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, Republicans are ignoring them and pushing for
policies that will make matters even worse. It’s no wonder 68 percent of
Americans say that things are getting worse for the country under President
Bush. (CBS/New York Times poll, 5/10/06)
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. Just
this week, the Republican Congress protected $5.1 billion worth of corporate
tax loopholes for Big Oil companies, but failed to extend deductions for
college tuition, teachers’ expenses, and the savers credit that help millions
of middle class families.
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.
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.
RISING COSTS FOR MIDDLE-CLASS FAMILIES
Gas prices have increased
over 100 percent.
Prices at the gas pump have jumped 102 percent from $1.44 per gallon in January
2001 to $2.90 in May 2006, with prices rising by 40 cents in four weeks this
spring. The price for a barrel of oil has more than doubled from $29.59
in January 2001 to $69.44 in April 2006. The average household with
children will spend about $3,343 on transportation fuel costs this year, an increase
of 75 percent or $1,440 over 2001 costs. (Energy Information Administration,
Household Vehicle Energy Use: Latest Data and Trends, and Weekly
Retail Gasoline and Diesel Prices)
Health care premiums have increased by
over 70 percent. The cost of family
health insurance has skyrocketed 71 percent since the beginning of the Bush
Administration. The typical family health insurance premium is now
$10,880 a year compared with $6,348 in 2000. (Kaiser Family Foundation)
College tuition has skyrocketed by as
much as 57 percent. Tuition
and fees at four-year private universities have increased by almost $1,200 or
5.9 percent in 2005 and 32 percent since the 2000-2001 school year. At
four-year public universities, tuition and fees increased by 7.1 percent this
past year and 57 percent since President Bush took office. (College Board,
10/05)
Housing affordability has reached a 14-year
low. Median
monthly home ownership costs, including mortgage payments, have risen nearly five
percent since President Bush has taken office. 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.” (U.S. Census Bureau; Wall
Street Journal, 12/22/05)
LOWER WAGES AND POOR JOB CREATION
While working 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 weekly earnings have fallen 0.9 percent since 2001 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. (U.S. Census Bureau;
Bureau of Labor Statistics; Joint Economic Committee Democrats, 5/06)
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. Overall nonfarm payroll
employment has increased by 2.6 million during the Bush presidency compared
with 22.7 million during the Clinton presidency. (Joint Economic Committee
Democrats, 5/5/06) Overall employment growth has averaged just 41,000 per
month under President Bush—much lower than the 135,000 to 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. (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 1.5 million
private sector jobs have been created during the Bush presidency, compared with
over 20 million private sector jobs during the Clinton presidency. (Joint
Economic Committee Democrats, 5/5/06) The manufacturing sector, often the
source of jobs with good pay and benefits, has lost approximately three million
jobs since the start of the Bush Administration. This slow pace of
private sector job creation is particularly troubling given that we are so far
into the economic recovery.
Unemployment has increased
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 March 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. (U.S.
Census Bureau; Bureau of Labor Statistics)
Bush’s deficit-financed tax
cuts have widened the income gap between millionaires and middle-class workers. “In addition, 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)
The recent
Republican tax reconciliation conference report included more expensive tax
breaks for the wealthiest Americans, but excluded provisions that would have
helped middle class families deal with the rising costs of tuition, gas prices,
and healthcare. “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 number of Americans who are living in
poverty has increased each year of the Bush Administration and is now nearly 17
percent higher today than in 2000. Thirty-seven million Americans were
living in poverty at the end of 2004, an increase of 5.4 million over the 2000
level. Poverty has hit America’s children particularly hard.
According to a UNICEF report on child poverty rates in 2005, more than one in
five children in the United States live in “relative” poverty. (U.S.
Census Bureau)
REPUBLICAN FISCAL IRRESPONSIBILITY
President Bush 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 record
highs. This year, the budget deficit is expected to reach a record $423
billion. (Office of Management and Budget)
President Bush is the most fiscally
irresponsible president in history. President Bush has presided over the largest explosion of
debt in our nation’s history. When President Bush took office, the total
national debt was $5.6 trillion. The federal debt has increased 54
percent since President Bush took office, from approximately $5.6 trillion at
the end of 2000 to an estimated $8.6 trillion at the end of 2006. By
2011, the President’s budget would increase the public debt to $11.8 trillion.
(U.S. Department of the Treasury, Bureau of Public Debt)
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 $1.2 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. In 2006, interest costs on the federal debt will
total nearly $400 billion and this figure will grow to nearly $597 billion by
2013. Record levels of personal indebtedness also limit choices and keep
many Americans on the financial brink. In the last two quarters of 2005,
Americans had the worst ratio of household debt and mortgage debt to disposable
income in over 25 years. These record levels of personal debt cast an
ominous shadow over the economic outlook for 2006, a cloud made darker as
millions of adjustable-rate mortgages will reset over the coming year, forcing
consumers to pay significantly higher interest rates. (Congressional
Budget Office; Federal Reserve Board)
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)
