Family Budget Crisis Also Needs Attention

January 17, 2003

78th Legislative Session in Focus

FAMILY
BUDGET CRISIS ALSO NEEDS ATTENTION

Texas
families under increased assault by high fees, rates as markets deregulate

AUSTIN, TX — "Did the Legislature
work to fix the family budget crisis?" — will be the question by which
the success or failure of the 78th legislative session will be judged amidst
the state’s fiscal crisis and temptation by lawmakers to seek quick fixes that
threaten family finances.

Reggie James, director of the Southwest
Regional Office of Consumers Union, told reporters at a briefing Friday that
there is plenty the Legislature can do in 2003 to improve the lot for consumers,
starting with low to moderate income families. "The family budget crisis
is just as real and urgent to Texans as the state’s financial crisis,"
he said. "Let’s make sure not to fix the state budget crisis by busting
the family budget even further."

A key area will be ensuring the excesses
of deregulated or inadequately regulated industries — such as insurance, telecommunications,
and electric — are kept in check and even reversed, according to James.

"Consumers won’t be better off
if we nickel-and-dime them with fees galore, if we fail to close the loopholes
that allow insurance companies to raise rates at will, or if we limit their
access to the courts when they are wronged by medical practitioners," James
said.

"They won’t be better off if
the Legislature cuts regulatory agencies budgets or cuts programs or if it leaves
thousands of Texas children in the cold without medical insurance," he
added.

Consumers Union will focus early
in the session on seeking real solutions to the two emergency items: insurance
reform and changes in the medical malpractice system.

"The insurance industry and
its powerful lobby have been busy lately clouding the issue of insurance reform,"
James said. "We will measure any proposed bill against our five-point plan
for real insurance reform. Our bottom line is simple: we must work to bring
rates down dramatically."

On the issue of medical malpractice,
James said that real reform must take into account all elements that affect
the cost of insurance — primary quality of care and insurance regulation —
and secondarily, legal reforms. "Let’s reduce rates, not rights,"
he said. "The system cannot be fixed by leaving quality of care out of
the equation. Reforms should start there."

A few other key consumer issues for
the session, detailed in Consumers Union’s issues booklet available at http://www.consumersunion.org/pdf/swro_pp/Intro.pdf,
include:

• Strengthening consumer protections
  related to the telephone and electric markets.
  
• Expanding access to Texas’ health
  care independent review system.
  
• Lowering the cost of prescription
  drugs for families and state government.
  
• Reforming sales and ownership
  practices related to manufactured homes.
  
• Closing usury loopholes used by
  out-of-state banks to market pay day loans.
  
• Curbing the high cost of vehicle
  finance add-ons.
  
• Reforming Texas’ funeral regulatory
  agency and adopting a "bill of rights."

# # #

CONTACT:
Reggie James
(512) 477-4431

NOTE TO NEWS MEDIA: Our issue
papers for the 2003 legislative session are available by calling (512) 477-4431,
ext. 114.

Consumers Union, publisher of
Consumer Reports, is an independent, nonprofit testing and information organization
serving only the consumer. We are a comprehensive source of unbiased advice
about products and services, personal finance, health nutrition, and other consumer
concerns. Since 1936, our mission has been to test products, inform the public,
and protect consumers.