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

Press Center

Feb 12 2007

Schumer: Bush Economic Report Paints Rosy Picture; Ignores Impact of Trade Deficit, Low Saving Rate and High Health Care Costs

 SCHUMER: BUSH ECONOMIC REPORT PAINTS ROSY PICTURE; IGNORES IMPACT OF TRADE DEFICIT, LOW SAVING RATE AND HIGH HEALTH CARE COSTS
 
JEC Chairman: “We Need to Shift Focus So That Working Americans Start To Feel As Good About Our Changing Economy As Those at the Very Top Do”
 
Washington, D.C. – Sen. Charles E. Schumer, Chairman of the Joint Economic Committee, today released the following statement about the 2007 Economic Report of the President:
 
“We can’t just put on a happy face and cross our fingers that wages will grow, trade deficits will shrink, savings rates will rise, and health care costs will slow as this administration is doing. We need to shift focus so that working Americans start to feel as good about our changing economy as those at the very top do. Only then will we have the economy we need to help us maintain our global leadership.”
 
A preliminary Joint Economic Committee analysis of the key chapters of the Economic Report of the President report follows:
 
Bush Administration to American Workers: “Don’t Worry, Your Pay Will Catch Up to Your Productivity”
 
The Economic Report of the President presents an upbeat picture of our recent economic performance, implying that the problems which produced the most protracted jobs slump since the 1930s, sluggish real wage growth, and widening inequality are now behind us. Buried in the Report, however, is an acknowledgement that negative personal saving and government budget deficits have produced a very low net national saving rate and that the share of employee compensation (wages and benefits) in national income has fallen while the share of profits is at an all-time high. The Report argues that these problems will right themselves, but the President’s policies do nothing to encourage more national saving or to see that the benefits of economic growth are spread more widely.
 
Bush Administration Continues to Ignore Record Trade Deficits, Disruptions Faced by American Workers
 
The Economic Report of the President does not address the trade deficit, which is expected to surpass 2005’s record $717 billion for 2006. Rather, there is a chapter on “International Trade and Investment” emphasizing the advantages of open trade and investment. The chapter merely pays lip service to the disruptions and dislocations that can take place in the short run and the anxiety and sense of insecurity that many Americans feel in the face of growing international competition.
 
The Report argues for the importance of renewing Trade Promotion Authority and successfully completing the current round of trade talks. It does not talk about the kinds of policies that will be necessary to reassure the average American family that it can expect to share in the benefits of more open international markets.
 
Bush Administration Wants Individuals, States and Health Care Providers to Cover the Tab for Rising Health Care Costs
 
In the report, the President’s advisors justify the health care proposals he unveiled in the State of the Union Address and the budget—a health insurance deduction that replaces the traditional employer-sponsored insurance deduction, and $101.5 billion in reduced spending on Medicare and Medicaid (over five years). Neither policy initiative gets at the root of today’s health care crisis – rapidly escalating costs. Since 2000, health care premiums have risen 87 percent, five times the rate of inflation. Instead, the administration’s reforms would pass the tab of rising costs on to individuals, states, and health care providers:
 
• The proposed health insurance deduction would weaken traditional employer sponsored health insurance, which benefits 175 million Americans, by extending the current tax incentive for such group coverage to coverage in the more costly (and risky) individual market. The plan would likely encourage more employers to drop coverage, throwing more people into the individual market before necessary reforms of that market are in place.
 
• Instead of reducing over-payments to private managed care plans that enroll Medicare beneficiaries in order to curb costs, the administration has budgeted $75 billion in reduced payments to Medicare, largely achieved by cutting reimbursements to health care providers like hospitals and nursing homes which are already running at low operating margins. The administration also plans to cut $26 billion from Medicaid largely by lowering federal matching funds, which will force states to absorb the cost burden.
 
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.
 

Feb 02 2007

Schumer Responds to Jobs Numbers

SCHUMER, NEW JOINT ECONOMIC COMMITTEE CHAIRMAN, RESPONDS TO WEAKER THAN EXPECTED JOB GROWTH AND HIGHER UNEMPLOYMENT

JEC Chairman: Today’s Job Numbers Tell Us That We Have a Long Way to Go Before American Families Can Make Up for Lost Ground
 
Bush Is Tied With His Father for Worst Job Creation Record of Any President since Hoover
 
Schumer: “Economy is Creating Jobs, but Certainly Not Enough to Reduce Middle-Class Anxiety”

Washington, D.C. – According to today’s Bureau of Labor Statistics report on the January Employment Situation, job growth slowed as employers added only 111,000 jobs in January while unemployment edged up to 4.6 percent, a sign that the labor market may be cooling.
 
Sen. Charles E. Schumer, Chairman of the Joint Economic Committee, today released the following statement about the January employment numbers:
 
"The American economy is creating jobs, but certainly not enough to reduce middle-class anxiety. We still have a long way to go before American families make up the economic ground they've lost over the last six years. We need to refocus our policies to create more and better jobs with better pay to help middle-class Americans in this uncertain economic environment."
– Sen. Charles E. Schumer, Chairman of the Joint Economic Committee
 
January’s Report in Perspective
 
• With technical data revisions and the job growth in January, President Bush is now in a virtual tie with his father for the dubious honor of having the worst job creation record of any President since Hoover.
• Growth in payroll employment has been modest by the standards of past economic recoveries and has averaged just 66,000 jobs per month over the Bush Presidency. Job creation under President Clinton averaged 237,000 jobs per month.
• January’s 4.6 percent unemployment rate remains higher than the 4 percent rate achieved in the expansion of the 1990s.
• Under President Bush, 3 million manufacturing jobs have been lost.
• Workers’ productivity (output per hour) has increased 18 percent since the beginning of 2001 while workers’ real (inflation-adjusted) average hourly compensation (wages plus benefits) has increased just a little over 7 percent.
• Increases in health care premiums have increased benefit costs resulting in even slower growth in real wages.


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

Jan 25 2007

New Joint Economic Committee Report Highlights Critical Flaws of Bush Health Care Proposal

NEW JOINT ECONOMIC COMMITTEE REPORT HIGHLIGHTS CRITICAL FLAWS OF BUSH HEALTH CARE PROPOSAL
 
Report Concludes President’s New Health Insurance Proposal Would Impose New Tax On Many Middle Class Families – Especially High-Cost Insurance Markets Like New York
 
Plus, President Calling For Elimination Of Billions Of Federal Dollars For Public Hospitals Without Any Guarantee That Insurance Companies Will Fill In The Gap
 
Schumer: “The President’s Proposal Is All Risk And No Reward – This Is Bad Policy For The Middle Class, Budget-Strapped States And The 47 Million Uninsured Americans”

Washington, D.C. – U.S. Senator Charles E. Schumer (D-NY) today released a new Joint Economic Committee report showing that the new health care proposal from the Bush Administration, which claims to help more Americans afford their own insurance, is instead more likely to weaken the nation’s health care system.  The Joint Economic Committee report concludes the President’s health insurance policy would not help the vast majority of the 47 million uninsured Americans, would not address skyrocketing healthcare costs, would impose a new health tax on middle class families and would add to the budget deficit.

“The President’s healthcare proposal is all risk and no reward – this is bad policy for the middle class, budget-strapped states and the 47 million uninsured Americans,” said Sen. Charles E. Schumer (D-NY), Chairman of the Joint Economic Committee.  “It’s hard enough to obtain good health care coverage in this country without penalizing those who have it, but that is exactly what this plan does. The President should work with Congress to craft health care policies that will reduce the number of uninsured and cut health care costs, without asking middle class families to pay more than they already do.”
 
Today’s report shows that the Bush health care proposal would fail to meaningfully reduce the number of uninsured Americans while increasing costs for many middle class families.  Furthermore, the Administration’s policy would undermine the country’s most reliable source of health care coverage—the employer-sponsored system—and put more and more people into the individual market where the risks are much greater. Rather than promoting growth of the individual insurance market at the expense of employer-sponsored plans, the administration’s first priorities should be structuring reform efforts to help the uninsured acquire health care and reducing overall health care spending.  Until we have workable policy solutions that will accomplish these goals, the administration should refrain from introducing more risk into an already too risky system.

In another piece of his new health care proposal, the President is calling for the elimination of billions of federal dollars to hospitals that care for a high percentage of uninsured patients, without guaranteeing that insurance companies will fill the gap.   The President's proposal aims to shift federal dollars from hospitals that are currently caring for the uninsured to states that want to find new ways to decrease the number of uninsured. While not all states may choose to participate, or be successful, in experiments to reduce the uninsured, all hospitals would be subject to the funding cuts.
 
Link to JEC report: https://www.jec.senate.gov/Documents/Reports/bushhealthcareproposal.pdf

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

Jan 17 2007

New Joint Economic Committee Report Reveals: Oil and Gas Royalty Relief Yields No Economic Benefit

NEW JOINT ECONOMIC COMMITTEE REPORT
REVEALS: OIL AND GAS ROYALTY RELIEF
YIELDS NO ECONOMIC BENEFIT
 
Report’s Startling Conclusion – Billions Of Taxpayer Giveaways
Produce Virtually No Oil
 
JEC Chairman Announces New Push To Eliminate All Royalty Relief For Oil And Gas Companies
 
Schumer: “Taxpayers Get No Bang For Their Billions Of Giveaways To Big Oil”
 
Washington, D.C. – U.S. Senator Charles E. Schumer today released a new Joint Economic Committee report showing that, despite costing taxpayers tens of billions of dollars, oil and gas royalty relief does not reduce U.S. dependence on foreign oil, create net new jobs, or lower energy prices for consumers.
On the eve of a Senate Energy Committee hearing on oil and gas royalty collection and enforcement, Senator Schumer announced plans to push for the elimination of royalty relief for oil and gas companies.
 
“American taxpayers get no bang for their billions of giveaways to wealthy oil companies,” said Sen. Charles E. Schumer (D-NY), Chairman of the Joint Economic Committee. “This report proves what we've suspected for so long, that oil company giveaways do little to reduce energy prices for consumers. Instead of supporting royalty relief that is only effective in boosting oil company’s record profits, the Bush administration should focus on policies that will directly reduce our
dependence on foreign oil sources, like energy efficiency and alternative fuels.”

The justification for royalty relief and other special subsidies for oil and gas companies rests on the arguments that they will increase domestic oil and gas production and lessen our dependence on foreign oil, promote employment and economic growth, and hold down energy prices for consumers. The JEC report finds no solid evidence to support any of these arguments.
 
Highlights from the report include the following:
 
• Royalty relief for oil and gas companies could cost taxpayers up to $80 billion
without increasing our domestic supply of energy.
• Shifting the tens of billions of taxpayer dollars lost on royalty relief and other tax
incentives for oil and gas production to demand-side policies like conservation or
renewable energy would give taxpayers more “bang for their buck” in terms of
energy security.
• Royalty relief has not led to the creation of net new jobs or the lowering of
consumers’ energy prices.
 
 “It’s important to expose the mismanagement and faulty implementation of this program, but the logical conclusion from this report is that we need to get rid of the royalty relief itself,” said Senator Schumer. “It’s time to stop helping oil companies and start achieving energy independence.”
 
Link to JEC report: https://www.jec.senate.gov/democrats/Documents/Reports/royaltyrelief.pdf
 
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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Jan 10 2007

As U.S. Heads Toward 5th Record Trade Deficit, Chair of Joint Economic Committee Calls on Administration to Put New Pressures on China

AS U.S. HEADS TOWARD 5th RECORD TRADE DEFICIT, CHAIR OF JOINT ECONOMIC COMMITTEE CALLS ON ADMINISTRATION TO PUT NEW PRESSURES ON CHINA

Administration’s Delegation Returned from China in December Without Much In Hand

JEC Plans Hearings on China Currency Manipulation, U.S. China Trade Policy –Will Bring Treasury Officials Before Committee

Schumer: 30 Percent of 2006 Trade Gap Stems from Deficit with China

Washington, D.C. – Although the U.S. trade deficit narrowed slightly to $58.2 billion in November, $22.9 billion of that gap stemmed from the deficit with China, according to a Joint Economic Committee analysis of Commerce Department data. Despite the narrowing, both the overall deficit and the deficit with China remain at historically high levels.

“Our trade deficit is still out of control,” said Sen. Charles E. Schumer (D-NY), incoming Chairman of the Joint Economic Committee. “Unless the administration takes action to end China’s unfair currency manipulation, we will continue to see the problem get worse. It is time to take a hard line with Beijing on its undervalued currency, so that American producers can compete with Chinese producers on a level playing field.”

Schumer plans to hold hearings to investigate policy responses to the growing trade deficit with China and manipulation of the yuan. The U.S. trade deficit is on pace to set a record level for the fifth year in a row. Over the first 11 months of 2006 the deficit was $702 billion, which is on track to surpass the record deficit of $717 billion set for all of 2005. The largest single contributor to the 11-month cumulative trade deficit was the $214 billion goods deficit with China (See chart). For all of 2005, the goods deficit with China was $202 billion. The U.S. trade deficit with China in the past two years is larger than the total U.S. trade gap of just seven years ago.

Treasury Secretary Henry Paulson led a high-level U.S. delegation to Beijing last month for two days of talks aimed at resolving long-standing trade problems. There were no breakthroughs on the biggest issues such as complaints that China is manipulating the value of its currency to gain trade advantages. Another meeting is scheduled for May in Washington, D.C.

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