Identifying the Biggest Rural Losers

December, 2022

Washington — After the mid-term elections, which saw rural voters across the nation vote overwhelmingly for Republicans, a friend and colleague of mine asked pointed questions:

"Many people, especially Democrats, make the assumption that rural voters are only hurting themselves by voting Republican so consistently, but does actual evidence support it?   Can the relationship be graphed and if so, would presenting it make any difference to voters?"

So I went looking for answers.  A good baseline year, I thought, would be 1960, when rural areas were still well-populated with small farms, when agricultural policy under President Eisenhower followed much of the framework established in the New Deal by President Roosevelt, and when Democrats were competitive in rural areas in federal, state, and local elections.  The baseline should be well before President Nixon installed Earl Butz as Secretary of Agriculture, who set a new course* for farmers: "Get-big-or-get-out" and "plant fencerow-to-fencerow."  Many in rural America embraced the slogans and have been voting Republican ever since.  President Trump's Secretary of Agriculture, G.E. "Sonny" Perdue, phrased it this way: "In America, the big get bigger and the small go out."  The economic and health consequences of these Republican policies have been profound, as farm consolidations and rural depopulation have been proceeding accordingly.     

I have not found a study with a baseline that looks back to pre-Butz years, but an impressively rigorous, peer-reviewed work encompassing the last five presidential elections has recently been published.  Analyzing mortality rates, with an abundance of graphs, it concluded:

...Americans living in counties that voted Democratic during presidential elections from 2000 to 2016 experienced lower age adjusted mortality rates (AAMRs) than residents of counties that voted for a Republican candidate, and these patterns were consistent across subgroups (sex, race and ethnicity, urban-rural location). The gap in overall AAMR between Democratic and Republican counties increased more than sixfold from 2001 to 2019, driven primarily by changes in deaths due to heart disease, cancer, lower respiratory tract diseases, unintentional injuries, and suicide. These patterns were similar when we assessed mortality rates by state governor election results, with evidence of an increasing gap between Republican and Democratic voting areas over the study period.  

The authors suggest many causal factors to explain the relationships they found.  They did not look at rural population declines (as in "get out") as a direct factor, which should be explored in further research.  Closed hospitals aren't saving lives.  

The study ended before the Covid-19 pandemic began, which hit rural areas especially hard. Provocative headlines such as "How Many Republicans Died Because the GOP Turned Against Vaccines" suggest the trends will only worsen when new data are added. 

Rather than join a Democratic chorus saying rural Republicans are stupid for killing themselves, I think it's time to look at Democrats' own responsibility for the calamitous state of affairs.  

In the 1970s, Republican Senator Robert Dole and Democratic Senator George McGovern began a decades-long collaboration on rural policy in the Senate Agriculture Committee, through periodic iterations of the Farm Bill.  Dole's primary interest was production agriculture (farm subsidies), while McGovern's focus was nutrition (food stamps, school lunches).  Their combined efforts attracted the political support of rural Republicans and urban Democrats, which defused urban versus rural conflicts.  

Over the years, however, successor politicians came to simplify the tradition into a raw political understanding that Republicans set rural policy and Democrats are indulged on food stamps (SNAP) as a trade-off.  

What has been lost is that both Dole and McGovern had strong interests in the priorities of the other, and shaped legislation accordingly.  Dole was sincerely committed to nutrition, as was McGovern to farm supports.  Now the positions have hardened:  Republicans show little interest in SNAP other than to cut funding; many Democrats have lost interest in nutrition as well, devoting their efforts to ensuring that SNAP recipients can buy the same junk food as others do.  Worse, Democrats have lost interest in rural policy, often not campaigning for the rural vote, leaving rural America to its fate.  

Democrats may find satisfaction in shaking their heads at the reckless obtuseness of Republican voters, but Democrats have fared much worse politically under the trade-off.  They lost the presidency in 2016 and the House in 2022 to a failure to compete effectively in rural areas.  Republican politicians have won disproportionate political power by leveraging the rural vote.  

Meanwhile, rural Republican voters themselves have paid a disastrous price, many giving their very lives.  That's clear from any study of the conditions and the ongoing, downhill trends in rural America.   

Democrats bear some of the responsibility, to the extent they have given up on rural America.  A good way to own up to it would be to begin anew on the 2023 Farm Bill with no assumptions of political trade-offs.  Democrats must offer an aggressive set of proposals to address the ills of rural America and prepare to fight for them within the current structure of the Farm Bill.  (Don't know any?  Ask, and we'll provide you some, and lead you to others.) 

In other words, for the sake of everyone, blow up current misguided political expectations associated with the Farm Bill reauthorization.  And announce it now, through the highest levels of House and Senate elected leadership — looking at you, Hakeem Jeffries and Chuck Schumer. 


*Ag policy writers Rosenberg and Stucki argue that Earl Butz was not a pivotal figure in that he did not inaugurate the programs his critics say he did, because they were well underway before he became Secretary, in part under Democratic auspices.  While this is a useful perspective, it was under Butz that corporate agriculture — Big Ag — completed a highly visible capture of federal ag policy and has never since loosened its grip.  Butz himself, who served on Big Ag corporate boards, was proud of it.  




The MOHELA Strategy and the Nebraska AG

December, 2022

Lincoln — Last week, I explained in the Nebraska Examiner why the Biden administration's student loan cancellations make good sense for the Nebraska economy and expressed displeasure that the Nebraska attorney general is trying to block the well-justified loan relief.  

The motivation of Nebraska's attorney general is now partially explained by reporter Michael Stratford of Politico.  The lawsuit was planned by Phil Kerpen, a political operative with close ties to Koch brothers' organizations, who determined that the Missouri student loan lender and servicer MOHELA might have hard-to-achieve legal standing to bring a lawsuit against the loan relief:

Seizing on the harm to loan servicers that work for the Education Department, like MOHELA, was “the best opportunity to bring a successful lawsuit,” said Phil Kerpen, a conservative political organizer who leads American Commitment and was an early proponent of the strategy and circulated the idea in conservative circles.

How that strategy was circulated to the Nebraska attorney general, with an explanation of why he should front for MOHELA's interests above those of his own Nebraska citizens, would make for a good freedom of information request.  For its part, MOHELA denies* communicating with the Missouri attorney general to file the lawsuit, but there are five other plaintiffs, led by Nebraska, that might have been the conduits to carry out the strategy, not to mention other go-between organizations in Kerper's network.  

MOHELA has a history of unsavory behavior, as described in federal and state audits of the quasi-governmental organization.  It built up wealth in the period 2003-2006 by making false claims against federal taxpayers in the tens of millions of dollars.  The Missouri state auditor has identified its federal "Special Allowance" revenues over the period, increasing from $16.2 million, to $21.8 million, to $51.2 million, to $101.1 million in the last year of the false claims.   

But a Kearney & Company audit under federal auspices in 2007 showed that the rapid increases in MOHELA revenues resulted from illegal manipulations of student loans among bond estates, in the hundreds of millions.**  

The Missouri state auditor explained what MOHELA did with the bonanza of revenues: spent lavishly on its executives and employees in salaries, bonuses, vacation time, retreats, automobiles, and no-bid contracts, much of which was decided in violation of open meeting requirements.  See the audit showing where the money was going:

MOHELA's behavior was not unique.  It was duplicated at other lenders and servicers, two of which (Navient and PHEAA) have now belatedly been terminated as federal contractors because of bad loan servicing.  But they still own federally guaranteed student loans and, if the Politico reporting is correct, are eager to see the MOHELA-based strategy succeed. 

The case Nebraska v. Biden should be dropped, or settled honorably.  It is headed to the U.S. Supreme Court on a course to waste money and make bad law, however it is decided. 


* MOHELA, recipient of a huge new federal contract to take over the servicing of the Public Service Loan Forgiveness program from PHEAA, would not want to be seen conspiring with the Missouri attorney general to deny benefits to many of the same borrowers who were deceived by PHEAA, whose approach to loan servicing was to keep borrowers in debt in perpetuity, because that's how they made their money.   

** Available on request.  

Unfortunately, My Election Predictions Came True

December, 2022

Lincoln — It's time to match up my election predictions with reality.  Before the 2022 elections, I made two predictions.

The first prediction:   

Democrats will lose races they should have won.... Their failure to be competitive in culturally rural precincts will doom many of them.  It is not that they will lose in these areas, but that they will lose by such wide margins that they cannot make up for the losses elsewhere.  

I talked to two Nebraska congressional candidates about this, months before the election when they still had time to do something about it.  Tony Vargas, in the 2nd District, and Patty Pansing Brooks in the 1st, were both excellent candidates and each listened carefully, even though their purpose in calling me was fund-raising.   

Tony Vargas said he agreed on the importance of the rural areas and that he was going to make a special effort in Saunders County to cut the size of his expected loss there, as well as in the rural parts of Douglas and Sarpy Counties.  He quickly said, however, that he was going to win because of his large margins in North Omaha and particularly South Omaha. 

I replied that he needed to lose only 40-60 in the rural areas and anything exceeding that would result in a defeat.  Also, we discussed how Republicans were making a big effort, especially in South Omaha, to lose by less than expected.  

After the votes were counted, Tony Vargas won Douglas County by 52-48 but lost Saunders 25-75 and Sarpy 35-65.  Had he lost Saunders and Sarpy by 40-60, he would not have won as I predicted, but it would have been extremely close and he would have won had he been able to do slightly better in urban Omaha.  In other words, it was the Republican strategy to cut losses in South Omaha that worked better than the Democratic effort to cut losses in rural areas.  

Patty Pansing Brooks also agreed that cutting her losses in rural counties was important — I offered the 40-60 goal.  She said that she was searching for a way to reach it.   I said that showing up in those counties and listening was absolutely necessary, but she also needed a message that would resonate with rural voters.  She asked what I thought that could be, genuinely interested in getting campaign advice beyond the sources who seemed to be telling her that she could win by maximizing urban, pro-choice votes in Lancaster and Sarpy Counties.  

I said rural voters would respond to a candidate who was truthful with them about the failure of Republicans' get-big-or-get-out agriculture policy, how a half-century of it has depopulated rural Nebraska, closed schools, hospitals, and nursing homes, polluted soil and water, destroyed supply chains, and tragically increased rural deaths-of-despair to alarming levels.  And that she would try to reverse it, starting with bold and creative proposals in the 2023 Farm Bill.  She probed my advice on how to reach rural voters with several good questions, apparently because she had not heard this before from within her campaign and its supporters, either national or local.

Patty Pansing Brooks lost counties other than Lancaster by 29-71, dooming any hope that big wins in urban areas could pull out a win for her.  Even losing 40-60 in those counties would have left her about 13,000 votes short. 

The second prediction: 

[P]ost-campaign analysts and pundits will either blame other factors [for losses, beyond the failure to compete for the rural vote], such as not campaigning more ideologically to the left or to the right, or that it is impossible to compete for such votes anyway.  

Almost on cue, Nebraska Democrats started a public squabble about ideology after the election, with arguments about Democrats' campaigns being too far left on an ideological scale to win.   Of course that was the Republican argument, so it seems counterproductive for Democrats to concede it without pushback.  

But most voters aren't steeped in political theory and don't know right from left as much as they care about what's happening in their own lives.  What too many voters in culturally rural areas perceive is that Democrats don't care and have nothing to offer on any scale.  

Democrats have not helped themselves post-election by skipping over the heartland in their choices for House leadership posts.  Democrats are signaling that rural policy doesn't matter by demoting the Iowa caucuses in the 2024 presidential race.  Republican elected officials at federal and state levels are doing great damage to rural America, but Democrats have lost their voices, and it doesn't look as if they'll be getting them back soon.  

I wish my predictions had been wrong.  Tony Vargas and Patty Pansing Brooks are experienced state senators, outstanding persons and candidates, and one or both should be in Congress.  If only national Democratic leaders cared more about rural collapses, across many states, Democrats would have a sizable House majority. 

Nebraska v. Biden: The Amici Briefs

December, 2022

Lincoln —  There are many good reasons why Nebraska should drop its lawsuit against the Biden administration's student loan cancellations.  No court has yet agreed that Nebraska has standing to sue, and now comes the news that Nebraska's economy is headed into decline in 2023.  

A move by Nebraska leadership to withdraw the lawsuit would be a huge help to the Nebraska economy, a boost of billions of dollars in increased capacity for over two hundred thousand Nebraska borrowers to grow in-state roots, households, and families.  

This unavoidable point is being raised in one of several new amici curiae briefs presented to the U.S. Supreme Court.  A coalition of 21 amici writes:

Without cancellation, a borrower’s ability to pay for basic necessities, invest in affordable housing, or buy items like a car will be minimal; in contrast, cancellation allows borrowers to save for a down payment or make larger purchases. In turn, these purchases put money into the economy and provide more tax revenue to the Plaintiff States.   [Emphasis added]

These revenue benefits to the plaintiff states are more than enough for the Supreme Court to throw the case out for lack of any plaintiff''s standing.  The court may see this as an opportunity to signal potential state government plaintiffs, everywhere, that speculative, circuitous arguments about irreparable harm, merely to challenge policies states don't like — or want to politicize — will not be sufficient to upend decades of jurisprudence on requirements for standing.   

Another amici brief, from law school deans and constitutional lawyers across the country, pushed back against the idea that the Department of Education's cancellations raise "major questions" beyond what is already authorized by statute, as if the case were similar to what the high court recently determined on major questions in EPA v. West Virginia.  The constitutional scholars write:

The Department is not asserting jurisdiction over matters not previously within its purview or trying to regulate topics Congress never assigned to it; it is acting in the center of its statutory authority. The Secretary’s HEROES Act waiver and modification authority falls squarely within the responsibilities Congress has vested in the Secretary. For example, in tasking the Department of Education with carrying out the purposes of the federal student loan programs, Congress already authorized the Secretary to modify “any . . . provision of any note evidencing a loan” made under Title IV and to “compromise, waive, or release any right, title, claim, lien, or demand,” among other powers. 20 U.S.C. § 1087hh(1)-(2). Given that Congress expressly authorized the Secretary to modify, compromise, or release federal student loan debt, the Department’s use of its HEROES Act authority to do exactly that hardly represents a “transformative expansion” or “radical or fundamental change” in its power. West Virginia, 142 S. Ct. at 2609-10.... [Emphasis added]

This presents an opportunity for Chief Justice John Roberts to find a middle ground majority within the court for narrower rulings, as he has tried to do in the past, most notably in sustaining the Affordable Care Act by determining that Congress was properly using its power to tax when it established penalties against the uninsured.  Here, the question is much easier:  the HEROES Act aside, the Secretary of Education already has explicit statutory powers to cancel student loans.  Thus, this is the perfect opportunity for the court to put guard rails around its sweeping West Virginia decision.  

It should not be lost on anyone that dragging out this lawsuit also hurts the federal treasury.  The sooner it is resolved for borrowers, the sooner a majority of borrowers go back into loan repayment, many with more manageable debt that facilitates repayment, and the sooner borrower accounts can be closed if their balances are within the cancellation targeting limits. The longer it drags out, the more unmanageable the student loan program becomes and the more inequities arise.  Why should a repayment pause extension, to accommodate the Nebraska lawsuit, benefit higher income borrowers at the expense those who are victims of appallingly bad loan servicing and debt traps, and who badly need immediate remediation?  

Nebraska Governor-elect Jim Pillen is being left with many messes on his hands by his predecessor, not the least of which is a weakened economy that needs student loan cancellations to turn it around.  Moreover, without the cancellations, many borrowers will be leaving the state to seek better opportunities elsewhere, despite Pillen's rhetoric about keeping more Nebraskans at home.  Why stay in Nebraska, where water is increasingly poisoned by nitrates, where opposition to immigrants is holding back industry, where state government has become an instrument of one monied family, and where the attorney general spends his time looking for divisive, counterproductive lawsuits to join or to lead, like Nebraska v. Biden.   

Governor-elect Jim Pillen and Attorney General-elect Mike Hilgers should huddle and resolve to look for multiple-win opportunities in litigation.  Dropping the opposition to student loan cancellations would be a win for the Nebraska economy, for aggrieved borrowers, for equity, and for the federal treasury.  Seldom do any two Nebraskans have the chance to make such a positive contribution to the state and to the whole country.  

They should announce now that they will drop the lawsuit.