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AFL-CIO Critique of President Bush's Economic Plan October 22, 2001 Dear Representative: The U.S. House of Representatives will soon consider H.R. 3090, the Economic Security and Recovery Act. This bill would fail to provide any meaningful relief to the 528,000 workers who have been laid off since the September 11th terrorist attacks, and it would do little to help stimulate our ailing economy. As a result, the AFL-CIO strongly urges you to vote against H.R. 3090 and to vote no on the rule if a more balanced and responsible substitute is not made in order. Although our nations unemployment rate has now reached its highest level in nine years, Congress has yet to provide any relief to our nations laid-off workers and their families. In fact, Congress has twice rejected attempts to provide assistance to the nearly 140,000 aviation workers who have been laid-off since September 11th, even as it rushed through a $15 billion airline bailout package. Congress has historically responded to severe economic downturns by adding additional weeks of extended unemployment benefits for workers throughout the country. In fact, during the 1990-1991 recession, Congress extended UI benefits nationally on four separate occasions. H.R. 3090 would blatantly disregard these Congressional precedents by simply giving states $9 billion worth of block-grant funds that they may or may not use to extend or increase unemployment benefits for laid-off workers. There is no guarantee that the block grant funds would be used for additional worker benefits. CBO forecasts that states would use as much as 85% of their block grant funds to reduce employer taxes or to replace state spending for unemployment benefits. H.R. 3090 would also fail to provide laid-off workers with adequate health care coverage. The average monthly COBRA premium of $600 would be out of reach for most laid-off workers who are barely making ends meet with average monthly UI benefits of $868. Although H.R. 3090 would provide states with $3 billion worth of health care block grant funds, this funding level would not be enough to provide a useful subsidy to even half of the workers who have been laid off since September 11. Rather than including temporary measures to help laid-off workers and stimulate the economy, this legislation would use $162 billion over the next ten years primarily to pay for more tax cuts for large corporations and wealthy individuals. According to Citizens for Tax Justice, this legislation would provide 41% of its individual income tax benefits to the wealthiest 1% of taxpayers. These individuals, who make $384,000 or more annually, would receive an average benefit totaling almost $27,000 in 2002. While H.R. 3090 is comprised mostly of very expensive tax cuts for corporations, the repeal of the alternative minimum tax (AMT) alone would provide more than $100 million each to a dozen Fortune 500 corporations. Rep. Rangel will be offering a substitute amendment to H.R. 3090 in the Rules Committee that would provide real and immediate support to laid-off workers. This substitute would provide temporary federal aid for one year to extend unemployment compensation benefits for at least an additional 13 weeks for all dislocated workers who exhaust their regular benefits. It would also add a modest additional weekly benefit for all unemployed workers, pay for unemployment benefits for part-time and low-wage workers who have paid into the unemployment system but do not qualify for aid in many states, and provide the necessary funds to help state unemployment systems cope with the anticipated surge in claims. This substitute would also provide temporary assistance to help laid-off workers maintain their health insurance by providing a federal subsidy for COBRA premiums and establishing a temporary state Medicaid option for workers with no employer-provided health care coverage. In short, the Rangel substitute is preferable to H.R. 3090 for three important reasons. It would provide immediate relief to laid-off workers and the economy by providing purchasing power to those individuals who most need assistance and are certain to spend it quickly. Unlike H.R. 3090, the proposed substitute would also promote long-term economic stability and national security by making targeted investments in our nations infrastructure. Finally, the Rangel substitute would pay for itself by delaying the top income tax rate cut approved earlier this year, which benefits our nation's wealthiest individuals. For all of these reasons, the AFL-CIO strongly urges you to vote against H.R. 3090 and the rule for this legislation if the proposed Rangel substitute is not made in order as an amendment.Sincerely, William Samuel, Director
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Workers
Lose to Corporations as Congress Passes Economic Stimulus Bill by
Slim Margin Congressional Action Page For phone numbers of your representative. 10/24/01 Economic Stimulus Bill Scheduled Read the AFL-CIO critique of President Bushs economic stimulus package. |
