Skip to main content

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

Press Center

Apr 25 2008

First Congressional Hearing to Examine Economic Impact of Skyrocketing Food Prices on American Families

 MEDIA ADVISORY:
FIRST CONGRESSIONAL HEARING TO EXAMINE ECONOMIC IMPACT OF SKYROCKETING FOOD PRICES ON AMERICAN FAMILIES
 
As Middle Class Families Are Squeezed by a Weak Economy, Record Energy Prices and Soaring Food Prices, Joint Economic Committee Will Explore Impact on Consumers and the U.S. Economy and Possible Solutions


Washington, D.C. – U.S. Senator Charles E. Schumer (D-NY) will convene a Joint Economic Committee (JEC) hearing to examine skyrocketing food prices and their impact on the pocketbooks of already-struggling middle-class families.  The hearing, entitled, “How Are High Food Prices Impacting American Families?” will be held Thursday, May 1, 2008 at 10:00 am in Room 216 of the Hart Senate Office Building.  In the wake of across-the-board price increases of groceries throughout the nation, U.S. Department of Agriculture Chief Economist Dr. Joseph Glauber will offer his assessment of the underlying causes behind the dire food crisis.  A representative from America’s Second Harvest, the largest domestic hunger relief organization, and the President of the National Farmer’s Union, as well as other food industry experts will be on the panel.  

WHAT:          Joint Economic Committee Hearing:
“How Are High Food Prices Impacting American Families?”

WHO:           Dr. Joseph Glauber, Chief Economist, U.S. Department of Agriculture
                    George Braley, Senior Vice-President, America’s Second Harvest
                    Tom Buis, President, National Farmers Union
                    Richard Reinwald, Owner and Co-Founder, Reinwald’s Bakery

WHEN:          10:00am, Thursday, May 1, 2008
 
WHERE:        Hart Senate Office Building, Room 216

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

#    #    #

Apr 25 2008

Joint Economic Committee to Hold Employment Hearing on Release of New April Jobs Report

 MEDIA ADVISORY  
JOINT ECONOMIC COMMITTEE TO HOLD EMPLOYMENT HEARING ON RELEASE OF NEW APRIL JOBS REPORT
 
JEC to Address New Jobs Report from Bureau of Labor Statistics in Light of Three Consecutive Months of Job Losses and Further Deterioration of Economy

Washington, D.C. – U.S. Senator Charles E. Schumer and Representative Carolyn Maloney, Chairman and Vice-Chair of the Joint Economic Committee (JEC) respectively, will hold a hearing on the newly released Bureau of Labor Statistics’ (BLS) monthly employment figures with Commissioner Keith Hall on Friday, May 2, 2008 at 9:30 am in the Dirksen Senate Office Building, Room 562.  Senator Amy Klobuchar (D-MN) will preside over the hearing, entitled “The Employment Situation: April 2008.”  Given three consecutive months of job losses so far, Dr. Hall will assess recent developments within the labor market.

WHAT:        Joint Economic Committee Hearing on
                  “The Employment Situation in April 2008”
WHO:          Dr. Keith Hall, Commissioner,
                  Bureau of Labor Statistics                                  
WHEN:        Friday, 9:30 a.m., May 2, 2008
WHERE:      Dirksen Senate Office Building, Room 562

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

#    #    #

Apr 24 2008

With Gasoline Prices at Historic Highs, Senators Vow to Block U.S. Arms Deals With OPEC Members if They Don’t Increase Oil Production

WITH GASOLINE PRICES AT HISTORIC HIGHS, SENATORS VOW TO BLOCK U.S. ARMS DEALS WITH OPEC MEMBERS IF THEY DON’T INCREASE OIL PRODUCTION

As Oil Surpasses All Time Highs per Barrel, Many OPEC Members Producing Well Under Their Capacity, Despite Americans Paying Over $3.50/gallon of Gasoline

In Light of OPEC Members Refusing to Increase Oil Production, Congress Will Look to Block Multi-Million Dollar Arms Deals with Bush Administration

Washington, D.C. – U.S. Senator Charles E. Schumer, Byron Dorgan (D-ND), Bernie Sanders (I-VT), Bob Casey (D-PA), and Mary Landrieu (D-LA) released a letter today calling on the Bush Administration to use its leverage with the members of the Organization of Petroleum Exporting Countries (OPEC) to increase oil supplies or risk Congress holding up multi-million dollar arms deals with Saudi Arabia, the United Arab Emirates and other OPEC members.  As Americans are paying more than ever to fill up their cars at the gas station ($3.50/gallon on average for regular gasoline), it is clear that oil production by OPEC members is below the capacity at which they could be producing.  As a result, higher oil prices are affecting U.S. consumers from the gas pump to the grocery store.  The Bush Administration has refused to be tough with so-called OPEC allies and in fact continues to provide huge arms deals, despite the economic pains taxpayers are feeling. 

Schumer said, "The Saudis have to understand this is a two-way street. We provide them weapons, our troops provide them protection, and then they rake us over the coals when it comes to oil.  The Saudis and Big Oil are in cahoots and this Administration has coddled them both for far too long."

Dorgan said, “U.S. and Saudi Arabia have had a strategic alliance for decades which anticipates that they pump sufficient oil to meet the needs of our economy and our economic growth.  And we provide strategic military support in the form of military equipment needed for their security.  In the past couple of years, however, the Saudis as part of the OPEC cartel have reduced their production allowing the price of oil to go to near $120 per barrel which has caused real damage to our economy.  Yet the Saudis expect the United States to sell them strategic military equipment to bolster their security.  I think if the Saudis expect us to fulfill their requirement for strategic military goods to provide for their security they have a requirement to be pumping sufficient oil to provide for our economic security.”
 
Casey said, "The Bush Administration has not shown leadership and has not used all tools at their disposal to put pressure on OPEC nations to increase production to provide relief from record oil prices," said Senator Casey.  "In addition to record prices at the pump, Americans are shouldering a greater burden because Iraq's oil-producing neighbors are not living up to their pledges of support for Iraq reconstruction and debt relief."

Sanders said, “We have a national crisis in terms of outrageously high energy prices.  If the Saudi’s and other OPEC countries continue to refuse to increase supply, the President should ban arms sales to them.  If they still refuse to increase production, the President should work to break-up OPEC.”

Landrieu said, “As gas prices go up, the impact reverberates through our entire economy.  It not only hits American drivers at the pump, it increases manufacturing and transportation costs which affect the price on almost every product we buy.  All the while, foreign powers with their hands on the spigot choose to artificially limit production to keep costs high – and the Administration rewards them for it.  It’s time to stand strong and bring balance to this equation.  We also need to boost energy production here at home so our economy is not as easily held hostage to foreign interests.  Louisiana and its neighbors are America’s only Energy Coast and are proud to do our part to fuel the nation.”

Klobuchar said, “Just as our gas prices are skyrocketing, the administration has fallen asleep at the wheel.  We need a foreign policy that looks at every option that could help us bring these prices down.”

The text of the letter to President Bush is below: 
April 24, 2008
George W. Bush
President
The White House
Washington, DC 
Dear Mr. President:
 
American consumers are facing unprecedented gasoline prices, with the national average price of a gallon of regular gas at $3.56, roughly $.70 higher than last year and more than double since 2001. The price of diesel fuel has increased even more rapidly - reaching a record $4.22 a gallon, over a dollar more expensive than 2007.  The price of diesel fuel not only impacts truck drivers, but it pushes food and transportation costs higher for consumers too.  The combined effect of these energy prices drags down our economy, which can serve to extend and deepen the recession even further.
 
Your administration has shown a callous indifference to the pain these high prices are inflicting on American families. At the same time, your administration has coddled Organization of Petroleum Exporting Countries (OPEC) nations whose actions have contributed to this crisis. 
 
We are writing to urge you to demand that OPEC members increase their oil production because they are currently producing well under their capacity.  As you know, the first four months of 2008 witnessed extraordinary and historic increases in the cost of crude oil, which has impacted not only the costs of gasoline and heating oil in the U.S., but food and commodity prices as well. Despite skyrocketing energy costs, OPEC members claimed that they saw no reason to increase production quotas. We respectfully urge you to call upon Saudi Arabia, the United Arab Emirates (UAE), and other OPEC members to increase their oil production immediately.
 
OPEC’s recent decision not to increase production before next fall at the earliest will surely cause prices to remain high and will lead to higher energy prices for Americans this spring and summer. Recently, Ali al-Naimi, Saudi Arabia’s oil minister, said there was no need to increase supplies by “even one barrel of oil.” And Abdullah al-Attiyah, Qatar's energy minister, said, "Is there a need for extra production? I don't think so."
 
OPEC members have no economic incentive to increase supply of oil, because that would lead to a drop in price. The OPEC cartel is reaping the benefits of record profits at the expense of the American consumer and economy.  Saudi Arabia was producing roughly 9.55 million barrels per day (MBPD) in 2005, but it dropped production down to 8.72 MBPD last year.  By their own estimates, they have the capacity to produce over 11 MBPD.  Both Kuwait and the UAE are also producing below their total capacity.
 
At a time when high energy prices are causing widespread anxiety among American households, we question the merit of rewarding members of OPEC with lucrative arms sales. The perverse incentives created by this arrangement suggest a disregard for the devastating impact on the American economy of high energy prices.
 
We question why your administration would reward Saudi Arabia for its failure to increase its crude oil production with the sale of 900 Joint Direct Attack Munition (JDAM) kits that could top $100 million.  We question why your administration would reward the UAE with a Patriot missile defense deal that could be worth as much as $9 billion. And we question why your administration rewarded Kuwait by offering $2 billion in arms sales.  All told, in the past six months, your administration has proposed selling almost $14 billion worth of weapons to Gulf members of OPEC who are contributing to the global oil crisis.
 
While some of us have concerns in general about arming this region to the teeth, should Saudi Arabia or the UAE fail to significantly increase daily production of crude oil, we would be compelled to block any and all sales of weapons from the United States to Saudi Arabia and the UAE, and would consider exploring blocking additional weapons sales to other OPEC members.
 
While we are fighting an immensely expensive war in Iraq, which the administration intended to be paid for by Iraq’s oil revenues, American taxpayers have ended up footing the bill in the form of rising energy costs. Meanwhile the Department of Defense continues to ship billions of dollars in weapons systems to the very same OPEC countries enjoying the windfall oil profits.  The American people deserve better. We look forward to your prompt attention to this matter.
 
Sincerely,
 
Senator Charles E. Schumer                                         
Senator Byron Dorgan
Senator Bernie Sanders                                                
Senator Bob Casey
Senator Mary Landrieu                                                 
Senator Amy Klobuchar
 
#       #       #

Apr 18 2008

Senior Democrats, in Letter to Nussle, Renew Call for Administration to Testify About Devastating Costs of Iraq War

SENIOR DEMOCRATS, IN LETTER TO NUSSLE, RENEW CALL FOR ADMINISTRATION TO TESTIFY ABOUT DEVASTATING COSTS OF IRAQ WAR

Washington, DC—Senior Democrats sent the following letter today to Jim Nussle, Director of the Office of Management and Budget, after his own letter failed to address concerns Democrats’ had expressed to President Bush about the costs and consequences of the war in Iraq.  The authors – Senate Majority Leader Harry Reid; House Majority Leader Steny Hoyer; and Senator Charles Schumer and Representative Carolyn Maloney, the Chairman and Vice-Chair of the Joint Economic Committee – renew their request that Nussle or another Administration representative testify before Congress about the devastating human, military, economic and security costs of the war.

“You argue that the benefits of the war outweigh the high cost.  We strongly disagree,” the letter says.  “However, the American people deserve more than an exchange of letters: they deserve an open, honest dialogue.”


The text of the letter is below:


The Honorable Jim Nussle

Director, Office of Management and Budget

Washington, DC 20503


Dear Mr. Nussle:

Thank you for replying to our March 19th letter to President Bush.  In that letter, we requested that the President provide the Joint Economic Committee with an estimate for the current and projected future cost of the Iraq war and make a member of his Administration available to testify before us.

As you know, this is not the first time we have made a written request for an honest dialogue on the cost of the war.  For years, Democrats have been concerned that the war in Iraq is overburdening our military, weakening our economy and making us less secure.  Although we appreciate your reply, you did not provide the information we requested.  Just as troubling, you declined to make an Administration official available to testify before Congress on these matters.  The American people deserve both.

In your letter, you argue that whatever the cost of the Iraq war, it is a small price to pay to keep our country safe from terrorism.  Democrats agree that we must stop at nothing to keep our country safe, but there is no evidence that the war in Iraq has aided the war on terrorism.  To the contrary, the war in Iraq has compromised the fight against Al Qaeda by draining resources and military manpower and, according to a recent National Intelligence Estimate, by serving as a valuable recruiting tool for Al-Qaeda.  

Despite the heroic efforts of our troops in Iraq, there has been little progress in establishing a functioning independent government, levels of attacks and violence remain unacceptably high and the cost of the war for American taxpayers keeps rising with no end in sight.  President Bush’s recent announcement to abandon plans to reduce the number of U.S. troops in Iraq only serves to confirm this sad reality.

Equally disturbing, the Bush Administration has never been forthcoming with the American people on the cost of war in lives, treasure or impact on our national security.

The Bush Administration initially estimated that the war would cost about $60 billion.  In fact, the Administration has already requested more than 10 times that much – more than $600 billion – just to cover the costs of the operations and replacement of some of the equipment used in Iraq.  Last year, the Joint Economic Committee prepared a report showing that the full economic cost of the war will total $1.3 trillion by the end of this year.  This figure includes the “hidden costs” of deficit financing, the future care of our wounded veterans, and disruption in oil markets.  And some economists now predict that the total economic price tag for the war could reach $3 trillion to $5 trillion over the next decade if we remain in Iraq.

Regardless of which figure you choose, two things are clear: The funds used for the Iraq war are diverted from important national priorities.  And there has yet to be an accounting by the Administration of the cost of the war to our budget and to our economy. 

In your letter, you argue that the benefits of the war outweigh the high cost.  We strongly disagree.  However, the American people deserve more than an exchange of letters: they deserve an open, honest dialogue.  To that end, we renew our request that you or a representative of the Bush Administration be made available to testify before the Joint Economic Committee.  We look forward to receiving a long-overdue accounting of the current and projected budgetary and economic costs of the war in Iraq.  We hope you will agree that the American people, who are shouldering a heavy burden for the war, merit nothing less.

 

Sincerely,


Senator Harry Reid

Majority Leader

Representative Steny Hoyer

Majority Leader


Senator Charles E. Schumer                          

Chairman, Joint Economic Committee         

 

Representative Carolyn B. Maloney

Vice-Chair, Joint Economic Committee

Apr 16 2008

Congressional Democrats Discuss Impact of Iraq War on U.S. Economy, Urge White House to Reveal Their Cost Estimates

CONGRESSIONAL DEMOCRATS DISCUSS IMPACT OF IRAQ WAR ON U.S. ECONOMY, URGE WHITE HOUSE TO REVEAL THEIR COST ESTIMATES

Washington DC—Senate Majority Leader Harry Reid and House Majority Leader Steny Hoyer joined Senator Charles Schumer and Congresswoman Carolyn Maloney of the Joint Economic Committee today to discuss the impact of the Iraq war on the U.S. economy.  As the war in Iraq moves into its sixth year, there is still no clear end in sight.  Meanwhile, the U.S. economy continues to suffer the effects of record oil prices, job losses, inflation, and a deepening housing and credit crisis.  It is long past time for the Bush Administration to explain why the $12 billion it spends on a failed war policy every month is more important than the health care, education, housing relief, and infrastructure those resources can provide here at home. 

“President Bush’s mismanagement of the Iraq war and his stubborn refusal to change course have exacted tremendous costs on America ,” Reid said. “The American people deserve a full accounting of what the war has cost in terms of lives, our reputation abroad, our national security abroad and at home, and our economy; and they especially deserve to know the future costs of the Administration’s Iraq strategy going forward.  We call on the Administration to fulfill its obligation and provide the Congress and the public an honest assessment of the current and future budgetary and economic costs of the war in Iraq .”

Said Hoyer: “Millions of American families are hurting.  The Administration must not ignore them – not when it insists we spend billions more in Iraq .  It is time to change policy in Iraq , and devote the attention and resources necessary to turning our economy around.”

“We have always been aware of the high cost of this war in lives lost; but the costs of this war in dollars and cents is also far too high,” Schumer said.  “It is time for this Administration to give an answer to the American people – how much do they think this war will cost?  If they want to disagree with our estimates or with Dr. Stiglitz, fine – they should come and explain why.  But to simply pretend that the costs of the war don’t exist – that’s not acceptable to us or the American people.”

Said Maloney: “The Administration should stop stonewalling and send the President’s economic advisers to Capitol Hill to explain the impact of the Iraq war on our economy.  The American people are only getting half of the story, at best.  The full economic costs of the war – including the economic impact of deficit financing, future care of our wounded veterans, and disruption in oil markets – are running twice as high the enormous federal spending.  ‘Staying the course’ in Iraq threatens to cost the economy more than $3 trillion over the next decade.  By the end of the year we will have over $1 trillion of sunk costs, so without a rapid draw down in troops we face what could be a $2 trillion decision on our future commitment in Iraq .  The Bush Administration owes Congress and the American people a full accounting of the current and future costs of this war.”

###

The Economic Opportunity Costs of the War in Iraq

     For ONE DAY of spending in Iraq – we could enroll an additional 155,350 children in Head Start per year; enroll over a million for a week of spending in Iraq; and enroll over 4.7 million for a month in Iraq.

     For ONE DAY of spending in Iraq – we could put an additional 9,100 police officers on the streets per year; hire more than 64,000 for a week’s spending in Iraq; and hire 278,000 for a month in Iraq. 

     For ONE DAY of spending in Iraq – we could make college more affordable for 152,900 students through Pell Grants per year; 1,073,400 more Pell Grants for a week’s spending in Iraq; and over 4.5 million for a month’s funds spent in Iraq.

     For ONE DAY of spending in Iraq – we could help over 155,000 American families to keep their homes with foreclosure prevention counseling this year; for a week in Iraq we could help over a million families; and for a month in Iraq, we could probably erase the foreclosure crisis entirely by helping more than 4.7 million families keep their homes.

     For ONE DAY of spending in Iraq – we could provide health insurance for over 330,000 low-income children through CHIP per year; for a week we could get more than 2.3 million kids into CHIP; and for a month, we could get health care for over 10 million American kids.

     For ONE DAY of spending in Iraq – we could hire another 11,000 Border patrol agents per year; for a week we could put almost 88,000 new border patrol agents on duty; and for a month’s spending in Iraq, we could put more than 337,000 agents on the borders.

Apr 14 2008

On Eve of Tax Day, JEC Analysis Reveals Taxpayers Would Save Over $1.2 Billion with Free E-Filing

ON EVE OF TAX DAY, JEC ANALYSIS REVEALS TAXPAYERS WOULD SAVE OVER $1.2 BILLION WITH FREE E-FILING

Schumer Announces Bill Providing Free Electronic Tax Filing For All Taxpayers Directly With IRS to Save Taxpayers Billion Dollars and Reduce Errors Dramatically from Standard Paper Filing

IRS Agreements with Software Companies Allows Them to Monopolize E-filing Market; Will Prevent IRS from Reaching E-Filing Goal of 80% by this Year

Washington, DC:  On the eve of Tax Day, U.S. Senator Charles E. Schumer, Chairman of the Joint Economic Committee (JEC), released a state-by-state analysis revealing that free e-filing would save taxpayers and the federal government billions of dollars and reduces tax return errors dramatically.  Online tax filing is clearly the easiest, cheapest, and most efficient way for Americans to pay their taxes, especially when this year the Internal Revenue Service (IRS) projects that 62 percent of the 138 million U.S. taxpayers will file electronically.  However, because the IRS made exclusive deals with private software companies, taxpayers are forced to pay to file their taxes electronically. 

"The bottom line is that the IRS is imposing an additional ‘tax’ on people paying their taxes,” Schumer said. “The current system forces millions of Americans to pay a fee for the ‘privilege’ of filing their taxes, even though e-filing is cheaper for the IRS to process.

The Joint Economic Committee analysis includes a state-by-state breakdown for how much taxpayers spent in 2007 to file their taxes online and also charts the progress of e-filing from 1995-2007.   The JEC e-filing fact sheet can be found here. 

Though filing electronically saves the IRS millions of dollars –fees are imposed on taxpayers to do so; while paper returns which are more expensive for the IRS to process they do not have an additional charge. The IRS made agreements with paid tax preparers and software companies to not offer free filing because the companies were concerned it would hurt their business. In exchange for the IRS staying out of the software business the companies agreed to offer free electronic filing for people whose income is under $54,000. Everyone else has to pay to e-file by going through a third party, even though the e-filing system saves the taxpayer and the government money. Even those who qualify for free filing must go through an incredibly complicated system to e-file and may be pushed into buying other services for additional fees from third party preparers.

“I’m going to introduce a bill that will eliminate the tax on taxes that millions of Americans are now paying, and impose a $50 penalty per offense on any company that charges a tax filing fee to consumers.” Schumer stated. 

Facts about E-Filing:

Free E-filing Saves Money:  Taxpayers can save over $1.2 billion annually in e-filing fees if taxpayers earning more than $52,000 could e-file for free.  For the IRS, there are enormous cost savings from e-filing. While processing each paper return costs $2.50, an e-filed return costs only $0.30.

E-filing Reduces Errors:  The IRS finds roughly 1 error in every 100 returns filed electronically (regardless of whether the return was prepared professionally of self-prepared by the taxpayer), compared to about 1 error in every 5 paper returns.

E-filing Is Easy:  Filing income tax returns electronically also has significant advantages for taxpayers. Filing online is more convenient, return processing is faster, and refunds can be sent out more rapidly.

The JEC e-filing analysis can be found here

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
 #          #          #

Apr 14 2008

JEC Report Shows Extending Bush Tax Cuts Won’t Stimulate Economy or Benefit Most American Families

JEC REPORT SHOWS EXTENDING BUSH TAX CUTS WON’T STIMULATE ECONOMY OR BENEFIT MOST AMERICAN FAMILIES

Unpaid for Tax Cuts Disproportionally Benefit Top 1% of Households Are 100 Times Bigger than Cuts for Middle Class Families and Leave Massive Budget Deficits for Future Generations

During Recession, Discussion Should Focus on Broadly Helping Middle Income Families Immediately, Not Bigger Future Tax Breaks for the Wealthy

Washington, D.C. – Senator Charles E. Schumer, Chairman of the Joint Economic Committee (JEC), and Rep. Carolyn B. Maloney, Vice Chair of the JEC, released a report showing that the Bush tax cuts have not benefitted middle income families and have saddled future generations with tremendous debt.  The Bush tax cuts, which disproportionately benefit the top one percent of households, were initially justified with a series of dubious claims about their economic effectiveness.  But the JEC paper, entitled Extending the Bush Tax Cuts Is the Wrong Way to Stimulate the Economy, shows that the President’s tax policy has done little to stimulate the economy and guard against recession.  The Bush tax cuts have had a negligible or negative impact on annual income growth for the vast majority of U.S. households. 

“While the economy is running on fumes and Americans are losing their jobs, the first and last words out of this administration on economic policy are tax cuts.  Over the last seven years, the Bush tax cuts have benefitted very few at the expense of millions of middle and low income families and future generations.  For the last seven years, the President has had his cake and gotten to eat it too – tax cuts for the top one percent paid for with borrowed money,” Schumer said.  “Democrats want to extend targeted tax relief to the middle class, but permanently extending the Bush tax cuts is not in the cards.”

“The evidence is crystal clear: extending Bush’s tax cuts is the wrong way to stimulate our troubled economy,” Maloney said. “The Bush administration claimed that their tax cuts would drive investment, creating growth in wages and employment, but instead economic performance has been lackluster at best. To make matters worse, the President has mortgaged our children’s future by funding the tax cuts using borrowed money. Democrats in Congress want to target tax relief to families who have not shared in the gains from the Bush economy and are now struggling to make ends meet in the face of an economic downturn. Our plan extends middle-income tax breaks, including the child tax credit and relief from the marriage penalty and the Alternative Minimum Tax.  I hope the President will join us in focusing on measures that would have a real impact on propelling us out of this recession: extending unemployment benefits and stemming the mortgage crisis to keep people in their homes.”

Facts about the Bush tax cuts:
• Through 2008, the government has borrowed $1.6 trillion to pay for the Bush tax cuts.
• Even the Chairman of the President’s Council of Economic Advisors said he “would not claim that tax cuts pay for themselves.”
• In 2007, one third of the total benefits of the tax cuts went to the top one percent of households.
• Approximately 20 percent of total benefits went to 0.3 percent of households earning $1 million or more per year. These households received an average tax cut 103 times larger than that of middle-income households.
• Investment and economic growth since the 2001 and 2003 tax cuts have been lower than average, indicating that the tax cuts have not had strong economic effects.

If the Bush tax cuts were made permanent:
• It would cost the federal government an additional $3.4 Trillion over the next decade, if the funds were borrowed.
• It would cost the government three times more than the amount necessary to close the Social Security funding gap through 2075.

The President’s tax cuts may actually end up reducing low and middle class incomes:
• These tax cuts are financed with borrowed money – a loan from future generations to today’s taxpayers. Depending on how this loan is repaid, the net effect of fully-funded tax cuts would likely reduce most middle class incomes.
• Administration estimates of the long-term impacts of the tax cuts assume that in the long run, tax cuts will eventually be paid for through large cuts in government spending. Unlike the tax cuts, Federal spending provides more income to the middle class than the wealthy.
• If this tax cut-related debt is repaid by across-the-board spending cuts, the after tax income for 75 percent of American households will be reduced. 

The paper can be found here.

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

# # #

Apr 10 2008

Coast to Coast, Declining Home Prices and Rising Foreclosures Will Cost U.S. Families Over $2.6 Trillion

COAST TO COAST, DECLINING HOME PRICES AND RISING FORECLOSURES WILL COST U.S. FAMILIES OVER $2.6 TRILLION

As Senate Passes Legislation to Address the Housing Crisis and White House Threatens Veto, Analysis by Joint Economic Committee Shows Steep and Ongoing Costs of Housing Crisis  

Washington, D.C. – While the White House has threatened to veto a number of housing bills being debated in Congress, including the recently passed Senate housing bill intended to aid families who are in danger of losing their homes, Senator Charles E. Schumer, Chairman of the Joint Economic Committee (JEC), released reports showing that the bursting housing bubble could cost over $2.6 TRILLION in household wealth from record numbers of subprime foreclosures and falling home prices.

The state-by-state report was prepared by the majority staff of the Joint Economic Committee and shows that nationally, home prices will decline over 11% from 2007-2009 and families in a majority of states will lose over $2.6 Trillion in housing wealth in that same period.  Moreover, an additional 1.2 million families who took out subprime mortgages stand to lose their homes to foreclosure in 2008 and 2009 alone. 

Schumer said, “The White House continues to ignore the 800 pound gorilla in the room – the nation’s foreclosure and housing crisis is the central cause of this recession; and unless we address it quickly, millions of American families will continue to see their economic fortunes decline.  Families stand to lose over $2.6 trillion in housing wealth and in many cases and another 1.2 million families will likely lose their homes.”

The state by state charts can be found at www.jec.senate.gov.

 

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

#          #          #

Apr 08 2008

JEC Report Reveals Extension of Unemployment Insurance Would Ease Pain of Unemployment, Recession

JEC REPORT REVEALS QUICK EXTENSION OF UNEMPLOYMENT INSURANCE WOULD EASE PAIN OF RISING UNEMPLOYMENT AND RECESSION

Unemployment Benefits Critical in Helping Families Deal with Three Consecutive Months of Job Losses and 300,000 Total Lost Jobs Since November 2007

Evidence Shows Extension of UI is Prudent Given Previous Economic Circumstances Under Which Benefit Was Extended to the Unemployed

Washington, D.C. – The Joint Economic Committee (JEC), chaired by Sen. Charles E. Schumer, released a report today, requested by Vice Chair Rep. Carolyn B. Maloney, calling for the extension of unemployment insurance benefits to combat the contracting labor market.  Friday’s release of the Bureau of Labor Statistics Employment Situation Report revealed an jump in the unemployment rate and the third consecutive month of job losses for the first time in five years.  With the number of UI beneficiaries exhausting their claims already on the rise and no end in sight to the current economic downturn, the report argues that past Republican obstructionism must be overcome in order to provide extended UI benefits for those in need.

“Labor market conditions are already as bad as or worse than when unemployment insurance benefits were extended in previous recessions, so there is no reason to wait to provide additional benefits to unemployed workers now.  Workers eligible for these benefits lost their jobs through no fault of their own - their plant closed or their employer went out of business because of deepening economic troubles.  Extending unemployment benefits would help families continue spending on basic living expenses and simultaneously provide an extra boost to our weakening economy,” Maloney said.

Schumer stated, “This administration has been whistling a happy tune while jobs have disappeared, home prices have plummeted, and the entire economy is teetering on the brink of recession.  Economists agree that extending unemployment insurance benefits gets the biggest economic bang for the buck in helping workers and their families weather this financial storm.  The bottom line of today’s paper is that extending unemployment insurance is critical and it is long-passed due.” 
 
Evidence is mounting that the employment picture is worse than when Unemployment Insurance (UI) was extended during previous recessions:
• Long-term unemployment is at recession levels and already higher than when Congress extended UI benefits in the 2001 and 1990-91 recessions.
• 1.3 million workers have been out of work and searching for a new job for at least six months.
• Unemployed individuals claiming UI benefits recently rose above 400,000 per week, a level at which economists typically consider the labor market to be in a recession.
• The share of the U.S. population with a job never fully recovered from the 2001 recession and is lower now than it was last time UI benefits were extended.
• The share and number of UI beneficiaries exhausting their benefits is higher than at the beginning of the 2001 and 1990-91 recessions. 
• More than one-in-three unemployed workers (35.6 percent) exhausted their UI benefits last quarter.
• Over 1.3 million workers will exhaust their UI benefits between January and June 2008.
• 10 states and the District of Columbia have exhaustion rates higher than 40 percent (FL, NJ, CA, NE, AZ, NM, NC, CO, LA and IN).

The JEC’s paper suggests three specific ways to expand unemployment insurance:
• Provide extended benefits to workers whose regular unemployment compensation has expired;
• Supplement the amount of benefits paid to unemployment compensation recipients; and
• Modernize the UI system to cover more unemployed workers, including more part-time and low-wage workers.

“I applaud Speaker Pelosi and Majority Leader Reid for proposing additional measures to strengthen our economy, and for urging the President to work with Congress to build on the stimulus plan.  We need to come together to solve our nation’s serious economic challenges.  With so many Americans now struggling to find work and get back on their feet, extending unemployment benefits should be a top priority,” Maloney concluded.

The report can be found here.

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

# # #

Mar 31 2008

Schumer on Paulson Plan and Jackson Resignation

SCHUMER ON PAULSON PLAN AND JACKSON RESIGNATION

U.S. Senator Charles E. Schumer released statements on Monday regarding Secretary Paulson's announced blueprint for overhauling the U.S. financial regulatory system and the resignation of Housing and Urban Development Secretary Alphonso Jackson:

Schumer on Paulson's Plan:
"This blueprint is a good foundation for updating the regulation of U.S. financial markets. Secretary Paulson is right that unifying our regulatory system is necessary in order to operate more intelligently and efficiently in the globalized financial system. If anything, the Treasury plan does not consolidate redundant agencies enough and a single regulator may be a better approach.  
 
"But certain important pieces are not included in Secretary Paulson's plan. And I strongly disagree with the Treasury Secretary when he says the current regulatory framework is not at fault for the unrest troubling our economy. The unregulated corners of our economy did much to contribute to the meltdown in our housing market and the accompanying spillover to our financial markets. The havoc wrought by independent mortgage brokers, who fueled the housing bubble, and credit ratings agencies, who rubber-stamped securities with no questions asked, certainly fueled the economic crisis we have now. The Administration's 'deregulation-above-all-else' attitude helped cause the problems we now face.
 
"If we focus only on consolidation -- and don't also adopt a careful, but more pro-regulation, approach -- then we will have approached this modernizing task with too much of a pre-Bear Stearns mindset."
 
Schumer on Jackson resignation:
“While he’ll have to work out his problems, I appreciate the hard work Secretary Jackson has put into the fight to save affordable housing in New York."  
 

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
#    #    #