CHAMPAIGN, Ill. - The debt-saddled U.S. government doesn't have to just give away billions of taxpayer dollars that will help struggling homeowners stave off foreclosure, according to a new study by a University of Illinois law and labor expert.
Michael LeRoy says the roughly 9 million homeowners whose mortgages will be trimmed could be required to repay at least part of the government aid through public service work instead of getting a free ride.
The U.S. has a long history of mandating public service in exchange for government assistance, and legal challenges have almost always failed, including claims that the programs violate constitutional protection against involuntary servitude, said LeRoy, a professor of law and of labor and employment relations.
"The large body of case law in my research shows that others have paid a literal or metaphorical debt to society by performing mandatory public service," he said. "As government debt-relief programs continue to evolve, a public service requirement is a viable legal option that policymakers should consider."
LeRoy says the study rose from inequities between the mortgage-relief plan and the tougher terms imposed by other government programs, such as corporate bailouts that cap executive pay and welfare programs that require recipients to either hold jobs or perform community service work.
"As the U.S. has funded bailouts for once-rich corporations or aid for the poor, it has required reciprocation in the form of sacrifice and additional effort by recipients," he said. "But this transfer of $50 billion to middle-class homeowners requires nothing more than filling out forms and meeting eligibility requirements."
LeRoy says the contrast unfairly favors the affluent, providing no-cost debt reduction for property owners while aid comes with strings attached for programs targeting lower-income Americans such as welfare and unemployment, which obligates recipients to seek and accept work.
Mandated public service programs in the U.S. date back to the 1780s, when state and county governments required able-bodied men to help on road projects without pay several days a year or face fines and imprisonment, according to the study.
Others followed, including the shift from welfare to "workfare" and programs that paid medical school tuition in exchange for a commitment to work in areas where health-care services were in short supply.
Programs carried stiff penalties to compel community service work, such as fines, jail time or, in the case of doctors, tripling their educational debt and increasing interest rates.
The study says those programs have generally withstood challenges on numerous legal grounds, including arguments that mandated public service violates the Thirteenth Amendment, which abolished slavery and outlawed involuntary servitude.
Courts have historically maintained a narrow interpretation of involuntary servitude, and the U.S. Supreme Court has not broadened the definition beyond congressionally authorized cases such as sex trafficking and illegal immigrants who are held against their will in highly confined work settings, according to the study.
"Judges have upheld community service mandates for high school graduation," LeRoy said. "The current view is that community service can be compelled if the obligation is limited and for a valid public purpose."
He says requiring public service in exchange for mortgage relief also would draw loosely from Depression-era programs such as the Civilian Conservation Corps, as well as Jewish law that mandates unconditional debt forgiveness every sabbatical year to ward off societal rifts by eliminating a major power source of the elite - debts owed to them.
"The housing subsidy is most akin to the Jewish concept of debt forgiveness," LeRoy said. "It's a charitable principle that assumes the debtor cannot meet his obligation, and further assumes that a fresh start for the debtor is good for society."