BushWatch: First MBA President Leaves Behind an Economic Wasteland

by Mike Hall, Jan 15, 2009

Eight years of President Bush’s economic tax cuts for the rich and job-killing actions have devastated working families. Just look at the smoking crater of the economy he’s leaving behind—7.2 percent unemployment, 2.6 million jobs lost last year alone, home foreclosures up by 81 percent in 2008, a plunging stock market, failing banks. Heck of a job, Bushie!

Our BushWatch retrospective today looks at a few of his more notable moves—mostly aimed at helping the wealthy and corporate world, with little regard for the rest us. For a complete listing, go to BushWatch and click on “Jobs and the Economy” and “Tax Cuts for the Wealthy” in the top box.

In early 2001, the man who molded Bush’s economic brain set the tone for the next eight years. Treasury Secretary Paul O’Neill said U.S. corporations should pay no income tax. Further, he said the capital gains taxes for businesses should be abolished and “able-bodied” adults should take care of their own retirement needs and medical expenses.

One of the first economic initiatives from the so-called “compassionate conservative” president (and the first president with an MBA)  was a huge tax cut for the wealthy. The multi-trillion dollar tax cut sent 40 percent of its relief to the wealthiest 1 percent and allocated just 12.7 percent of the tax cut to the 60 percent of the families at the other end of the income scale.

One tax break Bush didn’t care for was the Earned Income Tax Credit (EITC) for low-income families. Even as corporations sheltered hundreds of billions of dollars in offshore accounts and other hideaways, the Bush administration issued new rules that made it harder for low-income families to receive the credit.

Working families didn’t fare any better in Bush’s budgets with cuts to vital working family programs for job training and job creation—including cuts of nearly 30 percent in highway and transit funds in his fiscal year 2003 budget that cost some 300,000 jobs.

That same budget cut corporate taxes that fund the nation’s unemployment insurance (UI) system by 75 percent. Bush was even set to allow states to pay subminimum wages to welfare recipients in “workfare” jobs, but he backed down when news reports uncovered the scheme.

In 2002, Bush began a streak of turning his back on longterm jobless workers when he backed House Republicans in their defeat of a 13-week extension of UI benefits for workers struggling in the first Bush recession.

Many working families depend on overtime pay to make ends meet. But a rule from Bush’s Labor Department put that extra pay at risk by allowing employers to reclassify many workers currently eligible for overtime as managers and administrative or professional employees, who are exempt from time-and-a-half overtime pay.

After Hurricane Katrina devastated the Gulf Coast in August 2005, one of Bush’s  executive orders repealed the law that protects the wages of construction workers on federally funded projects. The order covered the hurricane-damaged areas across several states, and with the federal government footing most of the recovery and reconstruction projects, tens of thousands lost wages.

But protecting workers’ wages wasn’t a top Bush priority. How else do you explain his back-door recess appointment in 2006 of a former Wal-Mart attorney with a long record of urging restrictions to the Fair Labor Standards Act’s overtime pay and other provisions to head up the U.S. Department of Labor’s Wage and Hour Division?

Speaking of fair wages, because of a Bush veto threat last year, the Lilly Ledbetter Fair Pay Act stalled. The bill would have reversed a U.S. Supreme Court ruling that denied a former Goodyear worker justice for more than 20 years of pay discrimination, where she earned substantially less than men doing the same job. That ruling has blocked hundreds of pay discrimination cases from going forward.

In July, two Government Accountability Office reports found that the Wage and Hour Division was conducting fewer and less-thorough investigations into employer wage theft.

All in all, Bush has the worst economic track record of any president since Herbert Hoover.

For Parts 1, 2 and 3 of our BushWatch review, click here, here, and here.

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