National Partnership for Women and Families

June 15, 2007
Washington, D.C.

Thank you very much. You know, I was backstage looking at Debra giving her speech on the television screen. I was so caught up in it, and she said she was going to start to tell a story. She was about three minutes into the story, and I thought, my God, she’s talking about my mother. I didn’t know in the beginning. So thank you very much, Debra, Cheryl Mills, Ellen Malcolm, Judy Lichtmann, Lew Kaden, and all of the supporters of this great organization.

I was actually here 11 years ago in 1996, which seems almost like ancient history now. And the Family Medical Leave Act, as Debra said, was signed in 1993. By the time I had left office, we already had 35 million Americans claim the benefits of it. After I left office, for the first four years, it was the single thing most mentioned to me by Americans just coming up to me on the street.

I was on an airplane once from New York to Washington, and the flight attendant came up to me and said, “A couple of years ago, both my parents were desperately ill, one with Alzheimer’s and one with cancer. They have two children, my sister and I. We both work. If it hadn’t been for the Family Medical Leave Act, we wouldn’t have been able to care for them in their last days.” She smiled and said, “You know, that other party, they always talk about family values, but I think how your parents die is a big part of family values.” I couldn’t even breathe. I heard stories like this all the time.

Near the end of my second term, we tried to at least give the states a mechanism within which they could promote paid leave financed out of surpluses in unemployment insurance collections, and a lot of them have it. I’m sad to say that as soon as I left office, the federal government took away that option from the state for reasons I could never understand, since the states could not put the unemployment insurance fund under water in order to finance paid leave.

It shows you the difference in views that exist still in our country about whether it’s good economics and good social policy to allow people to succeed at home and at work. I personally believe the tensions that people have in succeeding at home and at work and the growing inequality in our society are directly and indirectly responsible for one of the biggest health problems we have today, and one which I work on now as a private citizen: the rising tide of childhood obesity and its attendant consequences, including, for the first time in history, statistically significant numbers of young people who have what we used to call adult-onset diabetes, type 2 diabetes. Last year in Harlem, where my office is, we had a nine-year-old child diagnosed with type 2 diabetes.

Even in the 1990s, diabetes and its attendant consequences accounted for an enormous percentage of the increase in health care costs. And it literally threatens not only to overwhelm the health care system, but to give us the first generation of children who have shorter lifespans than their parents. A recent study predicted that as many as one in three children born in this decade will develop diabetes at some point in their lives.

This is a global problem. The United Kingdom and Ireland both have national campaigns against childhood obesity. It’s becoming an enormous problem in India because of their growing prosperity. They are chucking what I think is the most interesting diet in the world in favor of American fast foods with attendant and predictable consequences.

I say all of that to emphasize the importance of what you are here to support. We are living in a globalized economy that has a lot of benefits for a lot of us; otherwise, you couldn’t afford to be here today. That is why you’re here. But we all know that there are limitations on what the market will produce and that there are vast inequities in the world and in our own country which have created adverse consequences for our children and for our families.

The world we live in has been very good for me and, as I said, for most of you, but it is unequal, insecure, and unsustainable. And in seeking to deal with the inequity, the insecurity, and the unsustainability of it, we can lift our children and our families to the point where we ought to all be as a society. I want to say just a little bit about that.

First, let’s look at what has happened to America in this decade. We are now in our sixth year of economic growth. We have an all-time high in the stock market. We have a 40-year high in corporate profits. We have had six years of increasing productivity in the workplace, which means men and women are doing a better job. They are producing more in the same amount of time.

During that period, average wages have shown pretty good growth, but not quite as much as the economy. But median wages, the ones in the middle, have been totally stagnant. Indeed, in the last three years, they have declined by two percent against inflation so that we have this unbelievable situation: a four percent increase in the number of people working full-time falling below the poverty line while working and a four percent increase in the number of workers and their families who have lost their health insurance while working. Meanwhile, health insurance premiums have gone up 80 percent, 6.5 times as much as average wages, while median wages have remained flat.

Now, there are lots of explanations for why that happened. Part of it is the climate of the global economy. Part of it is the fact that we haven’t found this generation’s source of new good-paying jobs, which is necessary in an open, rich economy if you want to maintain and expand the middle class. Part of it is government policies, which have not favored the kinds of things that will tend to create the middle class and reduce inequality and help people move out of poverty.

Unbelievably, it looks like we’re finally about to raise the minimum wage after 10 years. But we have not increased the Earned Income Tax Credit. We have had consistent enforcement policies at the IRS, which investigates more people and devotes more resources to investigating people for defrauding the government on the Earned Income Tax Credit than it does upper-income people like me on defrauding the government on phony tax shelters. That is a real problem. Corporate conduct and the pressures that we as stockholders put on corporations is also a part of the problem. In the five previous economic recoveries, 76 percent of net increase in corporate revenues has gone to compensation and benefits, 25 percent to profits. In this recovery, 41 percent went to compensation and benefits and 59 percent to profits. That also explains part of the problem that our people face.

So what do we do about it? Well, some of the things that need to be done are not within the direct purview of this group, but I want to mention one. You cannot strengthen the middle class in an open, competitive global economy unless the wealthy countries each find a source of new good-paying jobs every five to eight years.

In my second term, for the first time in two decades, we had a rise in median wages and a decline in inequality for the whole second term, not only because we had good policies—I think we did— but because we had new good jobs created as information technology broke out of Silicon Valley and the video game companies in Texas and spread into every aspect of American life. They were eight percent of our employment, 28 percent of our job growth, and over 30 percent of our wage growth. So it changed the whole structure of opportunity in America.

That has not happened in this decade because we, almost alone among advance countries, have steadfastly refused to get serious about a clean, independent energy future. If we do that, we’ll create millions of jobs, we’ll tighten the job market, and we’ll raise the structure of wages.

If you just look at New York, where I work now, the Mayor has proposed an ambitious plan for reducing greenhouse gas emissions in New York, even though we are already more than half as efficient as the average American, mostly because the people who live there are all packed together.

In America, about a third of our emissions come from transportation, a third from manufacturing and electricity generation, and a third from buildings of all kinds. In New York, where there is not much manufacturing anymore, it’s 20 percent from transportation and 80 percent from the buildings and the power needed to heat, cool, and light them.

All of the publicity, for those of you who come from New York, is coming from the Mayor’s proposal for a congestion fee so that we have to pay $8 per car per day if we go into midtown Manhattan. There are a lot of concerns about it. It’s slightly regressive for lower-income working people who have no option but to drive. On the other hand, if you’ve ever waited an hour in New York City traffic, you would pay $80 dollars just to be able to go another block or two.

But 80 percent of the problem is within buildings. Just think of how many jobs would be created. There are 950,000 buildings in the city. Let’s just assume 50,000 are maximally efficient and 50,000 are unfixable. Suppose we said within the next three to four years, we’re going to green 850,000 buildings in that small piece of land. How many jobs would be created putting in all the lights, fixing the insulation, putting in new windows, and greening all the roofs? How many manufacturing jobs would be created doing that? How many new small businesses could we create? And these jobs could not be easily outsourced. You’ve got to be on the roof to green it; you can’t be in India.

As I said, this is not within the direct purview of what you are concerned about as an organization, but it relates to the success of the other policies. If we created more jobs, I think we should also look at increasing the wages and the benefits of jobs which cannot be outsourced.

I think it would be a good thing if there were more unionization among public employee workers, hotel and restaurant workers, and among all the service jobs that cannot be outsourced. Many of us who access those jobs are above average income. I think about it every time I give a speech to a charity banquet in New York City. I think about how wealthy those of us are who are there participating in the charity, and I wonder how much money do people make who have to clean up after we leave and who serve and prepare the food while we’re there. So that’s a strategy that we ought to embrace.

And then we need to, finally, get back on this paid leave issue. I think there’s more support for it than ever before, and there’s lots of evidence that it increases productivity. Any time you can create an environment where people at work are not worried sick about their parents or their kids, they’re going to do better at work.

And I was laughing backstage when Debra was making the pitch here and talking about the card. You know, Nicolas Sarkozy just got elected as President of France on what passed for, in France, a conservative platform. Conservative in France means “I think you should work 40 instead of 35 hours a week.” Conservative in France means that if I have to lay you off, I don’t think I should have to give you full salary for two whole years. Maybe a year would do. We’re laughing, but we are way out of step here, and it’s painful when we’re not creating more jobs because the people who have their jobs have downward pressure on their wages and their benefits anyway.

So this is really, really important, and I hope you will continue to support that. There’s no question that many, many states have the resources out of which paid leave plans could be financed, and you could start modestly in the most critical areas. But I think it’s really important.

The second thing I’d like to say is that I’m glad you have embraced this health care cause, because health care is at the core of not only our attempts to achieve social justice and help people succeed at home and at work, but also in the future of our economic competitiveness.

In addition to all those other rather dismal economic statistics I gave you for people whose median incomes have not increased, over half of all the personal bankruptcies filed in America in this decade were filed because of a health care emergency. We now spend 60 percent of our income on health care. No other country spends more than 11 besides Switzerland, which spends 12 percent because 17.5 percent of their people are over 65. Only 11.5 percent of our population is over 65. That drives costs up.

But if you just take Switzerland, the difference between them and us is $500 billion. All other wealthy countries in the world spend between 9.5 percent and 11 percent. The difference in 11 and 16 is $700 billion. We insure 84 percent; they all insure 100. You might say, “Well, surely we’re getting better health care since fewer of us get it and we’re paying more for it.” Our overall health rating is 37th in the world and our life expectancy is about 34th. On the other hand, in America, if you live to be 65, you enter a group of people with the highest life expectancy in the world. Why? Because we have universal health care with low overhead costs and high quality.

We have to address this. Yes, there’s a moral imperative for universal coverage, but there’s also an economic imperative for reining in the cost. Otherwise we won’t be able to afford universal coverage because our economy will continue to sink vis-à-vis others.

And finally, there’s an imperative to do more to keep people well in addition to treating them when they’re sick. I’m exhibit A of the best things about America’s medical system; otherwise I wouldn’t be here. You’d be asking my daughter to come up here and receive the award for me posthumously if it weren’t for what’s good about American health care.

But we do not do a very good job of keeping people well in the first place. I will say again, that’s one of the reasons that I think all Americans should support this campaign to make our children healthier. If we keep having these rising rates of obesity, you could make me dictator for a day, I could design a great health care system, and it would go broke within a decade because we’re not keeping people well.

This is a big payoff, too. Safeway last year started covering primary and preventive services for all its employees, and it’s the first year in I don’t know how long where they had no increase in their premiums in spite of the fact that health care costs are exploding in America.

Where does all this money go? Well, McKinsey & Company put out a long study trying to analyze where the money goes, and I actually read it all. I recommend it to you if you’re interested in this. They’re very conservative in the savings that would be achieved. A lot of other people believe there’s more money in the system, but they bent over backwards to make every allowance possible for the existing system, and they say the following: about $100 billion is wasted compared to what any other country spends in administrative cost by the insurers alone in marketing, promotion, all that. If you look at private insurance administrative costs compared to Medicare and Medicaid and the veteran’s hospitals, you’ll see that.

Secondly, they say there’s about another $100 billion, conservatively, in administrative costs that no other country pays. That’s what the health care providers and employers have to undertake to negotiate with the insurance companies. I just had an experience with this. Hillary’s brother had the same heart surgery I did, and his wife works for a big hospital with a very good health care package for the family through her employment. So they got a letter saying, well, maybe they’re not going to pay because they think he had a preexisting condition. Now, they know he didn’t have a preexisting condition. That’s not what this is about. This is about sending him a letter, telling him he’s got to come up with more documentation, and then he has to go back to the health care providers and back to his previous doctors and get them to do all kinds of stuff, and then they’ll fight about it for about four months, and then the insurance company will cut a check and pay them. In the meanwhile, they will earn the interest on that money that they would have paid. And it doesn’t cost them very much to send one letter and receive a few angry phone calls and e-mails and reply to them.

So in this phase, the administrative costs for the providers will be more than for the insurers. You can make a decision to do this if you want, but the American people are paying two million people to get up and go to work every day and play tug of war over health care money. Nobody else in the world would do this, but we do. It doesn’t make anybody well, it doesn’t keep anybody from getting sick, and it doesn’t improve the quality of health care. It does nothing except create friction so that more money can be earned by insurance companies by insuring people in smaller pools. It’s not even so good for them anymore. But it’s an enormous waste.

I found this hard to believe because I have to take so much medicine, but according to McKinsey, Americans on average consume 20 percent fewer prescription drugs than people in other wealthy countries, but we pay $66 billion more than we would if we were under any other system in the world, including all the other countries that have very successful pharmaceutical industries.

Then they said we pay something on the order of $300 billion more than we would in any other country for hospital and clinical care, partly because about 70 percent of all costs are incurred by the hospital bills of five percent of people who get really sick, and we don’t manage these cases very well. We have unnecessary procedures, we have overlap, and we don’t keep up with it as we should.

Hillary was out in Minnesota the other day at a clinic that is not directly affiliated but works on the Mayo Clinic model, and one of the doctors said, you know, if everybody delivered and managed health care cases the way the Mayo Clinic does, we’d cut 20 to 25 percent of the cost out of the American health care system.

There is a health care provider in eastern Pennsylvania now that will give you a warranty with any surgery. You get a 90-day warranty. Now, if you don’t survive, it’s not worth much. But if you survive and there are complications, it means you get to go back again and again, and they can’t charge you any more money. As a result, all the physicians in this group have developed protocols and checklists that they have all agreed to follow. Guess what? The error rate’s gone down, the return rate’s gone down, and the cost of health care has gone down. So managing the system better would save a lot of money. In other words, there are hundreds of billions of dollars that we could get out of this system.

The people who are talking seriously about savings through prevention and better management of the system are not just looking for a way to avoid saying we have to raise taxes to cover everyone. We may have to put more public money in to get universal coverage because most of the savings in the system would accrue to health care providers on the administrative side and to employers and employees in their premium payments.

So most of the savings from all these cost reductions would be spread broadly across society and the tax dollars that would be saved would be primarily among people who are government-insured, who get the benefit of preventive health care and managing the chronic cases better. And there probably won’t be enough of that in the short run to insure everyone without some greater infusion of public money.

But I say this just to emphasize that there is a reason that an unbelievable event occurred here just a few weeks ago where a group— one of the endless group press conferences that occur in Washington— stood and said, “Here are our principles for universal coverage and a health care system America can afford. Here they are; we all agree.” What was amazing was the group included AT&T and its union, the Communication Workers; Intel, the big high-tech company; Kelly Services, the part-time employment provider; Wal-Mart, the biggest non-union company in America; and the SEIU, the most liberal public employee union in America. Go figure. They were all there. Why? Because they know we’re under a moral imperative to cover everybody and we’re under an economic imperative to make our costs more competitive. And we won’t be the country we want to be and our children and families won’t be stable unless we do a better job of promoting wellness.

I urge you to stay at this. I have the feeling now that people have a sufficient understanding of this problem that sometime in the next couple of years, we might actually get a significant comprehensive health care reform package passed in the United States if you stay at it.

Let me just mention one other issue that I think is quite important, along with the need for better support for child care and for paid leave and for the other obvious things that I tried to support when I was President. Since I left office, I spent a lot of time trying to help families just maximize the income that they have or can get. My Foundation runs a big program every year with Acorn and others to try to make sure everybody who’s qualified claims the Earned Income Tax Credit. It’s about a $4 billion income infusion to lower-income working people, mostly with children; single people with modest incomes get a little money, but it mostly is designed to lift families. And most of its beneficiaries are working women and their children.

When I was President, just the doubling of the Earned Income Tax Credit took over 2 million children out of poverty. But still, it’s shocking how many people don’t apply for it. About 20 to 25 percent of the people in every state in America who are eligible do not apply. And frankly, it’s too hard to get. All I have to do is pay an accountant to turn in my tax returns and claim whatever it is I’m entitled to claim, the charitable contributions and stuff. You have to fill out a separate form to get the Earned Income Tax Credit. It’s a nightmare.

So people like us have to help them. The one thing I would say is that we need to simplify and make more user-friendly the Earned Income Tax Credit or, as Rahm Emanuel and others have suggested, maybe we ought to consolidate it with all the other family tax credits, make them all refundable, and put them on the IRS short form so that you don’t need the help of an accountant to get it. It’s a really big issue.

The other big issue that I’m working on now with my Foundation that you could help on is making financial services available to people at lower income levels. There are 28 million people today who get a regular check who are not in the banking system. Let me say that again: 28 million people in America today get a regular check and have no bank account, which means they can’t establish a credit rating. They can’t qualify for a home mortgage, and they’re paying out the ears in interest and fee costs to borrow money.

There are more payday loan shops in the United States today than McDonald’s franchises. I always get a strong response when I say that, because you and I don’t have to live in that world. The average person who uses one of these things usually doesn’t pay it back on time. They’re charged maximum interest rates and there are all these fees. By the time they get done paying, they average paying back $792 on a $325 loan.

More than a billion dollars in tax refund money is lost every year by people taking what are called refund anticipation loans. If you’re short of cash and you know you’re going to qualify, let’s say, for the Earned Income Tax Credit, you can go in and borrow money against the tax refund, normally a week or two before you get it. But there is an enormous payment: the fees and interest rates can run from net 40 to 500 percent.

In addition to that, the other major source of this economic recovery, besides people maxing out on their credit cards and doing things like refund anticipation loans, is second mortgages on homes. In the first five years of this decade, homeowners cashed out $715 billion worth of home equity. In 1973, homeowners actually owned 68 percent of their homes. Today, they own 55 percent of their homes. So we have more homeowners, but they own less of the home they’re in. We’ve got to bring more people into the financial mainstream. If you want to do something for women and children, get working mothers into the financial mainstream.

When I was President, we instituted a vigorous enforcement of the Community Reinvestment Act, a little known law passed when President Carter was in office that requires banks to loan money and invest money in the communities in which they’re located. You can’t take deposits without making investments. Eight hundred billion dollars in investments were made in those eight years under the Community Reinvestment Act, over 90 percent of all the money that had ever been invested under that law, just because we enforced it. But that doesn’t get people in the banking system in the first place.

We need both the help of the government and employers and nongovernmental groups with financial education, as well as lobbying banks, to participate. IBM, for example, recently made a multimillion dollar commitment to do financial education and one-on-one counseling to all their employees. It’s hard for you to believe, but there are people working for IBM who don’t have bank accounts. We need to make sure that the banks bend over backwards to serve people.

We just had a bank open in Queens. I think it’s called Amalgamated, but they opened banking branches in small businesses that had gone vacant. There was a fabulous story in the New York Times about these people who had their first bank accounts, and one woman said it was so great because she’d been stashing cash in her house for so long, she couldn’t remember where she put all her money. She had to go find $50 here and $100 there and she still wasn’t sure she’d found it all, but she did have a bank account. And she loved having an ATM card; it made her feel really important.

Another woman said that her 10 year-old son had done all kinds of odd jobs ever since he was eight and had actually saved over $100. He got to open his own bank account, and he couldn’t believe there was such a thing as interest. It was a real hoot for him to know that he was earning money without doing anything for a change.

Now, I want to say again, I’m not talking about a few people. We’re talking about 28 million people who don’t have bank accounts. They spend $10 billion a year on alternative financial transactions. The average person making, say, $21,000 a year loses almost $1,000 a year in these transactions. You just think what that would do in child care costs, after-school programs, you name it. So I ask you to do what you can to support that. I will continue to do what I can, but I can think of two or three little things that can be done in federal law that would make it a lot easier for us to bank those 28 million people. It would be immensely helpful.

Finally, let me say that the most important thing I came here to do was to thank you. It took nine years to pass the Family and Medical Leave Act and get a President who would sign it. It passed once before. It’s frustrating that it takes so long to do what to us seems self-evidently right, practical, and beneficial to the larger society. But all the things we talked about today are simply specific examples of the general question confronting the whole world today, which is are we going to go forward together or basically use all these forces of modern technology to allow ourselves to be balkanized and more divided? Will we do better if we go forward together or will we do better if we stay with winner-take-all? Is what we have in common more important, or are our interesting differences more important?

Every single question in the world today can basically be boiled down to that. And it’s not just economics. I mean, what is the big story in the Middle East today? Hamas has defeated Fatah in Gaza and taken over their security headquarters and killed 90 more people. I’ve actually been in the headquarters. I’m not demeaning the Palestinians by saying this, but I have several Palestinian friends in America and around the world. I do not know any Palestinian outside the territories who is not a college professor or a millionaire. The only poor Palestinians in the world are the people stuck in a place where their representatives first wanted to fight Israel instead of taking an honorable peace deal that I offered, and, second, decided fighting each other was an even higher priority, grinding people down because their differences were more important than what they had in common.

Based on my personal experience, I would say that if the Palestinians and the Israelis ever made peace, they’re both so brilliant with entrepreneurial skills that within a decade, the whole locus of economic power in the Middle East would shift from the oil kingdoms to Israel and Palestine. They would be the magnet upon which everything else would rise. Failing that, it’s the little Gulf States— Dubai, Abu Dhabi, Qatar, all those people— who are bringing in Western universities and capital and trying to build a cooperative future.

The same thing is true here. The people who are against paid leave, the people who are against banking everybody, the people who are against comprehensive health care reform, they all think that they would be better individually if we didn’t do this. But the truth is, over the long run, nobody is better individually unless we’re all getting better together. That’s the principal argument why all men should support equal pay for women. That’s the principal argument why I hope every Republican will soon recant and support restoring all those cuts in the after-school programs for children. Everybody’s kids are better off if all kids are learning.

That is the central question of the 21st century. There’s never been a time with so much knowledge and so many opportunities. For all the perils of weapons of mass destruction and terror, I really think it’s unlikely that the 21st century will claim as many innocent lives to terror or to politics as the 20th century did. Don’t forget, we had two World Wars, three purges in the Soviet Union, the Holocaust, the Chinese Cultural Revolution, the Khmer Rouge in Cambodia, and countless wars in Africa. We’re going to have really go far to kill as many people in this century as we killed in the last century.

And I say that not because you shouldn’t be concerned about security, but this is an interdependent world. We can’t kill, jail, or occupy everybody who’s against us. We have to make a world with more partners and fewer enemies. In order to have the support in America for building that kind of world, we have to keep getting better at home. We cannot stay in the Dark Ages when it comes to support for families. The core of the vaunted American middle class dream, which began to become reality with all of its inequities after World War II, in the 21st century will be the ability of every man and woman to succeed in childrearing and work. The rest of us should be willing to pay a little more so that everybody can do that.

In the end, the country will grow wealthier. In the end, the society will grow richer. In the end, we will all do better if we decide that everybody ought to have what we want for our children because what we have in common is more important than our differences. Tomorrow, when you pick up the paper and you read about any problem in the world, ask yourself if that is not at the root of it. And then when you come back to health care, to lending practices, to paid leave, to any issue in America, ask yourself again if this is not at the root of our inability to find a common solution. I am immensely optimistic about the future if we can just answer this one question right.

Thank you and God bless you.