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America is rapidly losing jobs. The U.S. Labor Department reported that employers cut 159,000 jobs in September, the ninth straight month in which more jobs were lost than created. Our country has lost 760,000 payroll jobs so far this year. The unemployment rate remains at 6.1 percent, the worst jobless rate in five years. 9.5 million Americans are now unemployed; 2.2 million lost their jobs in the last 12 months. [Bureau of Labor Statistics [1]]
For those who remain employed, real wages are declining. Companies are cutting workers’ hours. In July, average weekly hours worked slipped to the lowest level since November 2004 and weekly earnings grew at the lowest rate since September 2005. [Economic Policy Institute [2]] At the same time, costs are rising much faster than wages—inflation hit a 27-year high in June. Inflation is eating up the small economic gains made by any increases in demand. [Market Watch [3]]
While Americans struggle to make ends meet, big oil companies are raking in windfall profits. The six biggest oil companies reported over $50 billion in combined profits for the 2nd quarter of 2008. Called “gargantuan, record-breaking earnings” by the Associated Press, this is their largest combined profit in history. Exxon Mobil’s $11.6 billion quarterly profit was the largest in the history of any American company. [Associated Press [4]]
The McCain-conservative economic plan will help big corporations, not families. The McCain-conservative proposal to “create jobs” is simple—cut taxes for big corporations. McCain would cut the corporate tax rate from 35 to 25 percent and give corporations larger tax deductions. [McCain campaign [5]] Big oil companies would receive an additional $3.8 billion every year under his plan—$1.2 billion a year for Exxon Mobil alone. [Center for American Progress Action Fund [6]]
We’re in a recession, and Washington is doing nothing about it. Our economy doesn’t work for working Americans, and the conservative program of cutting taxes for the rich won’t fix anything. In the short term, we need to stimulate the economy to get us out of this recession. In the long term, we need to build a society where hard-working Americans can earn a decent living, obtain high-quality health care, access world-class education for their children, and retire in security.
An economic growth package should target Americans who are struggling the most. The conservative idea that cutting corporate taxes will trickle down to benefit average Americans is just absurd. We should stimulate the economy by directing funds where they’re needed—to families who are squeezed by high gas prices, to state governments which are struggling to pay for safety net services, and to projects that create jobs repairing America’s bridges, roads, and schools.
Barack Obama has proposed a sensible, cost-efficient plan to stimulate the American economy and help families cope with economic challenges.
Provide families with a $1,000 stimulus check ($500 for individuals). This is designed to help offset the recent rise in gas prices.
Provide $25 billion to state governments to fight the affects of recession, and another $25 billion to repair crumbling bridges, roads, and schools. This will help offset the states’ cumulative budget gap of over $40 billion and allow them to continue providing vital services to Americans hurt by the economic downturn. [National Council of State Legislatures [7]] It will also make our economy more competitive by fixing our national infrastructure. The $50 billion investment will save more than one million jobs.
Fund most of the economic growth package with a windfall profits tax on big oil companies. There is nothing fair, or earned, about the record-breaking profits being taken by big oil companies. They did not become more efficient; they did not deliver a better product. What’s fair is to return those ill-gotten gains to the consumers who are being overcharged at the gas pump.
1825 K Street, NW, Suite 400, Washington, DC 20006
202-955-5665 (tel) | 202-955-5606 (fax) | www.ourfuture.org
Links:
[1] http://www.bls.gov/news.release/empsit.nr0.htm
[2] http://www.epi.org/content.cfm/webfeatures_viewpoints_testmony_bernstein_squeeze
[3] http://www.marketwatch.com/News/Story/worst-inflation-27-years-trumps/story.aspx?guid={5A153311-54CC-4AEA-A26D-09F2B841A4AE}
[4] http://www.latimes.com/business/nationworld/wire/ats-ap-earns-oilaug01,1,3808398.story
[5] http://www.johnmccain.com/Issues/JobsforAmerica/taxes.htm
[6] http://www.americanprogressaction.org/issues/2008/pdf/oil_tax.pdf
[7] http://ncsl.org/programs/fiscal/sbu200806.htm
[8] http://www.epipolicycenter.org/blm-stagnant_wages_and_rising_inequality.pdf