JOINT ECONOMIC COMMITTEE: PREDISENT'S ECONOMIC REPORT WRONGLY INSISTS ECONOMY IS SOUND, DESPITE SERIOUS WORRIES IN HOUSING, CREDIT, JOBS MARKET

President’s Report Predicts Higher than Expected GDP Growth, Admits to Higher Deficits, Suggests Housing Market Decline May Aid Growth in Other Sectors

Schumer and Maloney Urge a New Direction on Economic Policy to Help Middle Class Families

Washington, D.C. – Senator Charles E. Schumer and Representative Carolyn B. Maloney, the Chairman and Vice Chair of the Joint Economic Committee respectively, responded to the Economic Report of the President (ERP), delivered to Congress today. The report, authored by the President’s Council of Economic Advisers, summarizes the administration’s views on the state of the United States economy. The report reviews the last year of economic data and projects the economic health of our country in the future.

Sen. Schumer said, “Despite agreeing to a much-needed economic stimulus package, the President still seems to be looking at our economy with rose-colored glasses. The administration needs to recalibrate its overly-optimistic economic assumptions in order to seriously address the declining fortunes of the middle class families. The crisis in the housing and credit markets and the weakening jobs market should have been a wake up call for this administration to jump into action and shed its ideological blinders. This report indicates that the last year of the Bush presidency will be more of the same – more economic anxiety for American families and slower economic growth for the nation.”

“This year’s Economic Report of the President predictably examines many aspects of the economy, but also predictably fails to recognize the depth of the problems that American families face as the housing and labor markets weaken and the economy slows,” said Rep. Maloney. “The report predicts anemic job growth and rising unemployment, and provides little hope that wages will be able to outpace rising living expenses in the coming year. The President has worked with Congress to implement a stimulus plan to temporarily boost the economy, but he offers no proposal to bring lasting relief to the millions of Americans who are feeling the squeeze of high energy costs and falling real wages. The President’s rationale for making his tax cuts permanent lacks credibility as we teeter on the brink of an economic downturn. Middle- and lower-income families continue to pay the price for the President’s tax cuts and the costly war in Iraq, as programs that help ordinary Americans cope with economic or health care insecurity have become candidates for budget cutting. The Bush economy simply continues to leave behind most American families.”

The Joint Economic Committee, established under the Employment Act of 1946, was created by Congress to review economic conditions and to analyze the effectiveness of economic policy.