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Joint Economic Committee Democrats Chairman - Senator Martin Heinrich (D-NM)

Press Center

Apr 14 2008

JEC Report Shows Extending Bush Tax Cuts Won’t Stimulate Economy or Benefit Most American Families

JEC REPORT SHOWS EXTENDING BUSH TAX CUTS WON’T STIMULATE ECONOMY OR BENEFIT MOST AMERICAN FAMILIES

Unpaid for Tax Cuts Disproportionally Benefit Top 1% of Households Are 100 Times Bigger than Cuts for Middle Class Families and Leave Massive Budget Deficits for Future Generations

During Recession, Discussion Should Focus on Broadly Helping Middle Income Families Immediately, Not Bigger Future Tax Breaks for the Wealthy

Washington, D.C. – Senator Charles E. Schumer, Chairman of the Joint Economic Committee (JEC), and Rep. Carolyn B. Maloney, Vice Chair of the JEC, released a report showing that the Bush tax cuts have not benefitted middle income families and have saddled future generations with tremendous debt.  The Bush tax cuts, which disproportionately benefit the top one percent of households, were initially justified with a series of dubious claims about their economic effectiveness.  But the JEC paper, entitled Extending the Bush Tax Cuts Is the Wrong Way to Stimulate the Economy, shows that the President’s tax policy has done little to stimulate the economy and guard against recession.  The Bush tax cuts have had a negligible or negative impact on annual income growth for the vast majority of U.S. households. 

“While the economy is running on fumes and Americans are losing their jobs, the first and last words out of this administration on economic policy are tax cuts.  Over the last seven years, the Bush tax cuts have benefitted very few at the expense of millions of middle and low income families and future generations.  For the last seven years, the President has had his cake and gotten to eat it too – tax cuts for the top one percent paid for with borrowed money,” Schumer said.  “Democrats want to extend targeted tax relief to the middle class, but permanently extending the Bush tax cuts is not in the cards.”

“The evidence is crystal clear: extending Bush’s tax cuts is the wrong way to stimulate our troubled economy,” Maloney said. “The Bush administration claimed that their tax cuts would drive investment, creating growth in wages and employment, but instead economic performance has been lackluster at best. To make matters worse, the President has mortgaged our children’s future by funding the tax cuts using borrowed money. Democrats in Congress want to target tax relief to families who have not shared in the gains from the Bush economy and are now struggling to make ends meet in the face of an economic downturn. Our plan extends middle-income tax breaks, including the child tax credit and relief from the marriage penalty and the Alternative Minimum Tax.  I hope the President will join us in focusing on measures that would have a real impact on propelling us out of this recession: extending unemployment benefits and stemming the mortgage crisis to keep people in their homes.”

Facts about the Bush tax cuts:
• Through 2008, the government has borrowed $1.6 trillion to pay for the Bush tax cuts.
• Even the Chairman of the President’s Council of Economic Advisors said he “would not claim that tax cuts pay for themselves.”
• In 2007, one third of the total benefits of the tax cuts went to the top one percent of households.
• Approximately 20 percent of total benefits went to 0.3 percent of households earning $1 million or more per year. These households received an average tax cut 103 times larger than that of middle-income households.
• Investment and economic growth since the 2001 and 2003 tax cuts have been lower than average, indicating that the tax cuts have not had strong economic effects.

If the Bush tax cuts were made permanent:
• It would cost the federal government an additional $3.4 Trillion over the next decade, if the funds were borrowed.
• It would cost the government three times more than the amount necessary to close the Social Security funding gap through 2075.

The President’s tax cuts may actually end up reducing low and middle class incomes:
• These tax cuts are financed with borrowed money – a loan from future generations to today’s taxpayers. Depending on how this loan is repaid, the net effect of fully-funded tax cuts would likely reduce most middle class incomes.
• Administration estimates of the long-term impacts of the tax cuts assume that in the long run, tax cuts will eventually be paid for through large cuts in government spending. Unlike the tax cuts, Federal spending provides more income to the middle class than the wealthy.
• If this tax cut-related debt is repaid by across-the-board spending cuts, the after tax income for 75 percent of American households will be reduced. 

The paper can be found here.

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.
www.jec.senate.gov

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Apr 10 2008

Coast to Coast, Declining Home Prices and Rising Foreclosures Will Cost U.S. Families Over $2.6 Trillion

COAST TO COAST, DECLINING HOME PRICES AND RISING FORECLOSURES WILL COST U.S. FAMILIES OVER $2.6 TRILLION

As Senate Passes Legislation to Address the Housing Crisis and White House Threatens Veto, Analysis by Joint Economic Committee Shows Steep and Ongoing Costs of Housing Crisis  

Washington, D.C. – While the White House has threatened to veto a number of housing bills being debated in Congress, including the recently passed Senate housing bill intended to aid families who are in danger of losing their homes, Senator Charles E. Schumer, Chairman of the Joint Economic Committee (JEC), released reports showing that the bursting housing bubble could cost over $2.6 TRILLION in household wealth from record numbers of subprime foreclosures and falling home prices.

The state-by-state report was prepared by the majority staff of the Joint Economic Committee and shows that nationally, home prices will decline over 11% from 2007-2009 and families in a majority of states will lose over $2.6 Trillion in housing wealth in that same period.  Moreover, an additional 1.2 million families who took out subprime mortgages stand to lose their homes to foreclosure in 2008 and 2009 alone. 

Schumer said, “The White House continues to ignore the 800 pound gorilla in the room – the nation’s foreclosure and housing crisis is the central cause of this recession; and unless we address it quickly, millions of American families will continue to see their economic fortunes decline.  Families stand to lose over $2.6 trillion in housing wealth and in many cases and another 1.2 million families will likely lose their homes.”

The state by state charts can be found at www.jec.senate.gov.

 

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.

www.jec.senate.gov

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Apr 08 2008

JEC Report Reveals Extension of Unemployment Insurance Would Ease Pain of Unemployment, Recession

JEC REPORT REVEALS QUICK EXTENSION OF UNEMPLOYMENT INSURANCE WOULD EASE PAIN OF RISING UNEMPLOYMENT AND RECESSION

Unemployment Benefits Critical in Helping Families Deal with Three Consecutive Months of Job Losses and 300,000 Total Lost Jobs Since November 2007

Evidence Shows Extension of UI is Prudent Given Previous Economic Circumstances Under Which Benefit Was Extended to the Unemployed

Washington, D.C. – The Joint Economic Committee (JEC), chaired by Sen. Charles E. Schumer, released a report today, requested by Vice Chair Rep. Carolyn B. Maloney, calling for the extension of unemployment insurance benefits to combat the contracting labor market.  Friday’s release of the Bureau of Labor Statistics Employment Situation Report revealed an jump in the unemployment rate and the third consecutive month of job losses for the first time in five years.  With the number of UI beneficiaries exhausting their claims already on the rise and no end in sight to the current economic downturn, the report argues that past Republican obstructionism must be overcome in order to provide extended UI benefits for those in need.

“Labor market conditions are already as bad as or worse than when unemployment insurance benefits were extended in previous recessions, so there is no reason to wait to provide additional benefits to unemployed workers now.  Workers eligible for these benefits lost their jobs through no fault of their own - their plant closed or their employer went out of business because of deepening economic troubles.  Extending unemployment benefits would help families continue spending on basic living expenses and simultaneously provide an extra boost to our weakening economy,” Maloney said.

Schumer stated, “This administration has been whistling a happy tune while jobs have disappeared, home prices have plummeted, and the entire economy is teetering on the brink of recession.  Economists agree that extending unemployment insurance benefits gets the biggest economic bang for the buck in helping workers and their families weather this financial storm.  The bottom line of today’s paper is that extending unemployment insurance is critical and it is long-passed due.” 
 
Evidence is mounting that the employment picture is worse than when Unemployment Insurance (UI) was extended during previous recessions:
• Long-term unemployment is at recession levels and already higher than when Congress extended UI benefits in the 2001 and 1990-91 recessions.
• 1.3 million workers have been out of work and searching for a new job for at least six months.
• Unemployed individuals claiming UI benefits recently rose above 400,000 per week, a level at which economists typically consider the labor market to be in a recession.
• The share of the U.S. population with a job never fully recovered from the 2001 recession and is lower now than it was last time UI benefits were extended.
• The share and number of UI beneficiaries exhausting their benefits is higher than at the beginning of the 2001 and 1990-91 recessions. 
• More than one-in-three unemployed workers (35.6 percent) exhausted their UI benefits last quarter.
• Over 1.3 million workers will exhaust their UI benefits between January and June 2008.
• 10 states and the District of Columbia have exhaustion rates higher than 40 percent (FL, NJ, CA, NE, AZ, NM, NC, CO, LA and IN).

The JEC’s paper suggests three specific ways to expand unemployment insurance:
• Provide extended benefits to workers whose regular unemployment compensation has expired;
• Supplement the amount of benefits paid to unemployment compensation recipients; and
• Modernize the UI system to cover more unemployed workers, including more part-time and low-wage workers.

“I applaud Speaker Pelosi and Majority Leader Reid for proposing additional measures to strengthen our economy, and for urging the President to work with Congress to build on the stimulus plan.  We need to come together to solve our nation’s serious economic challenges.  With so many Americans now struggling to find work and get back on their feet, extending unemployment benefits should be a top priority,” Maloney concluded.

The report can be found here.

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.
www.jec.senate.gov

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Mar 31 2008

Schumer on Paulson Plan and Jackson Resignation

SCHUMER ON PAULSON PLAN AND JACKSON RESIGNATION

U.S. Senator Charles E. Schumer released statements on Monday regarding Secretary Paulson's announced blueprint for overhauling the U.S. financial regulatory system and the resignation of Housing and Urban Development Secretary Alphonso Jackson:

Schumer on Paulson's Plan:
"This blueprint is a good foundation for updating the regulation of U.S. financial markets. Secretary Paulson is right that unifying our regulatory system is necessary in order to operate more intelligently and efficiently in the globalized financial system. If anything, the Treasury plan does not consolidate redundant agencies enough and a single regulator may be a better approach.  
 
"But certain important pieces are not included in Secretary Paulson's plan. And I strongly disagree with the Treasury Secretary when he says the current regulatory framework is not at fault for the unrest troubling our economy. The unregulated corners of our economy did much to contribute to the meltdown in our housing market and the accompanying spillover to our financial markets. The havoc wrought by independent mortgage brokers, who fueled the housing bubble, and credit ratings agencies, who rubber-stamped securities with no questions asked, certainly fueled the economic crisis we have now. The Administration's 'deregulation-above-all-else' attitude helped cause the problems we now face.
 
"If we focus only on consolidation -- and don't also adopt a careful, but more pro-regulation, approach -- then we will have approached this modernizing task with too much of a pre-Bear Stearns mindset."
 
Schumer on Jackson resignation:
“While he’ll have to work out his problems, I appreciate the hard work Secretary Jackson has put into the fight to save affordable housing in New York."  
 

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.

www.jec.senate.gov
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Mar 28 2008

Joint Economic Committee to Hold Employment Hearing on Release of New March Jobs Report

MEDIA ADVISORY:


JOINT ECONOMIC COMMITTEE TO HOLD EMPLOYMENT HEARING ON RELEASE OF NEW MARCH JOBS REPORT
 
JEC to Address New Jobs Report from Bureau of Labor Statistics in Light of Further Deterioration of Economy and Likely Recession


Washington, D.C. – U.S. Senator Charles E. Schumer and Representative Carolyn Maloney, Chairman and Vice-Chair of the Joint Economic Committee (JEC) respectively, will hold a hearing on the newly released Bureau of Labor Statistics’ (BLS) monthly employment figures with Commissioner Keith Hall on Friday, April 4, 2008 at 9:30 am in the Dirksen Senate Office Building, Room 106.  Representative Baron Hill (D-IN) will preside over the hearing, entitled “The Employment Situation in March 2008.”  In the wake of continued declines in home prices and intensifying credit crisis spreading from Wall Street to Main Street, Dr. Hall will assess recent developments within the labor market.


          WHAT:    Joint Economic Committee Hearing on “The Employment Situation in March 2008”
          WHO:      Dr. Keith Hall, Commissioner, Bureau of Labor Statistics              
          WHEN:    Friday, 9:30 a.m., April 4, 2008
          WHERE:  Dirksen Senate Office Building, Room 106


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.
www.jec.senate.gov
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Mar 25 2008

Schumer on Falling Home Prices and Consumer Confidence

SCHUMER ON FALLING HOME PRICES AND CONSUMER CONFIDENCE

 

Today new economic indicators show that the U.S. economy is continuing to falter and not only are home prices still sinking, but consumer confidence is following suit.  The S&P/Case-Shiller index reported the biggest drop in home prices, 11.4 percent in January, since the index was created in 1987, and continuing 19 consecutive months of home price declines.  Virtually no major metropolitan area was left unscathed according to the Case-Shiller analysis for January.  The Conference Board's measure of consumer confidence fell much more than expected as well, going down double digits from February to March. 

 

Senator Charles E. Schumer, Chairman of the Joint Economic Committee reacted with the following statement about today's weak economic news:

 

"Newfound weakness in consumer confidence is partially the result of 19 months of falling home prices in nearly every single corner of the United States .  For the last year, the President and his Republican allies in Congress have chosen a hands-off, Hoover-like posture towards this housing crisis.  It is long passed time for Washington to act.  Democrats in the Senate will have a modest and targeted housing recovery bill on the floor next week and we hope the White House will work with us to pass it quickly. 

 

“We hope President Bush stops whistling a happy tune about this economy while homeowners and consumers across the country are singing the blues."

 

Sen. Schumer will be holding a JEC hearing with Federal Reserve Chairman, Ben Bernanke, on April 2 - details can be found at www.jec.senate.gov.

 

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.

 

www.jec.senate.gov

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Mar 19 2008

On Fifth Anniversary of the Iraq War, Schumer & Maloney Call on Bush to Acount for Economic and Budget Costs

 
ON FIFTH ANNIVERSARY OF THE IRAQ WAR,
SCHUMER & MALONEY CALL ON PRESIDENT BUSH TO ACCOUNT FOR PAST, PRESENT AND FUTURE ECONOMIC AND BUDGET COSTS
 
Joint Economic Committee Leadership Urges the President to Send Administration Official to Testify at Upcoming Hearing
 
President’s Belittling of Economic Experts’ Estimates of War Costs Should Increase Burden of Administration to Fully Disclose Tremendous War Costs
 
Washington, D.C. – Today, the fifth anniversary of the start of the war in Iraq, Senator Charles E. Schumer and Representative Carolyn B. Maloney, Chairman and Vice-Chair of the Joint Economic Committee respectively, sent a letter to President Bush urging him to give a full account of the total costs of the war.  Schumer and Maloney called for a productive debate over the economic impact of the war; and they asked the President to make a member of his administration available in the coming weeks to testify at a hearing of the Joint Economic Committee to provide Congress and the American people with a “better understanding of the current and future budgetary and economic costs of the war in Iraq.”
 
Referencing the President’s comments today on the “exaggerated estimates of the costs of this war” and claim that “war critics can no longer credibly argue that we are losing in Iraq, so now they argue the war costs too much,” Schumer and Maloney cited the administration’s initial estimates, between $50 and $100 billion, and failure of the administration to offer a full accounting of the war costs to our budget and economy. 
 
A copy of the letter appears below:
 
March 19, 2008
 
President George W. Bush
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500
 
Dear Mr. President:
 
Today, on the fifth anniversary of the start of the war in Iraq, we recognize the tremendous efforts of our troops and we are grateful for their service to our country and the sacrifices they and their families have made. Despite our troops’ best efforts in Iraq, there is little progress in setting up an independent government, there is no plan to redeploy our troops, and there has been no indication by your administration of the future commitment and costs to our nation. The American people deserve a full accounting of what the war has cost in terms of lives, our reputation abroad, and our economy; and they especially deserve to know the future costs of your Administration’s preferred Iraq strategy going forward.
 
Today, you marked the fifth anniversary of the Iraq war by deriding the "exaggerated estimates of the costs of this war," and suggesting that "war critics can no longer credibly argue that we are losing in Iraq, so now they argue the war costs too much.”  Your administration’s initial estimates before the war began were between $50 and $100 billion, far less than the actual or projected costs thus far.  To date, there has been no accounting by your administration of the wars costs to our budget and economy. 
Last year, the Joint Economic Committee prepared a report showing that if your Administration's 2008 funding request is approved, the full economic cost of the war will total $1.3 trillion just by the end of the year. This figure includes the “hidden costs” of deficit financing, the future care of our wounded veterans, and disruption in oil markets. And if the war continues, the costs will only mount higher. In his new book, Professor Joseph Stiglitz estimates that the total economic price tag for the war could reach $3 trillion to $5 trillion over the next decade if we remain in Iraq. That is above and beyond what we've already spent on the war, and it is money that will continue to be diverted from important national priorities.
Your administration has questioned the patriotism and intellectual integrity of those providing war cost estimates.  We can have a debate about the legitimate costs of this war, and there may be disagreements, but no one’s patriotism or integrity should be maligned. A productive debate over the long-term economic impact of the war and its cost to future generations is long overdue.
 
We have respectfully written to your Office of Management and Budget Director, Jim Nussle, to provide our committee with the Administration’s costs estimates for the war, but have not received a response.  We are urging you to make a member of your administration available in the coming weeks to testify at a hearing of the Joint Economic Committee to provide the Congress and the public a better understanding of the current and future budgetary and economic costs of the war in Iraq. 
 
Sincerely,
 
Senator Charles E. Schumer                                          
Chairman                                                                            
Joint Economic Committee     
 
 
 
Representative Carolyn B. Maloney  
Vice-Chair
Joint Economic Committee
 
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.
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Mar 18 2008

Schumer on the Iraq War's 5th Anniversary and It's Backbreaking Costs

SCHUMER ON THE IRAQ WAR'S 5th ANNIVERSARY
AND ITS BACKBREAKING COSTS

 

On the fifth anniversary of the Iraq War, U.S. Sen. Charles E. Schumer, Chairman of the Joint Economic Committee, released the following statement praising the troops and questioning the enormous costs of the war to our budget and overall economy:

 
"On the fifth anniversary of the start of the Iraq War, this Administration still has no clear exit strategy for our troops, no path to political reconciliation, and no accounting of the costs to our budget or economy.
 
"Despite the good work of our troops, the American people are baffled by the lack of political progress. The case against the war in Iraq has been building for a long time. Too many young American men and women have given their lives, or have suffered terrible, life-altering injuries, with little to show for their sacrifice.
 
"And now, Americans are trying to comprehend the eye-popping dollar figures that this war is costing our budget and our economy. The tremendous cost of this war to families, the federal budget, and the whole economy has become the $800 billion issue the administration refuses to talk about. 
 
"For the amount the Bush Administration wants to spend PER DAY in Iraq, over $430 million we could: put an additional 8,900 police officers on the streets per year; provide health insurance for 329,200 low-income children through CHIP per year; hire another 10,700 Border patrol agents per year; make college more affordable for 163,700 students through Pell Grants per year; and help nearly 260,000 American families to keep their homes with foreclosure prevention counseling this year." - Sen. Charles E. Schumer
 
The Joint Economic Committee issued a report on the costs of the war in Iraq last November and also held the first hearing of 2008 into the economic costs of the Iraq War in February.  You can find the witness testimonies, statements, webcast, and charts by linking to the JEC Hearing on Iraq War Costs.
 
The Joint Economic Committee Cost of War Report (11/2007) also reveals estimates for the war's hidden costs.  The JEC's economic cost estimates were dwarfed by a recent book from Nobel Laureate, Professor Joseph Stiglitz, who testified at our hearing last month.  His book, "The Three Trillion Dollar War," estimates that budgetary costs alone could be up to $3 trillion and larger economic costs could reach $5 trillion.
 

 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.
www.jec.senate.gov

Mar 14 2008

Federal Reserve Chairman Bernanke To Testify At Joint Economic Committee On The U.S. Economic Outlook

MEDIA ADVISORY:

FEDERAL RESERVE CHAIRMAN BERNANKE TO TESTIFY AT JOINT ECONOMIC COMMITTEE ON THE U.S. ECONOMIC OUTLOOK

 JEC Hearing Will Be Fed Chair’s First Congressional Testimony Since March FOMC Meeting and Recent Decision to Inject $200 Billion into Credit Markets
 
Schumer Invited Bernanke for His Views on Looming Recession, Spreading Credit and Housing Crisis, Declining Dollar, and Overall U.S. Economic Health 
 
Washington, D.C. – U.S. Senator Charles E. Schumer, Chairman of the Joint Economic Committee (JEC), will hold a hearing on the Economic Outlook for the United States with Chairman of the Board of Governors of the Federal Reserve System, Ben Bernanke, on April 2, 2008 at 9:30 am in  Room 106  of the Dirksen Senate Office Building.  Chairman Bernanke will provide his first Congressional testimony following the March Federal Open Market Committee (FOMC) meeting and recent announcement that the Fed will inject $200 billion into the credit market.  While a key question is whether the U.S. is already in a recession or heading into one, the JEC will explore additional measures to address this serious financial crisis.   
 
            WHAT:     Joint Economic Committee Hearing on “The Economic Outlook”
            WHO:       The Honorable Ben Bernanke
                              Chairman, Board of Governors of the Federal Reserve System
            WHEN:    9:30 a.m., Wednesday, April 2, 2008
            WHERE: 106 Dirksen Senate Office Building
 
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.

Mar 11 2008

Floor Statement of Sen. Charles E. Schumer Chairman During the Budget Debate

FLOOR STATEMENT OF SEN. CHARLES E. SCHUMER
Chairman, Joint Economic Committee
Humphrey Hawkins Budget Debate
March 11, 2008

Mr. President, today we are looking at an economy on the verge of a recession. The economic hits to middle class American families just keep on coming. Before I talk about the Democratic budget package, which is far superior to thePresident’s budget, I’d like to use this Humphrey Hawkins Act debate time, as the Chair of the Joint Economic Committee, to talk about the economy. In the last week alone, we have learned:

• We are experiencing record home foreclosures in the subprime and the prime mortgage markets from coast to coast. Every single state has been affected by an increase in foreclosures, according to an analysis by the Joint Economic Committee.

 • Home prices in every major market are falling, and families have historically low equity in their homes. Moody’s Economy.com estimates that 8.8 million homeowners—over 10% of all homeowners—by the end of this month – will owe more money than their homes are worth.

 • Just this past Friday, the Labor Department reported back to back months of job losses, with serious losses this past month in the manufacturing, construction, and retail sectors.

 • Today the Commerce Department released data showing rising trade deficits with China and oil-producing nations like Venezuela, and Saudi Arabia.

 • Americans are paying a record average of $3.22 per gallon of gas today.

 

 • And if that isn’t enough, oil is selling for over $110 per barrel – an all-time record.

 • As we put forward a more sensible budget plan for our country this year, we have to recognize the pressure on families has been made worse since President Bush took office. Over the last seven years, Americans have been squeezed by skyrocketing energy, health care and education costs:

 • Energy costs have ballooned 64.0 percent during Bush’s tenure.

 

 • A gallon of regular grade gasoline has increased almost 60 percent in real terms, up from $1.62 in January 2001. The average middle-class family is paying more JUST IN HIGHER GASOLINE PRICES than they received in Bush tax cuts.

 • There are 7.2 million more people uninsured since Bush took office in 2001, and the average cost of health insurance for families who do have it has increased nearly 40 percent since 2000.

 • Inflation-adjusted tuition for four-year public colleges increased 36.3 percent between the 1999-2000 and 2005-2006 school years to $5,526 per year.

 • In February 2008, 4.9 million people were working part-time for economic reasons but wanted full-time work, and the UNDER-employment rate is almost 9 percent, up 1.6 percentage points since 2001.

 • That’s 1.4 million fewer people with jobs since Bush took office.

 

 • The bottom line is that this administration is the owner of the worst jobs record since Herbert Hoover, and the last two months of losing nearly 90,000 jobs secures that unfortunate place in history.

 • The significant jobs losses in the manufacturing and construction sectors have continued since the housing market has been in trouble and doesn't seem to be getting better.

 • It isn’t a surprise to many economic experts that we are on the brink of recession oralready in one – although the administration has done an excellent job of hiding its head in the sand.

 • And the job losses in the retail sector are particularly troubling because it indicates that consumer spending, which has driven this economy, has alsodeclined measurably.

The president’s ‘hear no evil, see no evil’ policies on our economy simply do not work.

It is only a matter of time before consecutive months of job losses, falling home prices, rising energy prices, and cutbacks in consumer spending lead us to a fullblown recession. It is crystal clear to everyone, but the Bush Administration, that we are inevitably heading towards a recession.

 

 

For the last seven years we have been governed by a one-size-fits-all economic strategy guided solely by massive tax cuts. That strategy has produced burgeoning budget deficits, a serious global trade imbalance, and has brought us to the precipice of a recession.

This unmistakable economic downturn began early last year as the subprime mortgage mess unfolded. The spillover effects into the broader housing market, the credit markets, and the overall economy are tremendous.

According to the JEC’s conservative estimates, by 2009 at least 1.3 million foreclosures will occur as the riskiest subprime mortgages (the two- and three-year adjustable rate mortgages) reset over the course of this year and next. This will lead to the destruction of approximately $100 billion in housing wealth, including an estimated $71 billion in direct losses on foreclosed properties and a decline in the value of neighboring properties by an additional $32 billion.

And overall housing prices continue to fall, as seen in the almost 10 percent decline of the S&P/Case-Shiller national home price index since the first quarter of 2006.

Last week, the Federal Reserve released data showing that American families hold less equity in their houses than at any time since the Fed began tracking this data in 1945. Under the Bush Administration, the primary source of wealth for most Americans – the equity in their houses – dropped by nearly 10 percentage points, from a 57.8 percent equity stake when Bush took office to a current low of 47.9 percent.

Given that housing wealth totaled about $23 trillion in 2006, the decline in household balance sheets is now between one and two trillion dollars. Declines in house prices are likely to have significant negative effects on consumer spending and a host of other deleterious effects on the economy.

We are borrowing to pay for this war in Iraq as well. The economic cost of the Iraq War is truly staggering. According to Professor Joe Stiglitz, who testified at the JEC last month, the war could cost $3 Trillion, that TRILLION with a “T.” According to a report our committee did in November, the war will cost nearly $37,000 per household.

The federal government is increasingly reliant on the rest of the world to buy our public debt, and with a falling dollar and skyrocketing debt, who knows how much longer we can count on such financial largess from our trading partners.

President Bush turned huge budget surpluses into huge deficits in a few short years. In January 2001, the Congressional Budget Office (CBO) projected that from 2002 to 2011, those surpluses would total $5.6 trillion. In 2001, CBO’s projection was for a surplus of $573 billion in 2007. In reality, the deficit was $163 billion. That’s a turnaround of $736 billion, or more than $100 billion for every year that President Bush has been in office.

This remarkable turnaround in the budget picture shows a reckless disregard by the administration for living within our means and has frankly jeopardized the future economic success of families across the country.

He may have passed some big tax cuts for his well-off friends, but he has not been very compassionate to future generations, who will be paying the interest on this increased debt for generations to come.

The Democratic budget provides some measure of sanity and order to our budget priorities, and hopefully will put our country back on more solid economic footing.

I want to commend Senator Conrad for crafting a budget resolution that gets us started on the road to recovery from these misguided policies. There is much work to do, but we are off to a good start with this budget resolution.

One of the important things about Senator Conrad’s budget is that by restraining spending and making the right choices on long-term tax cuts, it provides room for important middle-class tax cuts to ease the middle-class squeeze, such as the tax cuts provided for in Senator Baucus’s amendment. These tax cuts are not a fix for what ails our economy in the long term, but they will help middle-class families make ends meet.

Senator Baucus’s amendment is broad-based tax relief targeted to the middle class, plain and simple. Everyone benefits, but the middle class gets most of the benefit. That’s how we ought to be providing tax relief in this country – not providing more and more tax breaks to the top one-tenth of one percent, whose incomes have shot into the stratosphere. Tax cuts for those that need them, not for those that won’t notice them.

If we look at the tax cuts that passed in 2001, we know which ones should be made permanent, and which ones shouldn’t. The $1,000 per child tax credit, marriage penalty relief, and the 10 percent bracket are all sensible tax cuts that can be made permanent with the surpluses provided for in the Conrad budget.

The Baucus amendment does some other sensible things as well. Across the country, parents are struggling to manage the crunch of work and family. According to a report issued by the JEC, full-time child care costs average about $7,300 per year in the United States, almost 20 percent of the median income of families with young children. The Baucus amendment will permanently extend the tax credit for child care expenses, again providing essential benefits for working families.

Senator Baucus’s amendment also includes provisions to offset the impact of rising local property taxes, an issue that I hear about from my constituents every week. And the amendment will make permanent the important military tax benefits that passed both the House and Senate last December. These benefits are particularly targeted towards our servicemen and women and their families. Given the multiple rotations many of our servicemen and women have endured, these tax relief provisions are supported by all and they are the least we can do.

I urge my colleagues to support the budget, and to support the Baucus amendment when it is offered. Mr. President, I yield the floor.