 3678: Internet Tax Freedom Act Amendments Act of 2007
What It Does: Keeps the internet nice and tax-free until 2014.
Status: Signed by the President! Now known as Public Law No: 110-108.

H.R. 946: Consumer Overdraft Protection Fair Practices Act
What It Does: Caps overly-punitive debit card fees.
Status: Introduced, stuck in the House Financial Services Committee.

S. 704: Truth in Caller ID Act of 2007
What It Does: Bans caller ID spoofing.
Status: Approved by the House. Passed the Senate Commerce Committee.

H.R. 698: Industrial Bank Holding Company Act of 2007
What It Does: Bans Walmart from opening a bank.
Status: Approved by the House 371-16-45, dead in the Senate Banking Committee.

H.R. 2669: College Cost Reduction and Access Act
What It Does: Steals money from rich student loan companies and gives it to students.
Status: Signed by the President! Now known as Public Law No: 110-84.

At the request of the chicken industry, the Senate farm bill would add chicken to the list of meats that would be labeled by country of origin beginning Oct. 1. Chicken producers have taken the opposite position of most beef and pork groups, which have opposed labeling. Richard Lobb, a spokesman for the National Chicken Council, said the industry asked Senate leaders to add chicken to the list because other countries have expressed an interest in exporting chicken to the United States and consumers are becoming increasingly concerned about the origin of food. Lobb noted that 95 percent consumed in the United States is domestically produced, but the Agriculture Department has granted Chile the right to export chicken to the United States and is considering an application from China.

Senate Slips Chicken Into COOL Farm Bill Provision [Cattle Network]
(Photo: foxypar4)

Bloomberg observes:

"The agency's loan terms, which are more stringent than those of many lenders, may have caused some borrowers to turn to subprime mortgages. Housing officials estimate that the legislation will help about 200,000 homeowners who have fallen behind on their mortgage payments."

"This legislation is the perfect example of the kind of help Americans are looking for," Senator Charles E. Schumer, a New York Democrat who was a sponsor of the bill, said on the Senate floor. "It is definitely and desperately needed."

Senate Passes Bill Easing Home Loan Rules [New York Times]
Senate Passes Bill to Address Housing Crisis [Wall Street Journal]

Today's hearing will feature two panels. First, three aggrieved consumers will share their horror stories. Then, the presidents of Discover, Bank of America, and Capitol One will explain that the three consumers who just testified are not at all representative of average cardholders. Right.

The tears and lies start flowing at 9:30 a.m.
(Photo: samwilkinson)

9:25: Two choices for your viewing and listening pleasure: Video Link—Audio Link
9:34: And we're off. Levin has arranged for an interesting hearing. The first consumer we will hear from is Janet Hard. Janet is married to a steamfitter. She has a Discover card that jumped from 18% to 24% because her FICO score dropped. When Janet complained, the rate dropped to 21%. Discover's President will testify today.

9:37: Levin is most incensed by the retroactive nature of rate increases. Take a consumer whose debt jumps from 15% to 27%. That new rate applies not to new debts, but to all incurred debts.

9:41: Bonnie Rushing has two Bank of America cards. One is associated with AAA. Both cards had an 8% rate. BoA bumped the AAA rate from 8% to 23% because Bonnie's FICO score fell. It didn't matter that her payment history was perfect. Bonnie isn't sure why her FICO score dropped, but she thinks it may be because she opened a store-branded card at Macy's to receive an immediate 10% discount on a purchase, unaware that it would affect her FICO score.

9:43: When Bonnie received the rate-increase notice, she opted-out and closed her account. BoA tried to pressure her to keep the new, higher rate, but after she complained to state and federal authorities, BoA let her close her account. BoA's president will testify today.

9:44: Capital One raises rates by looking for accounts that haven't been bumped in three years—but they don't use FICO scores.

9:44: One consumer was hit by three rate increases in three months. Oftentimes the rates doubled or tripled. The consumer was able to reduce her rates by calling and fighting the credit card companies.

9:46: Levin: "If you shop with a credit card, as most consumers do, dangers lurk."

9:46: Most people don't realize that their FICO score drops even if they approach—not exceed, approach—their credit limit.

9:47: The Committee asked who determines a FICO score, who determines when a rate jumps because of a FICO score. The answer: computers.

9:47: Issuers don't know why a FICO score drops. They have four "reason codes," generic statements like: "balance grew too fast compared to credit limit," or "balance on bank cards is too low."

9:48: By law, consumers are entitled to know who supplies credit data. Even with this data, few consumers realize that a rate hike was caused by a lower FICO score.

9:50: When Janet Hard received her rate increase notice, she was told that it was because her balances were too high and her accounts were delinquent. When pressed, Discover couldn't explain which balances were too high, or which accounts were delinquent.

9:51: Levin does not want any increases for consumers who pay their bills on time. At least not retroactive increases.

9:53: Credit card companies have drop rates when the Subcommittee calls to inquire about an account.

9:55: Levin's solution is S. 1395, which would:

"bar companies from charging interest on debt paid by the due date, cap penalty interest-rate increases, prohibit interest from being charged on late fees or over-the-limit fees and prohibit late fees if a card-issuer delays crediting a payment."

9:55: Senator Norm Coleman (R-MN) is claiming that the nature has credit has changed. It used to be something you earned. Now, creditors are tossing cards like confetti.

9:56: It seems like a personal problem, but it has nationwide implications.

9:57: For background: Abusive credit card practices affect everyone. In a country of 300 million, we charged more than $1.8 trillion dollars on over 691 million credit cards in 2005. Back in the eighties, Americans charged about $70 billion per year.

9:57: Coleman argues that the democratization of credit has helped America, but it has been tainted by federal regulations that raise rates. Eh? Coleman asked credit card companies to regulate themselves so Congress can focus on something else. Apparently, his strategy of "Be Nice, Please" is working. Double-cycle billing is now a thing of the past. See, no federal regulation needed. "These are serious steps and constitute self-reform."

9:59: 'There is a competitive advantage to offering fair user-friendly offers.' Sure, but nobody does. At least he realizes that there still massive problems, with universal default and rate increases out of the blue.

10:00: Claire McCaskill (D-MO) argues that even lawyers can't understand credit card offers.

10:01: Creditors hate closing accounts. You can't call, or write on a bill that you want your account closed. You have to write a separate letter.

10:02: Senator McCaskill's mother wrote in that she wanted to cancel her credit card. That didn't stop them from sending her checks for the holiday season that would re-activate the card.

10:03: Excellent: McCaskill is calling credit card debt "The Next Subprime Disaster ^TM." She is absolutely right.

10:04: If the credit card companies won't stop financially raping Americans, McCaskill wants to break out some serious regulation.

10:04: Senator Tom Coburn (R-OK) has no opening statement.

10:05: Interesting: Levin is swearing in the witnesses. Most testimony is not sworn—there is simply no need. Lying to Congress is a felony that carries up to five years in jail.

10:06: Here is Janet Hard, the consumer with the Discover cards.

10:06: Janet is a registered nurse turned stay-at-home Mom.

10:07: She used credit cards to make ends meet, which is always a losing strategy. She figured that she could make boost her income when she went back to work when she stopped taking care of her kids.

10:07: She learned about the rate increases only after she realized that her payments were no longer reducing her debt at the usual clip.

10:08: Janet was initially told that the rate was increased because of a spot credit check. When she called to complain, Discover agreed that she was an excellent customer, but refused to drop the rates.

10:08: She also has an HSBC account, which accesses the same credit data. HSBC did not raise her rates.

10:09: She does not want to shirk her debts. She wants to be treated fairly. "We feel as though we've been robbed."

10:10: Onto Bonnie Rushing. Downsizing cost her a job and income security, but she never missed a credit card payment.

10:11: Still, the rate on her BoA AAA card unexpectedly tripled. Bank of America said that she had been sent a change in terms notice without responding, and so her rate was bumped. Bonnie could no longer refuse the rate or close the account.

10:13: Bonnie tries escalating to a supervisor, who offered to renegotiate the rate down from 23% to 21%, still much higher than the 7.9% Bonnie had enjoyed.

10:14: AAA intervened and was able to press BoA into accepting the original, fixed rate of 7.9%

10:15: A bank executive told Bonnie that the change was made because she was a "good long-standing customer whose business they did not want to lose."

10:15: Bonnie took her experiences with the call center very seriously. More than anything, she's upset that they treated her without respect, without realizing that she was a decent person who was trying to responsibly pay off her debts.

10:16: Onto Millard Glasshof, who has been retired since 1992. He's here with his wife.

10:16: In 1997 he received a MasterCard with Bank One. He originally agreed in 2004 to payoff a balance of over $5,000 at 14%.

10:17: In March 2005, Chase took over Bank One and bumped the rate to over 17%.

10:18: Millard had never missed a payment. Chase could not explain the increase.

10:19: He received a letter, which he didn't understand. He thought it said that his new payments were $111. He called to confirm, which Chase did. When he paid $111, Chase hit him with fees for insufficient payments.

10:20: After the Subcommittee looked into his situation, Chase miraculously dropped his rate to 6%.

10:20: Janet's original debt was over $8,000. She made only $500 in new purchases. Of $2,400 in payments last year, $1,900 went towards interest, not the principal.

10:22: Janet had no idea that her rate increase was triggered by her credit score. Her rates were dropped back to their original levels after the Subcommittee started asking questions.

10:23: Millard had $4,800 in debt. Last year he made no new purchases, but did pay $1,100 in interest and $200 in fees. He made $1,300 in payments and still owes $4,800.

10:24: Millard had no idea why his rate was increased.

10:24: He hasn't missed a payment in two-and-a-half years.

10:24: Chase says that an automated review of closed accounts, like Millard's, showed that his FICO score had dropped, triggering a rate increase.

10:25: Levin is really pissed that these rate increases are retroactive. More troubling, none of the consumers testifying realized that rate increases applied to past debts.

10:28: We remember a program we watched some years ago—it may have been Frontline's look into credit cards—when our favorite debt-expert, Elizabeth Warren, explained that credit cards are the only financial instruments that retroactively raise the price of goods after purchase. How would you feel if the guy at the electronics store knocked on your door, pointed to the TV in your living room, and said "By the way, that now costs $500 more. Pay up." We hadn't thought of it like that before, and it bothered us greatly.

10:32: It may have been this Frontline episode. Well worth watching.

10:33: Back to the hearing. Senator Coleman wants to know why the consumers didn't receive (or read) the notices from credit card companies.

10:33: Millard is arguing that he never read in any of his notices that his rate was increasing. That would have helped.

10:34: Janet thinks notices from credit card companies are deliberately misleading.

10:34: Coleman: "Do you know what the U.S. Prime Index is?"
Janet: "No, I do not."
Coleman: *stunned silence*

10:35: Coleman: "I'm trying to figure out what, if anything, we can do with notices." He thinks Janet was pretty much screwed from the start because of her debt levels. She had no hope. All her fault. "You may have been treading water, you may have treading for a long time."

10:36: We have an idea for notification, Senator. If a credit card wants to increase a rate, they should sent a notice. The notice should have two lines in massive fonts that show:

• Your Current Rate;
• Your New Rate

10:41: Senator McCaskill is reading the paragraph that raised Millard's rate. Nobody understands what she is saying.

10:41: McCaskill: Did you call after you received this letter and ask what you were supposed to pay?
Millard: Yes.
McCaskill: Did they send any confirmation?
Millard: No.

10:42: Ok, we want back and found Elizabeth Warren's statement:

Frontline: But they would say they're just making capital or money available to people in a convenient way.

Warren: Well, in a convenient way, and changing the price after people borrow it. You know, that's a heck of a deal. I don't know any merchant in America who can change the price after you've bought the item except a credit card company. After you have borrowed the $5,000, they can change the interest rate from 9.9 percent to 29.9 percent. I just don't know anyone else who can do that.

Hey, listen ... you make exactly the point that the credit card companies keep trying to make: "Hey, ... we don't make anybody take the money." And they're right; they don't hold a gun to anybody's head when they borrowed that money. But they did the much, much slicker way, and that is, they just put it all into contract papers. They put it all in clauses that people can't read. They put it all in things like "universal default terms" and "15 days to change the terms of this contract" and arbitration agreements that [say] "We will hold the arbitrator to see if we have abided by the terms of the contract." ... They have teams of lawyers to figure out just the way to write the contracts that will maximize the profits for the credit card companies and minimize the likelihood that any customer will quite figure out what has happened when he or she uses that credit card.

10:46: We think Tom Carper is giving a statement. He represents Delaware, where most of these credit card companies live. He's going to ask the witnesses what they would do if they were credit card companies. This should be good.

10:50: Carper: Is it not unreasonable to raise rates when a customer's risk increases?

10:51: Oh, he's talking universal default, the most evil and hated practice where a credit card company boosts your rates because you didn't pay a late fee owed to the library. Real fair and equitable.

10:51: Holy shit, I can't believe this worked. Bonnie: "Credit card companies are businesses, they have obligations to their shareholders." Come on, Bonnie, realize you're getting played and hit back!

10:52: Bonnie walked into the trap, but at least she's arguing that she met all her debts and should not have been subject to a rate increase.

10:53: Levin comes back to argue that the increases are automated and unfair. "If it's a risk-based decision, isn't it weird that you were sent additional blank credit card checks in the mail?"

10:54: We like Levin's style. Rather than look over at Carper and say: "Dude, shut up," he's having every witness show that the rate increases had nothing to do with their risk profiles. Such a classy place, this Senate of ours.

10:57: Coleman's back with a hypothetical. He's asking if anybody would have a problem if they could no longer use their credit card and pay off the debt at the existing rate.

10:57: Nobody does.

10:58: Bonnie: "No, that's how a contract should work."

10:58: Carper is arguing that that current disclosure laws force banks to offer just that.

10:59: Bonnie: "No, they said I could not do that. Point-blank, 'No.'"

11:00: Carper: Did you look for new credit cards?

11:00: Witnesses are confused. Why would they look for new cards?

11:01: McCaskill wants to know if anybody was warned that using a credit card to pay off another card carries separate charges.

11:01: Nope, nobody knew.

11:01: The witnesses are dismissed.

11:02: *Cue ominous music, summon industry representatives*

11:04: The representatives have also been sworn in.

11:04: Here is Roger Hochschild, President and CEO of Discover.

11:04: He's going to talk about pricing policies.

11:04: Pricing is based on each customer's risk profile. "We make every effort to ensure that a customer can manage the credit we give them."

11:05: It's because credit cards are different than other loan products. Each transaction is a new loan, and they're responsible to make sure each loan is paid.

11:05: Now he's going to talk about all the background work they to do to set a base APR.

11:06: "We decline more applicants for credit than we approve." Really?

11:06: They don't solicit high-risk customers or offer them special products like balance transfers. They even reach out to people who seem like they might be in trouble before their accounts are delinquent. Wow, what a great company.

11:07: "The risk associated with some accounts rises over time." It's just like automobile insurance, see? If you get in an accident, your rate increases. Not crazy, just reasonable.

11:08: When they raise rates, they give customers the option of closing the account and paying off the debt at the current rate.

11:08: Their philosophy is to "Do The Right Thing." Just like Spike Lee.

11:09: Onto Bruce Hammonds of Bank of America, who sounds like he has the entrails of the poor caught in his throat.

11:09: "We constantly monitor our customer's behavior." And you folks worry about government.

11:10: 9%-10% of customers refuse higher rates, close their accounts, and pay off the debt at the old rate.

11:10: Risk-based pricing is good for consumers, says the largest bank in the country.

11:11: Ha! Customers who are re-priced often adopt better financial practices. Right, that's what happens, BoA. Don't feel free to provide data.

11:12: Bank of America is arguing that they are a friendly bank, even friendlier than Discover.

11:13: "Customers like our policies." "We listen to our customers. I personally have spent hundred of hours listening to our credit card customers."

11:13: "If any of us are wrong, the market will tell us." (By crashing.)

11:14: Onto Ryan Schneider of Capital One. Repricing is an "essential tool."

11:15: He just argued that credit cards are not like car insurance. Hear that, Mr. Hochschild?

11:15: "Capital One shares your concerns." Awww.

11:15: They have just one policy that governs repricing. See, just one policy, which means consumers are safe.

11:17: Consumers need to miss a payment by more than three days twice in a year before they are repriced. Capital One does not look at bounced checks or FICO score shifts. They also don't use universal default, which actually is a very good pro-consumer policy.

11:18: Levin's first question to Discover: What happened with Janet?

11:20: Roger doesn't want to talk about it, because it's personal. But he will, anyway.

11:20: They used a "holistic approach" to her account. He just called her a liar and said she missed payments.

11:21: Levin is asking about her payment history.

11:21: Roger agrees that she was repriced even though she made all her payments over the course of a year. She was charged no late fees.

11:22: Ah, Roger is complaining about one late payment from March 2004.

11:22: Other than that, she was on time. What a terrible customer.

11:24: Levin is asking why Discover won't agree to limit their use of universal default.

11:25: Roger: "Not using a cardholder's behavior on other accounts is like taking the battery out of the smoke detector."

11:26: Levin: "It's not important to Citibank? It's not important to Chase?"

11:27: Levin is lecturing BoA about the basics of fairness, calling them financial bullies. "Why should [your customer] be penalized because of some outside activity, which never happened—that she didn't know of—why if it's good enough for major companies like Chase and Citibank, why should you at Bank of America continue that practice?"

11:29: Bruce of BoA: Because their risk increases! "We have a responsibility to the safety and soundness of the institution."

11:29: He disagrees with McCaskill, credit isn't like the subprime sector—but would be if they lost the ability to reprice based on consumer risk. See what he did there, hijacking her argument?

11:31: Uh-oh, Bruce is angering Chairman Levin. In his testimony, Levin argues that BoA boosted Bonnie's rate because she was getting closer to her debt ceiling, even after they sent her checks that if used, would bring her closer to her debt ceiling. Bruce is hedging, saying it wasn't really the checks, it was other things, like um, you know, stuff. Levin does not seem convinced.

11:34: Senator Coleman wants to know if credit card companies can improve the way they give notice.

11:35: Regulation Z will already change the appearance of bills and rate change notices. Credit card companies supported the new regulations, in part, to escape from stricter action from Congress. That strategy might not work out.

11:37: Coleman: when you buy a car, you can compare to several others. Credit card companies are similarly different, with varying policies on rate increases, opt-out, etc. How can consumers judge the different policies?

11:38: Let's see how the companies cloak their notices as something other than legalese.

11:38: Capital One sees the onus on Regulation Z to make notices clear.

11:39: BoA agrees, but it's not easy because consumers want rewards and bonuses, and he doesn't know how to keep up. And if consumers dislike BoA, they can go to any other competitor.

11:39: Discover thinks it's great (not dangerous) that consumers have more than one card, because they can shift their business based on how companies satisfy their needs.

11:41: Discover: "Credit cards are excellent tools for the middle class."

11:43: McCaskill wants to know why it seems that the behavior the companies encourage is the behavior they use to indicate risk.

11:44: She wants to know how her mother (oh, it's personal) was charged $9 interest by a credit card company that owed over $200. How could she be charged interest by a company that owes her money?

11:45: Discover apparently has a guide to using credit wisely on the internet. McCaskill is not pleased with this answer.

11:46: She wants to know at what point they stop sending checks to people approaching their credit limit.

11:48: Nobody has an answer. It's based on risks, not the credit line. "If the risk is up, we stop sending checks."

11:48: McCaskill's mother was obviously a high-risk card-holder, with lots of cards, lots of debt, but she still gets checks.

11:49: All three state they don't use credit scores as the sole basis for raising any rate.

11:51: Good, McCaskill wants to see BoA's data that consumers pay more after their rates are raised. "That seems mighty counterintuitive."

11:51: The credit card representatives breathe a sigh of relief as they are embraced by the soft easy questions of Delaware Senator Tom Carper.

11:52: Now they get to talk about how much they care about consumers. They love us, they really do, and they constantly strive to keep us educated.

11:55: Carper: Do any regulators tell you how to manage risk?

11:55: Now everyone gets to point to Office of the Comptroller of the Currency as the source of meaningful federal regulation. Hmm, let's scroll through the archives to see how past editors might characterize those meaningful regulations:

The Currency Comptroller routinely goes double-dildo with national banks to undermine states' consumer protection laws.

11:57: Carper with a hardball: "What stops me from taking my business to another creditor? Because I get offers everyday."

11:58: Everybody: Nothing stops you!

11:58: This is what preachers know as "call and response."

12:01: Discover had no clue that they lowered a witness' rate. It certainly had nothing to do with the hearing. Know how? Because otherwise Discover's President would have known before this morning.

12:02: He does seem to know an awful lot about why her rate dropped, you know, for someone who didn't know her rate fell.

12:03: Contradiction alert: Roger just said that any factor in the risk model could affect her risk profile, and that a credit score, by itself, could affect her rate. Let's go back to 11:49:

All three state they don't use credit scores as the sole basis for raising any rate.

Can anyone reconcile the discrepancy in this sworn testimony? Bueller? Bueller?

12:07: Levin wants to know about opting out.

12:09: All agree that it requires a proactive notice from a consumer.

12:11: Levin wants to know why people shouldn't be able to opt-out at any point if they stop making payments and just put the card down.

12:12: His scenario: someone doesn't understand the opt-out notice and just says "the heck with this company," without making new purchases.

12:12: Discover: If they do not opt-out, right, they are charged the higher rate.

12:13: BoA: Yep.

12:13: Levin: "That strikes me as manifestly unfair."

12:14: Levin wants to know if Hammonds of BoA is troubled by Bonnie's rate increase from 8% to 23%.

12:16: Hammonds: Well, everyone used to pay 19%.

12:16: Levin: Did her story trouble you?

12:16: Hammonds: Sure, sure. But I do believe we made the right risk decision.

12:17: One of the highest indicators of risk is constantly making the minimum payments.

12:18: BoA discourages customers from making minimum payments. Behind the scenes, not say, by printing any warnings on the bill.

12:22: Levin is bringing the hearing to an end, but is reminding consumers that credit card companies do not treat their customers fairly. Several pieces of legislation are in the pot, and Levin will make sure the issue stays on the Senate agenda.

12:30: If you want to learn more about the inner workings of credit cards, we highly recommend that you watch Frontline's documentary on abusive credit card practices. We also caution everyone as we roll into the holiday season, please use your credit card responsibly. Don't take on debt you can't afford, and don't ever let anything stop your from paying off your credit card in full every single month.

• Establishing a national licensing and registration system for mortgage lenders;
• Establishing the Office of Housing Counseling within HUD to help borrowers avoid foreclosure;
• Banning loans that a borrower cannot reasonably repay;
• Banning lenders from steering borrowers towards loans with predatory characteristics;
• Making banks that securitize mortgages liable for violating lending laws.

The mortgage lobby spent several weeks trying to derail the bill as it percolated in Committee. Even some consumer advocates oppose the bill in its current form because it preempts strong consumer protections from the states with a uniform federal standard.

The mortgage lobby has already shifted its focus towards killing companion legislation stalled in the Senate. Senate Banking Chairman Chris Dodd (D-CT) has released only a vague sketch of his chamber's response to the subprime meltdown, saying that his legislation will meet two requirements:

[First], it must establish strong standards against abusive practices such as prepayment penalties, steering, and other problems. Second, it must provide for strong enforcement to ensure that those standards are met. My bill...will meet both requirements and help protect homeowners from predatory lending.

The White House has issued a Statement of Administrative Policy objecting to several provisions of the House bill, but has restrained itself from issuing a veto threat.

House Votes to Rein in Certain Mortgage Lending Practices [AP]
H.R. 3915 - Mortgage Reform and Anti-Predatory Lending Act of 2007 [THOMAS]
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(AP Photo/Kim Johnson Flodin)

"It is my and the CPSC staff's assessment that many of our existing public safety activities would have to be severely curtailed or would cease entirely in order to attempt to fulfill all of the bill's proposed statutory directives," acting chairman Nancy Nord wrote Wednesday in a letter to Senate Commerce Committee Chairman Daniel K. Inouye (D-Hawaii).

Heaven forbid the CPSC have to deal with our tipline.

Product Safety Chief Sees Setbacks in Senate Bill [Washington Post]
(Photo:AP)

Today's hearing will feature just one panel. Labor activists from the National Labor Committee and the International Labor Rights Forum will appear beside a past president of the Toy Industry Association - formerly called the Toy Manufacturers Association, before the widespread use of Chinese sweatshops.

Storytime kicks off at 9:30 a.m., complete with heart-wrenching testimonials, pictures of sweatshops, and maybe even a surprise appearance from Senator Stevens. Cookies and apple juice, optional.
(AP Photo/Lee Celano)

09:30: The Committee has provided 20 kpbs of video link goodness.
09:40: Subcommittee Chairman Dorgan will be leading the hearing; we always enjoy the when Chairman takes the reigns and doesn't punt to a junior Senator.
09:41: 80% of our toys are manufactured in China.

09:42: Dorgan has introduced S. 367, the Decent Working Conditions and Fair Competition Act.

09:43: The Senator wants a conversation about whether we want to be the sort of country that accepts products made in sweatshops.

09:44: We know sweatshops exist, but the Senate wants to know if they are proliferating, expanding - or if moral concerns are constraining their use.

09:45: For a quick primer on the issue, the Salt Lake Tribune has an excellent article:

The Chinese Ministry of Health in 2005 noted at least 200 million of China's labor force of 700 million workers were routinely exposed to toxic chemicals and life-threatening diseases in factories. "More than 16 million enterprises in China have been subjecting workers to high, poisonous levels of toxic chemicals," the ministry said at a conference on occupational diseases in Beijing, which was reported by the state-controlled media. The ministry particularly blamed "foreign-funded" enterprises that exported goods.

China has more deaths per capita from work-related illnesses each year than any other country, according to the ILO. In 2005, the most recent year for which data are available, 386,645 Chinese workers died of occupational illnesses, according to Chinese government data compiled by the ILO and cited in the July 14, 2006, Journal of Epidemiology. Millions more live with fatal diseases caused by factory work, other epidemiologists estimated in the article.

09:47: Kernaghan claims that the average workweek is 87 hours, from 7:30 a.m. to 10 p.m.

09:48: Workers are required to stand as they are yelled at by supervisors, and if anyone speaks back they are immediately fired.

09:48: The standard salary is $0.53 per hour - overtime pay is regularly confiscated.

09:50: He's holding up a Barbie, claiming: "It doesn't have to be this way."

09:51: All of these conditions violate Chinese law, but local officials refuse to provide enforcement.

09:52: Some factories don't even bother hiring "permanent" workers, instead opting for a revolving door of temporary workers.

09:53: The toy industry claims that it needs no regulation - if the Chinese laws aren't being followed, then Kernaghan believes U.S. law, such as the one Senator Dorgan can force change.

09:54: Onto Harry Wu of the Laogai Research Foundation. The Laogai is the vast labor reform system that forces political prisoners and criminals to repent through hard labor.

09:56: China has claimed that they use a prison system just like we do, not the Laogai. The Laogai is one of the human rights concerns that Congress wanted addressed before granting China MFN (Most Favored Nation) trading status.

09:58: Many labor camps no longer work in agriculture, but manufacturing - toys, gadgets, clothes - everything.

09:59: Wu is holding up the Salt Lake Tribune article we linked to earlier.

10:00: China has one union that nobody accepts as legitimate - except Walmart, which refuses to acknowledge unions here.

10:02: Onto Bama Anthreya of the International Labor Rights Forum.

10:03: Few Chinese workers wear any sort of protective garb. There are 8,000 factories employing 3 million workers.

10:03: Mattel, Hasbro, Fischer-Price and Disney all use sweatshops, but the biggest beneficiary is Walmart.

10:04: If a worker is harmed during working hours, that's his/her problem, even after a supervisor verifies that the problem was the factory's fault.

10:05: A worker is required to work for 12 hours - but they really work for 17 hours - and if a worker misses a single shift, that's it, fired. So if a worker is maimed on the job and seeks medical attention, their job is gone, and they also waive any right to litigation.

10:06: When Lee Dur shut down because of Mattel's lead paint issues, all workers were laid off. Not a single one knew a thing about lead poisoning, or that they might have been exposed to lead. Quick, send a team of lawyers over there to advertise on their subways.

10:08: All of the companies manufacturing in China have excellent data on the Chinese labor markets. They know all about unemployment, but more importantly, they know exactly how many Chinese inspectors there are. They chose China as a destination not just because it's cheap - but specifically because there is an absence of enforcement and worker protections. That's pretty damn harsh - she's essentially calling Walmart and Mattel heartless killers.

10:11: Legal protection is urgently needed, not just from the Chinese, but from the U.S. - voluntary protections are routinely ignored.

10:11: Senator Sanders (I-VT) is here, ready to throw some socialist fire. But only after Peter Eio of the Toy Industry speaks.

10:12: Mattel was invited, but for some reason, chose not to attend. Maybe all the Barbies were having a tea party.

10:13: Eio has this wonderful English/Scottish accent, and nine chins.

10:14: He's talking up some industry association we've never heard of that vouches for the safety of toy manufacturing around the world.

10:14: Apparently, it was founded by important people - a Prime Minister, a Chamber of Commerce rep, which confers credibility on the organization.

10:15: 670 of the 8,000 factories are certified as not sweatshop death-traps. 290 toy brands representing 75% of global toy products that will require certification by 2009. Walmart, Target, Sears, K-Mart, etc, are apparently part of this group.

10:17: This sounds like a lot of talk, many meetings, but little action.

10:18: Balsy one, this Eio - he wants Congress to fund his certification effort.

10:19: Question time. Mr. Wu believes that American toys are made in Chinese prisons, an assertion backed, apparently, by evidence.

10:20: Dorgan is asking the panelists how they know their information is accurate.

10:21: Wow, Chinese prisoners are affixing labels that read "Made in America."

10:22: Kernaghan says documents are continually smuggled out of factories, but can't openly disclose sources because they'll be dismissed/shot/assigned to make Made in America toys in Chinese prisons.

10:23: Most U.S. companies have no knowledge of the manufacturing conditions in China. Mattel admitted during the toy recalls that they had no clue where many of their toys were made because contracts were recursively farmed out.

10:25: Subcontractors teach workers on their first day how to lie to Mattel auditors - but even Mattel's own audits show that some factories have an 80 hour workweek, mold on walls, etc.

10:26: Kernaghan is harping on Mattel's apology to China. Mattel was given waivers by the government in 2005 to pay workers less than legally required for overtime.

10:27: Bama Anthreya has personally toured these factories in South China to see for herself how inspections and audits are conducted.

10:29: Dorgan is asking Eio if the horror stories from the other panelists is possible, especially since his group covers only a fraction of Chinese factories.

10:30: The short answer: Yes, the testimony is accurate.

10:31: Dorgan sees three issues: 1) American workers have lost their jobs; 2) The products made are unsafe for American consumers; 3) We should not accept products made with forced or sweatshop labor.

10:32: Sanders (I-VT) is railing against "unfettered free trade agreements foisted upon us by multinationals."

10:33: "What you are telling us is that the time is long overdue for this Congress to reconsider t