Skip to main content

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


A Good Job is Hard to Find: Evidence for Extending Unemployment Benifits Already Exists

The March employment report showed widespread weakness in the labor market including, for the first time since 2003, a third straight month of falling employment. After months of job losses being contained in sectors associated with the housing bust, the economy is now showing losses in a wide array of industries. At the same time, unemployment is rising and jobs are harder to find. The labor market is trending downwards: in testimony before the Joint Economic Committee on April 4, 2008, the Commissioner of the Bureau of Labor Statistics reported that “labor market conditions started to weaken more than a year ago.” Based on the labor market data, the slowdown in economic growth for the fourth quarter, falling home prices, and the ensuing crisis in the credit markets, most economists now believe we are in a recession.

New State by State Foreclosure Analysis

Chairman of the Joint Economic Committee (JEC), released a state-by-state analysis showing that subprime mortgages in foreclosure have increased from the third to the fourth quarter last year in EVERY state, and prime mortgages in foreclosure have increased in all but two states (Montana and South Dakota).  The JEC analysis of the Mortgage Banker's Association record-setting foreclosure data in the fourth quarter of 2007 is attached.

Paid Family Leave at Fortune 100 Companies: A Basic Standard but Still not the Gold Standard

Employers and employees are searching for ways to balance the competing demands of work and family. As a guide for policymakers, this report examines how firms design their paid leave policies. The majority staff of the Joint Economic Committee asked Fortune 100 companies about the length of paid leave that they provide for new parents. Among the firms that responded, about three-quarters offer mothers a specific parental leave program, either through paid family or disability leave, and the median length of leave for mothers is six to eight weeks.  However, only one-third of firms report that they offer fathers paid parental leave and the median length of leave for fathers is only two weeks.

High Oil Prices Have Significant Effects on
Consumers and the U.S. Economy
This analysis estimates the impact of sustained high oil prices on consumers and the U.S. economy. Since 2002, real oil prices have risen dramatically. Recently, oil futures traded for more than $100 a barrel.  Crude oil prices for January 2008 were $92.95/barrel, and monthly prices are rapidly closing in on the all-time inflation-adjusted high of $98.94/barrel, which was reached in April 1980.  There are numerous causes for the recent rise in oil prices, including decisions made by OPEC and other oil-producing countries, stagnant production in Iraq, and ongoing concerns about political and supply stability in a number of oil-producing countries. However, it is the longer-term structural factors in the rise in oil prices, most notably greatly increased demand in developing countries such as China and India, which have led many experts to believe that we are likely to have sustained high oil prices for the foreseeable future.

President’s Economic Report Insists Economy is Sound, Despite Serious Worries in Housing, Credit, Jobs Markets

Senator Charles E. Schumer and Representative Carolyn B. Maloney, the Chairman and Vice Chair of the Joint Economic Committee respectively, responded to the 2008 Economic Report of the President (ERP), delivered to Congress today. The report, authored by the President’s Council of Economic Advisers, summarizes the Administration’s views on the state of the United States economy. The report reviews the last year of economic data and projects the economic health of our country in the future.

For the full text of this report, please click on the file listed under "Related Resources."

On February 4 the Bush Administration released its budget for Fiscal Year 2009. The Joint Economic Committee has analyzed what this budget means for some important and popular programs for each of the 50 states plus Washington D.C. While there are thousands of programs that may have been slashed, level-funded, eliminated, or bolstered, the JEC has chosen a handful to show the big impact these cuts have on each state.

President Bush's Dismal Economic Record

On Monday, January 28, President Bush will deliver his annual State of the Union address to Congress. As he has in the past, President Bush is likely to claim that the policies of his administration have helped strengthen the economy. But President Bush’s claims are misleading. President Bush has turned a federal budget surplus into record deficits and is tied with his father for the worst job creation record of any President in 70 years. Under President Bush’s failed economic policies, the unemployment rate is now increasing and the number of unemployed Americans is now 1.6 million greater than when he took office. At the same time, household income has declined for all but the wealthiest Americans after accounting for inflation, and America’s middle class has been squeezed by rising energy, health care and education costs. If current economic trends lead to a recession, as many economists are currently predicting, President Bush will become the first President to preside over two recessions since the Nixon administration.

For the full text of this report, please click on the file listed under "Related Resources."

Worsening Economic Conditions Will Increase Demand for the State Children's Health Insurance Program and Medicaid

Worsening economic conditions will likely create substantial increases in demand for enrollment in states’ Medicaid and Children’s Health Insurance Program (CHIP) programs over the next few years, even apart from the normal growth trend in public coverage. If employment growth falls to the levels seen following the 2001 recession, then demand for these programs will grow as the economy slows.

• Between 700,000 and 1.1 million additional children will enroll in Medicaid/CHIP each year due to slowing employment growth alone.

• Up to 1.5 million total additional persons will enroll in Medicaid each year due to slowing employment growth alone.

Increases in Medicaid/CHIP enrollment combined with federal funding cuts proposed by President Bush in the Medicaid and CHIP programs could create additional pressure on state budgets that are already strained by the weak national economy and the worsening housing crisis.

Nearly every state is required to balance its budget. In the face of the economic slowdown, state governments will therefore face a difficult choice between cutting back on health insurance for children, implementing cuts in other budget areas, or raising taxes. If proposed Administration regulations are implemented, the additional cuts in Federal support will make the problem even more severe.

For the full text of this report, please click on the file listed under "Related Resources."

The President says his policies are working to make the economy strong and that all Americans are benefiting, but the facts show an economic record that has left the vast majority of American families behind. During the last six years, the economy has performed in a lackluster fashion, without strong growth in output, investment, or employment. America’s working families have seen little or no improvement in their standard of living during this time. The recovery from the recession in 2001 has been very weak, and household income is still substantially below its pre-recession peak of the 1990s. Further, the number of households with employer-provided health insurance has declined. In short, the economic indicators that matter most to the typical family are moving in the wrong direction.

By almost every measure, the Bush Administration’s economic policies have produced a recovery that has been remarkably weak. The President’s ill-designed tax policy has added to the deficit and exacerbated income inequality. At the same time, programs that benefit middle- and lower-income families have been cut back. Dramatic increases in defense spending for the war in Iraq have increased the budget deficit, which will have an impact on future generations. Instead of focusing spending increases on areas that would help economic growth in the long term, such as repairing and modernizing America’s transportation and urban infrastructure, the administration financed a war that has already produced total economic costs exceeding a trillion dollars.

The subprime mortgage crisis, which may lead to millions of Americans losing their homes, and the subsequent credit crunch have weakened an already soft housing market. The deteriorating housing market threatens to have pronounced negative impacts on growth. The vast majority of American families have not benefited from the economic gains we have seen so far and now there are strong indications that a downturn may be just around the corner.

So far, the Administration has been slow to change course and are satisfied with the status quo. The country needs a change in direction to get our economy back on the right track and to ensure that all American families share in our nation’s growing prosperity.

For the full text of this report, please click on the file listed under "Related Resources."

Analysis of the Energy Bill Tax Provision 199

At the request of Senators Jeff Bingaman, Chairman of the Senate Energy and Natural Resources Committee, and Max Baucus, Chairman of the Senate Finance Committee, the JEC examines the impact of denying the Internal Revenue Code (IRC) Section 199 manufacturing deduction to major integrated oil and gas producers (while simultaneously freezing the deduction for other oil and gas producers) on consumer prices of oil and natural gas. The report finds that the proposed modification of this deduction would have a negligible effect, if any, on consumer energy prices. This tax provision will likely be included in a larger Senate energy bill as a way to finance renewable and energy conservation efforts.

Key Points

• Because the removal of the tax deduction does not affect production decisions in the near term, removing or modifying the tax deduction will have no effect on consumer prices for gasoline and natural gas in the immediate future.

• In the long run, the removal of the tax deduction is unlikely to have any effect on consumer prices for oil and gas. Oil prices are more than three times higher than they were when the tax deduction was implemented in 2004 – and those high prices are an incentive for investors to continue to invest in oil and gas companies. Although natural gas prices are not significantly different from their 2005 levels, natural gas prices rose significantly over the last decade and those higher prices also provide good incentives for investors.

For the full text of this report, please click on the file listed under "Related Resources."