Bailout or Not, Women Are Headed for Financial Trouble

Congress is working at a fevered pitch to rush through a massive $700 billion emergency spending measure to bail out the ailing banking industry and protect the economy.

Lawmakers sparred Thursday over the broad outlines of the bill, and congressional leaders hoped an agreement could be reached in time to schedule a vote on final passage before the end of the weekend.

But women are headed for financial trouble whether the bill wins passage or not, women's rights advocates say.

"It's bad news all around for women," said Vicky Lovell, director of employment and work-life programs at the Institute for Women's Policy Research, a think tank in Washington, D.C., that focuses on women's economic issues. "I don't see anybody predicting that there's a way out of this that's going to be good for consumers or taxpayers in general, or for women."

The proposed $700 billion bailout introduced by the administration amounts to about $150 billion more than has been spent to date on the war in Iraq, according to the National Priorities Project, a research organization in Northampton, Mass.

As lawmakers went back and forth over the details of the banking bailout bill, Joan Entmacher, a budget expert at the National Women's Law Center in Washington, D.C., took a dim view of the overall economic prospects for women.

Bleak Forecast

If the bill does not pass, and the economy worsens, women will suffer most because they have less wealth than men and are more vulnerable in economic downturns, she said.

If Congress does clear the bill, its high cost will put a fiscal squeeze on government programs that aid low-income people, most of whom are women, she said.

Under the plan debated Thursday, the federal government would assume $700 billion in bad debts of troubled financial firms to help them keep lending spigots open to individual and business borrowers. These measures are expected to help stem layoffs and deeper losses for retirement accounts tied to credit-hungry financial markets.

The high price of the package will have a similar -- but potentially more profound -- effect on the budget as the war in Iraq and the tax cuts of 2001 and 2003, Entmacher said.

Those big-ticket items prompted lawmakers to rein in government health care programs, she said. More likely to live longer and to live in poverty, women -- especially women of color -- are the main beneficiaries of these programs, Entmacher said.

Women's rights advocates were hoping for the inclusion of two provisions advocated by Democrats earlier this week: helping certain borrowers avoid foreclosure and creating a federal fund to insure money market accounts.

"Because they've been disproportionately affected by predatory lending, this could be especially important to women," Entmacher said.

Despite using credit at rates comparable to men and averaging slightly higher on credit scores -- 682 versus 675 -- women have a disproportionate share of the high-priced "sub-prime" loans, putting them at higher risk of foreclosure, according to a 2006 report by Allen Fishbein, a scholar at the Consumer Federation of America, a think tank and lobby in Washington, D.C. About one-third of female borrowers took on sub-prime mortgages compared to about one-quarter of men.

Money Market Funds

A Democratic proposal circulated earlier this week also included an insurance plan for money market funds -- low-risk, low-interest reservoirs of capital that invest in safe forms of debt. The plan would be modeled on the Federal Deposit Insurance Corporation, which was created in the wake of the Great Depression to insure bank deposits.

That would be especially helpful to women, said Lovell, of the Institute for Women's Policy Research, because women tend to have less personal savings and therefore are more inclined to invest in money market accounts, which have traditionally been viewed as safe havens. Several major money markets have collapsed during the crisis and fears that others could be at risk, however, have spurred the idea of federal insurance.

It was unclear Thursday if these provisions would end up in the final bill when a deal is reached.

Lovell also noted that Democrats' push to curb executive pay at the institutions that received federal aid -- initially opposed by the White House and many Republicans as excessive regulation -- would affect far fewer women because they hold fewer executive positions.

The guns-and-butter debate that typically emerges in wartime when another major cost arises has yet to rear its head in Congress.

But Leslie Wolfe, president of the Center for Women Policy Studies in Washington, D.C., a research group that focuses on women's human rights, predicted the onset of such discussions. So many people are "shell shocked" by the crisis that they haven't begun to discuss issues beyond the pending legislation in Congress, she said.

Anti-War Protests Revived

But female anti-war activists and pundits who have long criticized the Iraq war mobilized this week.

Code Pink, the anti-war group led by women and based in Venice, Calif., staged protests on Wall Street Thursday, calling on the government to pay for the bailout bill with new taxes on upper-income Americans and on financial transactions.

"They continue to find money for what they need, and borrow it, but they never find money for what the people of America need," said Code Pink co-founder Jodie Evans.

"Welcome to Economic Shock and Awe," Ariana Huffington, founder of the online Huffington Post Web site wrote, comparing the rush to bailout to the Bush administration's rush to war. "Even the amount of taxpayer money being bandied about -- $1 trillion -- is similar. Think you got your money's worth for the Iraq war? Congratulations -- you're about to buy another pricey debacle."

Linda Basch, president of the National Council for Research on Women in New York, said women are especially vulnerable during economic downturns because they are more likely to be unemployed than men; as a result they have less money and face longer periods without regular income. If they do have a job they tend to make less, have fewer benefits or have part-time positions, she said.

Women are also more likely to hold minimum wage jobs, to leave the work force to shoulder caregiving responsibilities, and earn less than men in similar jobs, advocates say. Women also save less money and have smaller pensions or retirement accounts.

"We have fewer assets and fewer savings than men and therefore we are very worried about personal financial security," said Debbie Frett, head of Business and Professional Women USA, a Washington-based lobby for businesswomen.

In the last two years, more than 200,000 women have left jobs in the financial sector of the economy, but the number of men employed in such jobs has remained stable, according to statistics compiled by the U.S. Department of Labor. That suggests to Lovell that the bulk of those laid off in the sector have been women.

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