New Democrat Update - March 2002
TIME FOR A CHOICE
Colorado's mandatory auto insurance coverage, combined with some of the highest premiums in the country, is resulting in many illegally uninsured motorists on the road. In fact, the current system rewards those who choose not to purchase auto insurance. If hit by an insured driver, uninsured motorists can sue and get compensation from the insurance company of the insured. However, if an uninsured motorist hits an insured one, the insured gets nothing - unless he or she paid an additional premium.
The costs of litigation and occasional huge rewards for "pain and suffering" also boost insurance premiums to unconscionable levels, especially in cities. In many urban cores, auto premiums are nearly double the rates in the suburbs, and are often more expensive than the cars they insure.
The budgetary pressure on middle-class and low-income families is very real. Middle-class families spend, on average, 150 percent more on auto insurance than they do on education. Families earning less than half of the poverty line spend an average of one-third of income on premiums when they buy auto insurance. A study in Arizona revealed that half of all poor families have to put off paying basic expenses - food, rent, etc. - to pay their auto insurance premium!
The legislature is now trying to overhaul this very broken, expensive and unfair system. At the very least, Democrats should support the part of the proposal that gives drivers a new choice - waiving the right to sue for pain and suffering (except in cases of intentional injury or driving under the influence).
According to the congressional Joint Economic Committee and the RAND Institute for Civil Justice, "Auto Choice" would allow Colorado drivers to reduce their annual premiums 26 percent, with reductions for Denver residents reaching up to 40 percent. In testimony before a U.S. Senate committee, Denver Mayor Wellington Webb stated, "Denver residents alone could save an estimated $90 million annually."
Affordable insurance will help senior citizens on fixed-incomes and encourage former welfare recipients in cities to take jobs in the employment-rich suburbs - personal mobility is key to upward mobility. Lower premiums will also induce more lower-income citizens into the system - another force that will decrease rates for everyone else.
In addition, Auto Choice combats a major disincentive of the current system by removing the financial burden uninsured motorists impose on those who obey the law and purchase coverage. Insured drivers would now get the benefits they paid for - no more, no less. The uninsured would get nothing.
By decreasing the portion of premium dollars going to litigation-related expenses, Auto Choice increases the amount of compensation available to seriously-injured victims. Compensation will be especially more available for the injuries of low-income households since they most often lack adequate health insurance.
Consumers who waive the right to sue for pain and suffering would still be eligible for reimbursement of medical bills, lost wages and other health-care related expenses. The option to sue would also still be available for a higher premium.
Despite being endorsed by a broad array of organizations and newspaper editorial boards (including The Denver Post and Rocky Mountain News), Auto Choice will draw intense opposition from trial attorneys. That fact is not surprising since lawyers now pocket about 28 cents on every dollar paid in premiums under the current system - almost twice the amount injured people receive for legitimate medical bills and wages. In a membership recruitment letter, the Association of Trial Lawyers of America has described Auto Choice as "an assault on our livelihood."
Democrats should support Auto Choice because the middle class can use the extra cash and those less fortunate need the protection. It offers a way to divert dollars now going into the pockets of lawyers into the wallets of those trying to get into the middle class and those struggling to stay there.
If Colorado Democrats support Auto Choice, they will be telling these two truly important constituencies that they come before any special interest group. Democrats should do the right thing, help the people who most need help, and incidentally, make it clear that no interest group can tell our party or insurance consumers they have no choice but to toe the line and pay the piper.
SAVE THE DATE, JOIN THE CONVERSATION!
Register now for the sixth annual Democratic Leadership Council's 2002 National Conversation on July 28-30 at the Hilton New York, 1335 Avenue of the Americas, in New York City. The Conversation assembles and showcases the expanding ranks of New Democrat elected officials from around the country who are changing politics at all levels. On a first-come, first-serve basis, the DLC helps elected officials with travel expenses.
The Conversation consists of "town meeting" plenary and breakout sessions to give elected officials the chance to exchange ideas and talk specifically about what they are doing on issues of interest to them. A variety of daytime and evening events will be scheduled, including speeches, issue forums, political panels, press conferences, and receptions. It is a great opportunity for leaders from federal, state and local governments to compare notes, discuss innovative governing strategies and exchange cutting-edge ideas on challenges such as shaping the New Economy, completing the job of welfare reform, revitalizing the cities and impoverished rural areas, and dealing with suburban sprawl.
Last year, 14 Coloradans joined over 700 attendees from 39 other states to hear presentations from prominent national leaders like DLC Chair Sen. Evan Bayh, Sen. Joe Lieberman, Senate Majority Leader Tom Daschle, Sen. Hillary Rodham Clinton, DLC Vice Chair Rep. Ellen Tauscher and Maryland Lt. Gov. Kathleen Kennedy. Past participating Colorado elected officials include former Governor Roy Romer, Denver Mayor Wellington Webb, Senate President Stan Matsunaka, Senate President Pro Tem Ed Perlmutter, House Minority Leader Dan Grossman, Assistant House Leader Minority Jennifer Veiga and House Caucus Chair Abel Tapia. A complete list and photos are available.
The DLC forged the New Democrat agenda of opportunity, responsibility, community, and empowering government - the cornerstone of the platform on which President Clinton was twice elected to the White House. New Democrats have already moved our nation beyond politics as usual with successful ideas like voluntary national service, welfare reform, community policing, charter schools, fiscal responsibility, and tax credits for the working poor.
After making a tremendous impact at the national level, the DLC is focused on identifying and promoting the next generation of New Democratic leadership - both elected officials and civic leaders - for the 21st century. Add your voice and help us develop an agenda based on progressive ideas, mainstream values, and fiscally responsible approaches to governing.
If you are interested in attending the National Conversation or have questions, please contact Jim Gibson . See you in the Big Apple!
"AFTER WELFARE: THE NEXT STEPS"
With Congress set to renew the law, "Blueprint," the flagship policy journal of the Democratic Leadership Council, spotlights strategies to continue the successful transformation of welfare into work-driven social policy. To enable the millions of workers who have left the welfare rolls to keep working and climb the income ladder, the magazine focuses on how to ensure that no American family with a full-time worker lives in poverty, create a seamless system of supports for working families, require fathers to do their part, reduce unwed childbearing and modernize unemployment insurance. The "Point-Counterpoint" debate on how well welfare reform has worked should be read by anyone who cares about this important issue.
You can read Blueprint online. For a hard copy, contact Jim Gibson.