For millions of hard-working
middle-class families, life under Republican rule has grown less affordable and
less secure. President Bush’s record of fiscal incompetence and
mismanagement, and Republicans’ close ties with special interests, have helped
lead to both lower wages and skyrocketing costs for basic necessities like gas,
health care, and college tuition. Unfortunately, instead of producing
solutions to the problems facing the middle class, Bush Republicans are
ignoring them and pushing for policies that will make matters even worse.
In addition to tightening
the squeeze on families, Republican policies have made our entire nation less
secure economically. Republicans have pushed to increase our debt to
nearly $9 trillion and have insisted on spending billions of dollars every year
on budget-busting tax breaks for special interests and
multi-millionaires.
The Bush Administration also
continues to compromise our economic security by increasing our reliance on foreign
investors in China, Japan, and Dubai.
Democrats have fought to reduce America’s
dependence on foreign borrowing and foreign sources of oil, but the Republican
majority, often at the behest of powerful special interests, repeatedly has
blocked those efforts.
It’s time for a new
direction. Middle-class families, and our nation, deserve better.
Democrats will continue to offer the solutions that will bring back the fiscal
responsibility and broad economic opportunity for middle-class families achieved
during the 1990’s.
MIDDLE-CLASS FAMILIES SQUEEZED BY SKYROCKETING COSTS
Health care premiums have increased by
over 80 percent. The cost of
family health insurance has skyrocketed 81 percent since 2000. Premiums
are rising twice as fast as wages and inflation. The typical family health
insurance premium is now $11,480 a year compared with $6,348 in 2000. (Kaiser
Family Foundation and Health Research and Educational Trust, 9/06) The
number of Americans without health insurance rose to a record high in 2005.
The number of uninsured Americans has increased every year since President Bush
took office from 39.8 million in 2000 to 46.6 million in 2005. (U.S. Census
Bureau, 8/29/06)
Gas prices have increased 70
percent. Prices at the gas
pump jumped 70 percent from $1.47 per gallon the week President Bush took
office in January 2001 to $2.31 in the latest week of energy price data. The
average price for the summer was 87.5 percent higher than the average price for
the summer of 2001. The monthly average
price for August 2006 was 104 percent higher than the monthly average price for
January 2001. The price for a barrel of oil has more than doubled during
the Bush Administration from $30.63 in January 2001 to $61.40 in early
September 2006. (Energy Information Administration, Household Vehicle Energy
Use: Latest Data and Trends; Weekly Retail Gasoline and Diesel
Prices, 10/2/06; Spot
Prices for Crude Oil, 9/22/06) The average household with children will
spend about $3,786 on transportation fuel costs this year, an increase of 99
percent or $1,883 over 2001 costs. (Energy Information Administration,
Household Vehicle Energy Use: Latest Data and Trends; Short Term
Energy Outlook, 9/12/06)
College education costs
have risen by as much as 44 percent.
Average tuition, fees, room, and board costs at four-year private universities
have increased by $6,786 from $22,240 in the 2000-2001 academic year to $29,026 in the 2005-2006 academic year.
Tuition, fees, room, and board charges at four-year public colleges grew more rapidly
between 2000-2001 and 2005-2006, after adjusting for inflation, than during any
other five-year period since 1975. Total costs jumped from $8,439 in
2000-2001 to $12,127 in 2005-2006—an increase of $3,688, or 44 percent.
(College Board, 10/05) The cost of a college education is rising faster
than family income, but key federal tuition assistance programs such as the
Pell Grant program have failed to keep pace with the rising cost of college.
While the maximum Pell Grant covered 51 percent of the cost of tuition,
fees, room and board at a public four-year college during the 1986-1987 school year, it covered only 35 percent of those costs in
2004-2005. (Analysis of Department of Education data)
Housing affordability has reached a 19-year
low. Housing
affordability has reached its lowest level since 1987. Median monthly
home ownership costs, including mortgage payments, have increased over 49
percent since January 2001. (National Association of Realtors, 7/06)
“Next year, $1 trillion worth of adjustable-rate mortgages -- about 11 percent
of all outstanding mortgage debt -- is scheduled to readjust to a higher
interest rate for the first time, according to LoanPerformance,
a research company. This will come after more than $400 billion of
readjustments this year. That means millions of homeowners will either
have to refinance or shoulder an increase of perhaps 25 percent in their
monthly payments.” (Washington
Post, 9/5/06) According to the Wall Street Journal, “Soaring
house prices and higher mortgage rates have put homeownership out of reach for
more people than at any time in more than a
decade…Affordability has long been a problem for low-income home buyers.
But as home prices have marched steadily higher in recent years, many
buyers with healthier incomes also are being squeezed.” (Wall Street Journal,
12/22/05)
MIDDLE-CLASS FAMILIES SQUEEZED BY DECLINING INCOME AND FEWER
JOB OPPORTUNITIES
While families work harder, their wages continue to decline. Middle-class families are working harder
and earning less today than they were at the start of the Bush
Administration. According to the Wall Street Journal, “Since the
end of the recession of 2001, a lot of the growth in GDP per person -- that is,
productivity -- has gone to profits, not wages.” (Wall Street Journal,
3/27/06) Median household income has declined $1,273 from $47,599 in 2000
to $46,326 in 2005. The real median earnings of both male and female
full-time, full-year workers declined between 2004 and 2005 by 1.8 percent and
1.3 percent, respectively. (U.S.
Census Bureau, 8/29/06) Median weekly earnings have fallen 0.9 percent
since 2000 compared with 7.3 percent growth in the last five years of the
Clinton Administration. At the same time that families have seen their
real earnings decline, the productivity of the American worker is up 18.4
percent. Therefore, Americans have worked harder -- and more productively
-- over the past five years and received none of the benefits of their hard
work. (Bureau of Labor Statistics; Joint Economic Committee Democrats,
9/06)
Earnings
for workers with college degrees declining. “Wage stagnation, long the bane of
blue-collar workers, is now hitting people with bachelor’s degrees for the
first time in 30 years. Earnings for workers with four-year degrees fell
5.2 percent from 2000 to 2004 when adjusted for inflation, according to White
House economists…Not since the 1970s have workers with bachelor’s degrees seen
a prolonged slump in earnings during a time of economic growth…trends for people
with master’s and other advanced degrees…have found that their
inflation-adjusted wages were essentially flat between 2000 and 2004.” (Los Angeles
Times, 7/24/06)
Worst job
creation record since
Hoover
Administration. A growing economy should be good news
for those seeking jobs. But over the course of President Bush’s five
years in office, his Administration has the worst overall job creation record
since Herbert Hoover more than 70 years ago. (Bureau of Labor Statistics,
9/1/06) Overall non-farm payroll employment has increased by 3 million
during the Bush presidency compared with 22.7 million during the Clinton presidency.
Overall employment growth has averaged just 45,000 per month under
President Bush—much lower than the approximately 150,000 jobs needed each month
to keep up with population growth. It was not uncommon to see monthly job
gains of 300,000 and even 400,000 during economic expansions under previous
Administrations. (Bureau of Labor Statistics, 9/1/06; Joint Economic Committee
Democrats, 9/06; Economic Policy Institute, The Boom That
Wasn’t, 12/19/05)
Private sector job creation has
been especially poor during the Bush presidency, with an average annual job
growth rate of just 0.3 percent per year since 2001. Just 1.9 million
private sector jobs have been created during the Bush presidency, compared with
over 20 million private sector jobs during the Clinton presidency. (Bureau of Labor
Statistics, 9/1/06; Joint Economic Committee Democrats, 9/06) The
manufacturing sector, often the source of jobs with good pay and benefits, has
lost nearly 3 million jobs since the start of the Bush
Administration. (Bureau of Labor Statistics, 9/1/06) Nearly half of
the jobs created since 2001 were part-time and freelance positions without
benefits. (Los Angeles
Times, 7/24/06) This slow pace of private sector job creation is
particularly troubling given that we are so far into the economic
recovery.
Unemployment has increased 12
percent and long-term joblessness has nearly doubled. In part because of this failure to
create a sufficient number of jobs, the national unemployment rate stands at
4.7 percent which is 12 percent higher than the 4.2 percent rate when President
Bush took office. Unfortunately, once unemployed, America’s
workers also are staying unemployed longer. In August 2006, nearly one in
five of the unemployed had been out of work for more than 26 weeks. The
number of long-term unemployed has nearly doubled since President Bush took
office. (Bureau of Labor Statistics, 9/1/06)
Bush’s deficit-financed tax
cuts have widened the income gap between millionaires and middle-class workers. In his latest testimony before
Congress, Federal Reserve Chairman Ben Bernanke
warned against rising income inequality: “to the extent that incomes and
wealth are spreading apart, I think that is not a good trend.” (Testimony of
Ben Bernanke before the Senate Committee on Banking,
Housing, and Urban Affairs, 7/19/06) The Wall Street Journal has
attributed the widening income gap to President Bush’s tax policies: “it
appears that the highest-salaried workers -- executives, managers and
professionals -- are widening their lead on the typical worker…The Bush tax
cuts appear to have widened the income gap, according to many analyses.” (Wall
Street Journal, 3/27/06) President Bush’s capital gains and dividends
tax cuts will cost $197 billion over ten years, with most of the benefits going
to multimillionaires. In an analysis by the New York Times, “Among
taxpayers with incomes greater than $10 million, the amount by which their
investment tax bill was reduced averaged about $500,000 in 2003, and total tax savings, which
included the two Bush tax cuts on compensation, nearly doubled, to slightly
more than $1 million… Those making less than $50,000 saved an average of $10
more because of the investment tax cuts…few taxpayers with modest incomes
benefited because most of them who own stocks held them in retirement accounts,
which are not eligible for the investment income tax cuts.” (New York Times, 4/5/06)
Bush Republicans gave away more special interest tax breaks for
Big Oil and multi-millionaire investors at the expense of tax relief for the
middle class. This
year’s Republican tax reconciliation conference report included more expensive
tax breaks for Big Oil companies and multi-millionaire investors, but
eliminated the college tuition tax deduction, failed to adequately address the
Alternative Minimum Tax, and failed to provide middle-class families relief
from the rising costs of tuition, gas prices, and health care.
“Republican lawmakers, facing the prospect that their power to cut taxes may
soon be curbed, plan to extend breaks that mostly benefit the wealthy and Wall
Street at the expense of reductions for middle-income households.” (Bloomberg, Republicans
Set Aside Middle-Income Tax Cuts to Focus on Rich, 5/8/06)
More
American families and children face severe financial problems. The poverty rate has increased 12 percent
to 12.6 percent since 2000. Nearly thirty-seven million Americans were
living in poverty in 2005, an increase of 5.4 million over the 2000
level. Poverty has hit America’s
children particularly hard. According to the latest
Census report, almost one in six American children lives in poverty.
The number of children living in poverty has increased 11.3 percent during the
Bush Administration. (U.S.
Census Bureau, 8/29/06)
MIDDLE-CLASS FAMILIES SQUEEZED BY RECORD LEVELS OF DEBT
Bush Republicans turned
record budget surpluses into record deficits. President Bush inherited a unified budget
surplus of $236 billion from President Clinton, the largest surplus in American
history. Budget surpluses were expected to continue for another ten years
when President Bush took office in January 2001. By 2002, however, the
unified federal budget had returned to a deficit of $158 billion and has since
reached historic highs. This year, the budget deficit is expected to
reach $260 billion. (President
Bush's Budget for Fiscal Year 2002, A Blueprint for New Beginnings,
2/28/01; Congressional
Budget Office, 8/06)
Bush Republicans, addicted to
borrowing, increased the national debt by $3 trillion. President Bush is the most fiscally
irresponsible American president, having presided over the largest explosion of
debt in our nation’s history. For four years in a row, President Bush has asked
Congress to increase the statutory debt limit, resulting in a $3 trillion, or
54 percent, increase. At the end of 2006, the federal debt is expected to reach an
estimated $8.5 trillion. By 2011, the President’s budget would increase
the public debt to $11.6 trillion. (U.S. Treasury Department, Bureau of
Public Debt; Congressional Budget Office, 8/06)
Enormous trade deficit is
undermining U.S.
competitiveness.
Each year since 2001, the U.S. trade deficit has increased at double digit
rates and in 2005 set an alarming record high of $725.8 billion—twice the size
of the trade deficit in 2001. Even more troubling, our trade in Advanced
Technology Products, a strong indicator of U.S. competitiveness, which was in surplus as recently as 2001, experienced a deficit of more
than $44 billion in 2005. (U.S.
Census Bureau, Bureau of Economic Analysis)
Debt owed to foreigners
climbs to record levels. In order to finance record budget deficits, the United States
has had to borrow at unprecedented rates from foreigners. In the five
years of President Bush’s tenure, the United States has accumulated more
debt to foreigners, approximately $1.1 trillion, than this country had
accumulated in its first 224 years. By contrast, during the last three
years of the Clinton Administration, the United States paid off more than
$200 billion in debt to foreigners. (U.S. Treasury Department, Major
Foreign Holders of Treasury Securities; Federal Reserve Board)
Record government and
personal debt levels threaten economic future. Record federal deficits and debt create
record interest costs for Americans. In 2006, interest costs on the
federal debt will total $404 billion and this figure will grow to $612 billion
by 2013. (Congressional Budget Office, 8/06) “Flat wages and rising debt
nationally have converged to leave millions of middle-class households feeling
acutely vulnerable to bumps in their financial planning…According to a study by
the Federal Reserve Board, the ratio of financial obligations -- primarily
mortgage and consumer debt -- to disposable personal income rose to a modern
record of 18.7 percent earlier this year.” (Washington Post, 9/5/06)
Average student
loan debt soars to more than $19,000. Interest rates for Stafford
student loans have risen substantially over the past two years, from 3.4
percent to 7.14 percent for outstanding loans and 6.8 percent on new loans.
(Congressional Research Service) As a result, loan payments will be considerably
higher for students taking out new loans and for those who did not consolidate
loans in recent years. Without adequate federal grants funding, students
and their parents must rely more on student loans to finance their college
educations. More than 60 percent of undergraduates at four-year colleges
have to take out loans, and the average amount of federal student loan debt
upon graduation has increased from $7,650 in the 1992-1993 to $17,400 in
2003-2004. When private loans are factored in as well, average student
loan debt in 2003-2004 was more than $19,000. (National Postsecondary Student
Aid Study 1993 and 2004, National Center for Education Statistics)
Erosion of employer-provided
pensions threatens Americans’ retirement security. Workers should be able to count on
the retirement promises made by their employers. Increasingly, that is
not the case. An analysis by the Pension Benefit Guaranty Corporation
(PBGC), the federal entity created by Congress to protect employee pensions,
found that nearly 10 percent of pension plans halted benefit accruals in 2003
alone, the latest year for which complete data is available. According to
PBGC Executive Director Bradley Belt, anecdotal evidence suggests that this
number has been even higher since then. Unfortunately, Bush
Administration proposals to expand tax-favored savings accounts that primarily
benefit the wealthy risk further pension plan erosion. (PBGC, <http://www.pbgc.gov/media/news-archive/2005/pr06-12.html>; Center on Budget and Policy Priorities, 5/05)
