Richard Kirsch

Roosevelt Institute Senior Fellow

Recent Posts by Richard Kirsch

  • Obama Administration Defends Amazon’s Low Pay – Again

    Oct 9, 2014Richard Kirsch

    It's hard for workers to trust the President's support for policies that help them when the administration sides with Amazon at the Supreme Court.

    Amazon’s business model is based on quick easy buying and low prices. One way it does that is to force its warehouse workers to wait a long time to leave work, without getting paid. And that’s just fine with the Obama administration, which continues to have a blind spot when it comes to decent pay and working conditions at Amazon.

    It's hard for workers to trust the President's support for policies that help them when the administration sides with Amazon at the Supreme Court.

    Amazon’s business model is based on quick easy buying and low prices. One way it does that is to force its warehouse workers to wait a long time to leave work, without getting paid. And that’s just fine with the Obama administration, which continues to have a blind spot when it comes to decent pay and working conditions at Amazon.

    Yesterday the Supreme Court heard a case (Integrity Staffing Solutions v. Busk) in which workers are suing the temp firm that staff’s Amazon warehouses. The workers are in court because they don’t get paid for the time they are forced to stand on line for a security check when they leave work to be sure they haven’t stolen anything. The security screening itself reveals the poor working conditions and lack of respect that Amazon has for its workers. Workers who are well paid and have job security will not take the risk of stealing. The lack of pay adds costly insult to their injury.

    The legal issues revolve around whether the security screenings, which can take 20 minutes or more, are “integral and indispensable” to the job, which would trigger pay under the Fair Labor Standards Act. Amazon certainly thinks so; the screenings aren’t optional. Still the firm, which pays warehouse workers around $11 or $12 an hour, cheaps out by denying the workers pay when they are waiting on line to leave.

    As Jesse Busk, the lead plaintiff in the case, told The Huffington Post, "You're just standing there, and everyone wants to get home. It was not comfortable. There could be hundreds of people waiting at the end of the shift."

    While President Obama has made numerous passionate speeches about giving Americans a raise, his administration is taking Amazon’s side at the Supreme Court, filing an amicus brief, alongside the U.S. Chamber of Commerce and other business lobbies.

    Unfortunately, there’s nothing new about this from the administration. Last August, as I wrote at the time, “President Obama gave a great speech on why good jobs are the foundation for his middle-out economic strategy... from a huge Amazon warehouse where the workers do not have good jobs.”

    The President told the Amazon warehouse workers who were in the audience, “we should be doing everything we can as a country to create more good jobs that pay good wages.”

    Everything, it turns out, except being sure they get paid for all the time they are required to be at work.

    The Obama administration may wonder why the President does not get more credit for the economic progress the nation has made coming out of the Great Recession or more recognition for his calls for raising the minimum wage. The core reason is that for too many Americans too low wages, too few hours at work, and job insecurity or no job at all remain their reality.

    The President’s defense of Amazon reveals another reason. Americans see that he is unwilling to take on the powerful forces that are driving down the living standards and hopes of American workers. They see his embrace of Amazon and Wal-Mart, where he gave a speech on energy earlier this year. And too many come to the conclusion that it is only campaign contributors that matter, despairing of finding leaders who understand what really is going on in their lives – and who are willing to take their side against the powerful.

    Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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  • Port Drivers Take on Low Wages in an Industry Built on a Lie

    Jul 14, 2014Richard Kirsch

    Port truck drivers aren't indepedent contractors: they're employees of companies that pay them too little for long hours, with no benefits or worker protections.

    It’s a David and Goliath story, only in this case there are 120 Davids taking on a hidden Goliath of an industry that every day touches everyone who is reading this in hundreds of ways. The port trucking industry is built on an illegal fiction, designed to rip off the 120 drivers who went on strike at the ports of Los Angeles and Long Beach this week.

    Port truck drivers aren't indepedent contractors: they're employees of companies that pay them too little for long hours, with no benefits or worker protections.

    It’s a David and Goliath story, only in this case there are 120 Davids taking on a hidden Goliath of an industry that every day touches everyone who is reading this in hundreds of ways. The port trucking industry is built on an illegal fiction, designed to rip off the 120 drivers who went on strike at the ports of Los Angeles and Long Beach this week.

    They are not alone; 49,000 port truck drivers around the country work long hours at low pay with no benefits or basic worker protections like unemployment insurance or workers compensation, because the industry misclassifies them as independent contractors. The drivers’ courageous action is one more facet of a surging labor and community movement, which is starting to take on the captains of America’s low-wage economy.

    Virtually everything you are wearing now that was made overseas came through our nation’s ports. So did every imported item in your office or home. Port truck drivers transported those goods from ship terminals to rail yards and warehouse centers, for distribution to stores around the country. Starting more than 30 years ago, when the trucking industry was deregulated during the Carter administration, the industry was taken over by firms with a business model based on driving down drivers’ incomes by treating them as independent contractors instead of employees.

    The new model was based on a lie. The drivers weren’t really independent truck drivers, with their own rigs. They still worked for one distribution company, which totally controlled everything about their work – their hours, their shipments, the rates they were paid. The company supplied the trucks they drove. But by insisting the drivers accept the new arrangement if they wanted to work, the companies avoided paying payroll taxes, workers compensation, and unemployment benefits, let alone health or retirement benefits. The drivers were forced to pay to lease, fuel and maintain the trucks out of their own paychecks.

    The result of this scam has been high profits for the companies, lower wages and no workplace protections for the drivers, plus big losses to the social insurance funds. This arrangement put employers who complied with the law by continuing to treat their workers as employees at a competitive disadvantage.

    The port drivers' story is emblematic of the forces that crushed America’s middle class. Good paying, often union jobs were replaced by low wage, no-benefit jobs. "Manufactured in the U.S." was displaced by foreign goods, sold to consumers through the Wal-Marts and Home Depots and other giant retailers that perch at the end of global supply chains. Government, stripped of resources and will by corporate lobbyists and their wholly-owned elected officials, sat by while the law was violated and social insurance programs were weakened. And corporate profits soared.

    But times are beginning to change. The strike in Southern California carries with it all the elements and power of the new movement of low-wage workers and their allies to create a good jobs economy. The foundation of the strategy is the willingness of low-wages workers to risk their jobs to fight back. The strategy is driven by strategic, legal, and financial assistance supplied by labor unions, partnerships with community groups, and public campaigns against big brand names.

    The strikers, like many other port drivers, are mostly immigrants who often don’t speak English. Only recently did they become aware that their rights were being violated, after a free legal clinic was set up by two community groups at the port. Since then, drivers have filed more than 400 claims against companies under California’s wage and hour laws. The first 19 rulings resulted in an average award of $66,240, largely for wage and hour violations and illegal paycheck deductions for items like truck leases.

    The claims are part of an aggressive legal strategy, which includes filings under California’s wage and hour laws, class action suits, and claims that the companies are violating federal labor laws. The goal is for the firms to face such an onslaught of fines and court orders that they will begin to realize it would be better to abide by the law, rather than continue to defend their practices in court. California Attorney General Kamala Harris could be hugely helpful here if she used the growing number of cases to insist on an industry wide compliance settlement.

    The companies are fighting back. “It’s all out war,” an attorney for two workers who were fired for both supporting a union and pressing wage claims, told me. Green Fleet, the company that fired the workers and one of the companies being picketed, is using the full arsenal of union-busting tactics, including firing workers who are leading union efforts and hiring union busters who threaten workers. The company’s goal is to terrify other workers, so that they won’t support forming a union or file wage claims.

    The NLRB ruled in the workers' favor, establishing that they are employees, not independent contractors, but Green Fleet is appealing in order to delay any relief. The fired workers’ attorneys are asking a federal judge to immediately order the companies to rehire the workers who were fired and to inform all the workers of their right to form a union and protest unfair labor practices.

    In the face of this illegal harassment, the 120 drivers at Green Fleet and other firms walked off the job. They want to join the Teamsters union, which is providing key strategic support to their efforts through their Justice for Port Drivers campaign. Many drivers recently saw the benefits of unionization when drivers won union representation at Toll Global Holdings, an Australian based company, which is unionized in their home country. The unionized drivers actually get paid for the hours they spend waiting to pick up merchandise, and receive better wages and benefits.

    Los Angeles’ well-organized community-labor coalition, led by LAANE, has turned out hundreds of picketers to join the drivers. The picketers block company trucks driven by drivers who have not joined the strike. The pickets create even longer lines of trucks at the marine terminals, where ships arrive with containers full of goods. This is one way that the strikers can exercise the economic power to get the companies to settle. The Teamsters report that already some terminals have told the companies being struck to stop picking up goods in order to clear the blockade.

    Another weapon in the campaign is public pressure on the big brands that are the ultimate beneficiaries of the low-wages paid to the port drivers. All of Skechers shoes are delivered by Green Fleet. Protestors attended Skechers’ annual shareholder meetings, have leafleted stores, and this week had a plane fly over the company’s flagship L.A. store with a banner that read, “Skechers – laced with misery”. As LAANE’s Danny Feingold points out, unlike some other retailers, such as Nike, Skechers has refused to sign a code of conduct with labor standards for its contractors.

    Another element in the port drivers' campaign, as in low-wage workers' campaigns nationally, is a push to change public policy. There are some 75,000 port drivers around the country, of whom 49,000 are misclassified as independent contractors. The New York and New Jersey legislatures both passed bills in the last year toughening standards and enforcement for misclassification of port truck drivers. While New Jersey’s Governor Chris Christie vetoed that state’s bill, the New York legislation signed by Governor Andrew Cuomo includes strict standards and most importantly, civil and criminal penalties.

    There is a new movement growing in America, comprised of courageous low-wage workers and backed by unions, community groups, and activists to take on the huge companies that drive the low-wage economy. From fast food, to Wal-Mart, to workers who make car seats and immigrants who wash cars, the movement is learning a new strategy, based on mobilizing workers and the public. The twin goals of this movement are to enable workers to organize unions and to enact new public policy to rebuild the middle class. You can support the movement now, and lend a hand to port drivers who are on strike, by making with a contribution to the Justice for Drivers Hardship Fund. Remember, the device on which you are reading this now was delivered by a port driver.  

    Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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  • SCOTUS Ruling Doesn’t Gut Public Unions, But Creates New Challenges for Care Workers

    Jun 30, 2014Richard Kirsch

    The Supreme Court's decision in Harris v. Quinn will make it harder for home care and child care workers to organize for better pay and higher quality jobs.

    The Supreme Court's decision in Harris v. Quinn will make it harder for home care and child care workers to organize for better pay and higher quality jobs.

    A huge sigh of relief mixed with curses. That’s my reaction to the Supreme Court’s decision today to block home care workers in Illinois from being required to pay union dues, while continuing to allow public employee unions to collect dues from all the workers they represent. The decision in Harris v. Quinn blocks the right-wing assault against one of the most important pillars of progressive infrastructure, public employee unions, but will add to the challenge of raising wages and benefits in the surging low-wage workforce.

    First, some background on the case: As part of the right’s ongoing attack on working people, a right-wing legal group recruited a handful of home care workers in Illinois to challenge the state's requirement that the workers pay union dues. The workers are employed by individual patients but are funded by Medicaid.

    Having unions, in this case SEIU, represent home care workers is part of an admirable strategy to extend collective bargaining to workers who are publicly funded even if they do not work directly for the government. Since federal law does not provide collective bargaining rights to either public employees or domestic home care workers, using state law to organize these workers, who typically receive low pay with no benefits, is vitally important to their own well-being and to building a middle-class-driven economy.

    The National Right to Work Foundation’s attorney argued, as Lyle Denniston explains at SCOTUSblog, that "anything a public employee union does is an attempt to shape matters of 'public concern,' and it should not be able to compel support -- even for part of the monthly dues -- from workers who oppose the union's public policy ambitions."

    If the Court had followed that logic, it would have reversed its own precedent, set in the 1977 Abood v. Detroit Board of Education decision, which held that public employees could be required to pay dues for collective bargaining but not for purely political purposes. Fortunately, the Court didn’t go there today, which means that states and localities, which have the power to regulate public employee unions, will continue to be able to require that all employees who work directly for the government pay dues to the union that represents them. While this should have been a no-brainer given the Court’s precedent, it is a huge relief and enormously important to preserving the ability of public employees to organize together for decent wages and benefits. And it is clear defeat for the right’s campaign to eviscerate one of the most important progressive institutions.

    Instead, the Court’s decision today focused on whether home care workers are fully public employees. In a 5-4 ruling written by Justice Samuel Alito, it decided that these workers are only partial-public employees and so cannot be required to pay dues to a union that represents them. The ruling will make it much more difficult to organize the growing number of low-wage workers who care for the elderly and disabled through home care and for young children through child care.

    Home care and child care workers get paid very little, have few benefits, and make up a big chunk of the surge in low-wage jobs that defines today’s economy. But it is a huge challenge to organize workers who are directly employed by individuals. The answer has been to take advantage of the fact that the public is paying for a big chunk of their earnings by treating them as public employees, as Illinois Governor Pat Quinn did in the Harris v. Quinn case. The Court’s rejection of this approach creates new roadblocks to home care and child care workers who are attempting to organize unions capable of bargaining for better pay and higher quality jobs.

    The solution may to be to have the public take over home care and child care. If public agencies employed these caregivers, financed as they are now by a combination of public funds and sliding-fee payments by the individuals who use their services, these workers would be full-fledged public employees. This strategy will require a major change in the organization of care, but should be tested where there are progressive local and state governments. Its success would be a deliciously ironic turn against the right’s campaign to shrink government, and a big step toward creating a good-jobs economy to power an America that works for all of us.

    Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

    Image via Thinkstock

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  • CEO Performance Pay is Bad for Everyone Except CEOs

    Jun 5, 2014Richard Kirsch

    Executive compensation is soaring while workers and taxpayers feel the squeeze. A new Roosevelt Institute white paper explains why.

    Executive compensation is soaring while workers and taxpayers feel the squeeze. A new Roosevelt Institute white paper explains why.

    Americans hate the fact that CEOs of big corporations keep raking in millions while the incomes of most American households are sinking. Now a new Roosevelt Institute white paper by University of Massachusetts economist William Lazonick adds to the growing case that soaring CEO pay is not just unfair, but harmful. It’s bad for businesses, workers, and taxpayers, and it’s one of the reasons that the economy remains sluggish.

    Lazonick details the myriad ways that CEOs pump up their wages, painting a picture of crony capitalism in the board room and at the SEC. CEOs pad their boards of directors with other CEOs, who are all eager to hike each other’s pay. They hire from the same pool of compensation consultants, who then recommend to all of their boards why each of them deserves to be paid more.

    Almost all executive pay, which was back to its pre-recession average high of $30 million a year by 2012, is delivered in the form of stock. This exploits a policy loophole that taxes compensation of more than $1 million unless it falls into the category known as “performance pay.” Meanwhile, the CEOs and their teams of lobbyists and lawyers have gotten a compliant SEC to issue a host of rulings that invite stock price manipulation. The resulting higher prices are considered proof of better performance, and also instantly deliver millions to the CEOs through their stock options. Very neat. 

    Lazonick explains that corporations’ favorite method of boosting stock prices is buying back their own stock. While a firm is required to notify the public of its intention to buy back its stock, it doesn’t have to say when it will do so, which fuels price-boosting speculation and allows the firm to time its repurchases to maximize the CEO’s gains.

    The justification given by economists for stock-based performance pay is that corporations should be run to maximize shareholder value, and paying CEOs in stock aligns their performance with the purpose of their firm. But as my business school finance professor told a shocked classroom of my fellow students, the economic purpose of the firm does not have to be maximizing value for shareholders. The firm could just as easily be dedicated to maximizing the value for workers or communities or society at large.

    Lazonick’s version of this fundamental critique of corporate capitalism is that it is not only shareholders who have an investment in a corporation. Taxpayers invest in corporations through the public infrastructure and educated workforce corporations depend on. Workers invest through their contributions to corporate innovation. Taxpayers and workers lose if the corporation’s core economic performance – as opposed to the price of its stock – declines. The result is fewer people working, less tax revenue, and diminished community life. But CEO pay just keeps going up regardless.

    Lazonick argues that the CEO focus on stock buybacks has distracted them from investing in innovation to sustain their companies over the long run. It may also be true that in the absence of consumer demand, the CEOs see no better use for excess cash than to reward themselves and shareholders. But in fact, the stock market focus of U.S. industrial corporations, which has eroded middle-class wages and employment, is a big reason for lower domestic consumer demand. In contrast, Lazonick points out that Apple, which did minimal buybacks from 1994 through 2011, found no lack of consumer demand for its innovative products.

    The alternate economic paradigm laid out by Lazonick is to reward workers and taxpayers for their investments in a firm. That would not only be more just, it would also move the economy forward. If workers got paid more, it would increase consumer demand. The government could use the taxes collected to create jobs that would enhance infrastructure, improve education, and strengthen community services, all of which would add directly to economic progress. And innovative companies would benefit from tax-supported government spending and motivated, experienced workers.

    Lazonick lays out steps the SEC could take to reduce the use of buybacks to manipulate stock prices. He would also give workers significant representation on corporate boards. That makes great sense in theory, but would only work if we first dramatically strengthen labor law.

    Taxpayers would benefit from legislation proposed in both the House (HR 3970) and Senate (S 1476), which would close the performance pay loophole and cap the deductibility of CEO compensation at $1 million. That would increase federal tax revenue by several billion dollars a year. But even if all that money were invested in job creation, it would not be enough to generate the kind growth we need to spur significant demand. I think it would be unlikely to decrease compensation much either. It is more likely that corporate boards would consider the taxes part of the cost of doing business rather than reduce pay for their fellow conspirators.

    All of which is to say that, as with so many issues related to the core problem facing our economy – the concentration of wealth among a select few – it will take a seismic political shift to enact the kind of policies we need not only to limit CEO pay, but to build an economy driven by broadly shared prosperity. 

    Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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  • Working Families Party Endorsement of Cuomo Shows Progressive Political Power

    Jun 3, 2014Richard Kirsch

    If the goal is to achieve real progressive change that improves lives, then New York Governor Cuomo's deal with the Working Families Party is on the right track.

    It would be a mistake to think that the New York Working Families Party's endorsement of a Wall Street, austerity Democrat – Andrew Cuomo – is a defeat for the surging progressive wing of the Democratic Party. In fact, just the opposite is true. The endorsement was a demonstration of how to build power to do what progressive politics is ultimately about: delivering real improvements in people’s lives.

    If the goal is to achieve real progressive change that improves lives, then New York Governor Cuomo's deal with the Working Families Party is on the right track.

    It would be a mistake to think that the New York Working Families Party's endorsement of a Wall Street, austerity Democrat – Andrew Cuomo – is a defeat for the surging progressive wing of the Democratic Party. In fact, just the opposite is true. The endorsement was a demonstration of how to build power to do what progressive politics is ultimately about: delivering real improvements in people’s lives.

    Up to 24 hours before the WFP’s Saturday convention, it looked like the Party would nominate Zephyr Teachout, a law professor and activist leader in the fight to reverse Citizens United and enact robust public campaign financing, who ran Howard Dean’s breakthrough online organizing and fundraising campaign for president. Public opinion polls taken earlier in May showed that a progressive WFP candidate could get more than 20% of the popular vote, radically shrinking Cuomo’s victory margin and his quest to demonstrate nationally that he would be a credible candidate for president.

    That threat forced Cuomo to agree to make a u-turn in the way he has dealt with the New York State Senate and to agree to push for the passage of six very important progressive priorities in the legislature. After Cuomo, looking to me like a cornered man, made those pledges by video and phone to the WFP convention, a majority of delegates (58 percent), including me – I’m a member of the WFP State Committee – approved his endorsement.

    Cuomo’s key concession was to end his support for the coalition between Republican state senators and a handful of breakaway Democratic state senators, which effectively had maintained Republican control of the State Senate. With the exception of a brief period four years ago, Republicans have controlled the New York’s State Senate for decades, blocking an Empire State Building-high pile of progressive bills passed by the State Assembly.

    Cuomo agreed to join New York City Mayor Bill de Blasio and New York unions active in the WFP – including SEIU, New York City’s United Federation of Teachers, CWA, and UAW – to create a well-funded campaign to elect Democrats and to run primaries against any Democrats who do not agree to fully support Democratic control of the state senate.

    But what swayed my vote and the vote of other delegates is the specific package of legislation that Cuomo agreed to push for, should the campaign be successful in putting Democrats in control of the Senate.

    One is immediately raising the minimum wage in New York to $10.10, indexed to inflation, and agreeing to allow local governments to raise wages 30% higher. Cuomo has been strongly opposed to giving local governments the authority to do that. This alone is a huge victory for the fast-food workers’ movement, which originated in the city, as there is little doubt that Mayor de Blasio and the progressive City Council majority elected with him will quickly take advantage of their new power if given the opportunity.

    A second bill would decriminalize marijuana. New York would become the first state to do so legislatively, rather than by referendum. Given the huge racial imbalance of pot arrests in the city, which continues to ruin the futures of generations of young Black and Latino men, this is an enormous step forward for racial justice and against mass incarceration.

    The New York Dream Act is on the list, which would provide tuition assistance to DREAM kids, aspiring immigrant college students who were brought to the United States as children. The Governor also committed to support funding of 100 community schools in low-income communities outside of NYS, which provide social, health and emotional services and act as community centers. Mayor de Blasio will support funding another 100 in New York City.

    Another bill is the Women’s Equality Act, with ten provisions including one that the Republican controlled State Senate has opposed – codifying the right for women to determine whether to have an abortion. The Act would includes measures on promoting pay equity, stopping sexual harassment, preventing pregnancy discrimination in all workplaces, strengthening human trafficking laws, bolstering protections for domestic violence victims, and ending family status discrimination.

    Last but absolutely not least is finally a robust small-donor public financing bill for statewide and legislative races. In the long run, if this becomes law, it will be the most significant part of the agreement. As Mayor de Blasio pointed out in his speech urging the WFP delegates to give Cuomo their votes in return with this agreement, he could not have been elected mayor without the New York City public financing law, which is the model for the state bill.

    De Blasio began his remarks reminding the WFP delegates that he had been a founder of the Party. De Blasio brokered the deal between the WFP and the Governor, saying that he could not deliver on a progressive agenda in New York City unless Democrats gained control of the state senate.

    The delegates who voted for Teachout were motivated by two factors, which were shared by almost everyone who attended the convention. One is a strong distaste and distrust for Cuomo. The second is the heartfelt pull to vote for Teachout as a candidate who shares our values and worldview. Particularly in the context of the national debate within the Democratic Party over whether it will become the Party of Elizabeth Warren and Bill de Blasio, this was a powerful attraction for Teachout’s candidacy.

    As those of you who follow my writing know, I work a lot on helping progressives promote our ideology, our worldview. As such, you might have expected me to decide that Teachout’s campaign – which would have given voice to that worldview – would have been where I stood. But for me, the reason I focus on changing worldviews is not just because I want people to agree with us. It is because when people share our worldview, they are much more likely to support candidates and policies that deliver on our core beliefs.

    For me, this is the ultimate purpose of politics: to enact laws that deliver concrete improvements in people’s lives, that help them care for and support their families and live in dignity, that protect us and our planet.

     

    On Saturday, WFP used its political muscle – built through a 16 year process of organizing, coalition building, and electing progressives to higher and higher offices – to take what could be a game-changing step in New York to winning real improvements in people’s lives and making it possible for candidates in New York to win office without relying on big campaign contributions. That’s what political power should be used for. And like any muscle, using it just makes it – and in this case progressive political power – stronger.

    Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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