SEARCH
Economic Stimulus Bill Leaves Millions Out in the Cold |
|
The economic stimulus package approved last night by the U.S. House of Representatives—leaves the jobless “pretty much on their own,” says AFL-CIO President John Sweeney.
Workers who have been laid off because of the slowing economy will not get an extension of unemployment benefits. Families who can’t pay the skyrocketing costs of fuel will be left literally in the cold. The very people who need help the most will get what they have routinely gotten from this administration and its right-wing Republican supporters: a whole lot of nothing.
On Wednesday, Senate Republicans filibustered a version of the stimulus package that included an extension of unemployment insurance (UI) benefits to jobless workers who exhaust their benefits—some 200,000 workers a month run out of UI before finding a job. That bill also contained home heating assistance for low-income families. Yesterday, Senate Democrats gave up on their bid to include the jobless benefits and heating assistance.
After extending tax rebates to low-income seniors and disabled veterans, the Senate approved the House-passed version of the bill. The expansion of tax rebates to seniors and veterans in the bill meant the House needed to vote again and it approved the bill a few hours later. President Bush, who had hinted at a veto if the package contained extended jobless benefits, says he will sign this version.
More and more workers are losing their jobs and running out of benefits, and Sweeney says that trend is continuing as a U.S. Department of Labor report issued last week made clear:
the economy shed jobs for the first time in four years and unemployment claims spiked to the highest level since the aftermath of Hurricane Katrina.
The irony is that these items were cruelly left out of what is supposedly a package designed to stimulate the economy, which is suffering from nearly eight years of Republican ideology masquerading as policy. Economists agree that providing unemployment benefits is one of the most efficient ways to stimulate the economy, since jobless workers are most likely to spend their checks immediately, thereby pumping money back into the economy and generating economic activity.
Along with the UI extension, the AFL-CIO urged lawmakers to include a temporary increase in food-stamp benefits, fiscal relief to the states and an acceleration of ready-to-go infrastructure construction projects.
7 Comments
Sorry, the comment form is closed at this time.
It always amazes me when the politicians in this country can deny workers who have lost their jobs the right to extended unemployment rights. This so called stimulus bill is a bad joke not only on the poor, disabled but on anyone who has served in the American military. A lot of these young veterans as well as reserveists and National Guard have lost their jobs because they did 15 months or more in the big Ash Tray called Iraq and the forgotten War in afganistan. Wake up you people in the congress and this administration take care of our people. Millions for Defense but not one penny for tribute?We are bankrupting our America and making beggers out of our people.
Since most manufacuring jobs are sent to China and other “not to friendly nations” a stimulus paln would be to retrain those wh were laid off. Health care training and personal service jobs are about the only ones left in the USA.
Amazing the Democrats did not demand the end of the tax breaks for the wealthy, something the dictator said would stimulate the economy. Looks like another domestic fiasco he gets to add to his legacy. Maybe another lie is defining it better.
Now, are the wealthy getting an additional rebate?
On closer inspection you’ll find that this so-called stimulus package is cover for yet another tax cut for those who don’t need it. The last stimulus package, back in 2001, gave the children of the super-rich the money that could have covered shortfalls in social security projected for the next 20 years. In this case, businesses are the beneficiaries. It’s a clever ploy. While we’re dancing with glee over a pittance, a tax cut is awarded to US companies that are “flush with cash,” as one economist put it. If they can afford to pay their executives outrageous salaries and buy each other out for grossly inflated prices they don’t need a tax break. Besides, if we’re ever going to fix the nation’s infrastructure we’ll need that money.
If Congress really wanted to boost the economy they would immediately increase the minimum wage by several dollars, not reward the pirate captains of industry.
Confessions of a Job Exporter
Say you owned the corner store and needed to hire one employee. Say further that there was a federal law providing that if you hired an American citizen for that position, you would be subject to a fine equal to 35% of your income. If you said, “OK, if that’s the law then I will hire a non-citizen”, would you therefore be evil? Or would you be entirely justified in saying “If society wants me to hire an American, then they should change that law and not fine me for doing it”? The U.S. government does impose such a law, and multinational corporations face the shopkeeper’s dilemma every day. That law should be changed
I am one of the people who decides to locate jobs outside of the U.S. Specifically, I am the head of tax for a U.S. multinational. It is my job to advise that high value manufacturing and research should, from a tax point of view, be located outside of this country. I advise that it is better to invest cash in foreign operations than in American ones. If the recent tax proposal of House Ways and Means Committee Chairman Rangel becomes law, I will advise that good administrative jobs should be moved out of the U.S. I don’t like giving that advice, but under current law that’s what the numbers dictate. I want to change that.
Of course tax isn’t the only thing that governs the decision on where to put operations. My company has a set of activities that we can afford to keep in the U.S. out of loyalty, but if we did too much of that we’d be acquired by another (probably foreign) company. For the rest of the operations, it’s just math - add up relative labor and transportation costs and the cost of materials, figure in tax, and that tells you where to locate, excluding places with homicidal or corrupt governments. For the highest tech, highest profit operations, though - the ones that involve the best jobs - tax becomes dominant.
U.S. law currently provides that most income earned abroad is only taxed by the U.S. when you bring the cash home. So, if you make $100 in America you only keep $65 after the U.S. 35% corporate tax, but you keep the full $100 if you earn it in the Dominican Republic. When you reinvest that $100 of D.R. cash you can use the full $100 if you invest abroad, but only $65 if you invest in America, due to the U.S. tax bite. So you invest in new foreign operations, not American ones.
Changing the law to tax the D.R. operations currently would not work. America is not the only economy that counts any more, and most countries do not tax foreign earnings at all. If the U.S. immediately taxed foreign earnings, our companies would get acquired or crushed by competitors, and we’d just lose our headquarters jobs. Like it or not, it is a global economy now, and this country does not control it.
But there is a simple solution that works. Give corporations a deduction for dividends they pay, and make up the tax revenue by getting rid of special rates for capital gains and by imposing a 7½% tax on individual income over $500,000 a year, which is all it takes to be revenue neutral. That would make the U.S. the best location in the world for high value operations. It would restore our economy and give middle class workers market power.
There are plenty of proposals circulating for mostly hokey ways to stimulate our weak economy. The American people need to demand a real, long term solution. Change the rules so that I can tell my employer to put all the best jobs here.
Matt Lykken is a tax attorney and is Director of SharedEconomicGrowth.org. Details of the proposal can be found at http://www.sharedeconomicgrowth.org .
Barack Obama said in a speech last night that he wants to make the minimum wage $9.50 an hour and wants to bring American industry, companies, jobs back here, and he wants to make it profitable for companies to reinvest in America by doing so. Well, that’s a start, and perhaps a difficult plan to implement, but you could see the possibilities and the urgency of at least proposing these things. This country can no longer afford to let things continue the way they are. The “Duke” is correct. We are bankrupting America and making beggars of us all.
Most people do not want handouts, or a “stimulus package” pay-off, but they want real jobs with good pay so they can take care of themselves. However, it is our nation’s duty to protect the elderly, the disabled, children, and OUR VETERANS, who have put their lives on the line each and every day for this country, and whom we have abandoned. IT IS OUR NATION’S DUTY!!!! WAKE UP CONGRESS!!!!!!
Remember the Robber Barons? That’s who is in charge once again. How did we stop the Robber Barons? We need to that again.