The State of the Union Bush Forgot to Talk About

I listened intently to President Bush's State of the Union speech. Frankly, I had a hard time understanding what country he was talking about, what reality he was talking about. Certainly, if the "state of the union" refers to what is happening to the shrinking middle class of this country, and how we as a people are doing, the president had almost nothing to say that rang true. In fact, the speech just reminds us once again how far removed from the reality of ordinary life this president is, and how little he and his administration know about what is going on with the vast majority of Americans.

The president said that "in the long run, Americans can be confident about our economic growth." I wish that was true. Unfortunately, Since President Bush has been in office it is important to understand that:

-Nearly five million Americans have slipped out of the middle class and into poverty. Amazingly, the poverty rate is higher today than it was during the last recession in 2001.

-Median household income for working-age Americans has declined by almost $2,500; and overall median household income has gone down by nearly $1,000.

-8.6 million Americans have lost their health insurance.

-Over three million manufacturing jobs have been lost, including more than 10,000 in my State of Vermont.

-Three million workers have lost their pensions, and about half of American workers in the private sector have no pension coverage whatsoever.

-The annual trade deficit has more than doubled, and the national debt has gone up by $3 trillion.

-Health care premiums have increased 78 percent; the prices of gas and heating oil have more than doubled; and college education costs have increased by over 60 percent.

In addition, to those statistics, let me just mention a few more:

-Last November, the personal savings rate was below zero, something that up until 2005 hasn't happened since the Great Depression.

-According to the U.S. Department of Agriculture, 35.5 million Americans struggled to put food on the table last year and the number of the hungriest Americans keeps going up.

-The average college student has racked up nearly $20,000 in debt upon graduation and some 400,000 qualified high school students don't go to college in the first place because they can't afford it.

-Home foreclosures are the highest on record turning the American dream of homeownership into an American nightmare for millions of Americans.

-The number of working families paying more than half of their incomes on housing has increased by 72 percent over the past decade.

-The United States has the highest rate of childhood poverty, the highest infant mortality rate, the highest overall poverty rate, the largest gap between the rich and the poor the largest incarceration rate and is the only country not to have a national health care program of any major developed country on earth.

-And, the number of college graduates earning poverty level wages has more than doubled over the past 15 years.

In other words, not only is the middle class being squeezed by skyrocketing prices; the middle class is actually shrinking and poverty is increasing.

Meanwhile, the wealthiest people in our society have not had it so good since the 1920s.

Income inequality is on the rise. According to the latest figures from the IRS, the top 1 percent earned more income in 2005 than the bottom 50 percent, and the national share of income going to the wealthiest Americans is higher than at any time since 1929.

Perhaps even more disturbing is the unequal distribution of wealth.

According to Forbes magazine, the collective net worth of the wealthiest 400 Americans increased by $290 billion last year to $1.54 trillion. In addition, the top one percent now owns more wealth than the bottom 90 percent.

What are the super-wealthy doing with their money?

As Robert Frank of The Wall Street Journal has pointed out in his book Richistan, the super wealthy, those worth between $100 million to $1 billion, spent an average of $182,000 on wrist watches; $311,000 on automobiles; $397,000 on jewelry; and $169,000 on spa services last year alone.

The middle class is shrinking, poverty is increasing, and the wealthiest Americans have not had it so good since the 1920s. That is the state of our economy.

I order to protect the interests of the sinking middle class the federal government needs a change in direction in almost every area of public policy.

We must start by passing an economic stimulus package as soon as possible.

Now, I am pleased that the leadership in the House was able to negotiate an economic stimulus package with the White House. I am also pleased that the Senate Finance Committee will be marking-up a different economic stimulus bill that improves the House version by including unemployment insurance; tax rebates to senior citizens; and equal rebates for Americans paying payroll taxes.

These are all good and important steps to be taking. I commend Majority Leader Reid, Finance Chairman Baucus and Speaker Pelosi for their outstanding work on this issue.

But, this package could and should be improved even more.

In my opinion, for an economic stimulus package to be most successful, we must do three things:

1) We must provide help to those most in need, particularly senior citizens on fixed incomes, low-income families with children and persons with disabilities;

2) We must strengthen the middle class; and

3) We must put Americans back to work at good paying jobs rebuilding our crumbling infrastructure: our roads, bridges, schools, homes, health centers, sewers, and other important needs.

If we fail to pass an economic stimulus package that does not accomplish all three of these goals, we will have missed out on an important opportunity to strengthen our economy.

Here is what I believe we should do.

First, I would increase the economic stimulus package from $150 billion to $175 billion.

The next thing we should do is to reduce the business tax breaks on equipment purchases by 50 percent or roughly $25 billion. These tax breaks are referred to as bonus depreciation. It has been argued that businesses need these tax breaks to buy more equipment, but the experts tell us that businesses will be buying this equipment regardless of whether these tax breaks are signed into law or not. According to Mark Zandi with Moody's, for every $1 the government provides for bonus depreciation, it would only add 27 cents to GDP. In other words, it would provide very little stimulus.

If we did these two things: increase the overall economic stimulus package by $25 billion; and cut the bonus depreciation tax break by 50 percent, that would leave us with about $50 billion.

What could we do with this $50 billion? We could complete the picture. We could put Americans to work at decent paying jobs; we could help those most in need; and we could strengthen the middle class. Those are the three pillars I believe should be included in any economic stimulus package.

Specifically, I believe we should provide $5 billion for an expansion of the Food Stamp program. The Congressional Budget Office and other experts have indicated that such an increase would be one of the most effective ways to stimulate the economy. For every $1.00 invested in the Food Stamp Program, we would add $1.73 to GDP. More importantly, these benefits would go to the Americans who have been hit the hardest in our economy.

What else could we do?

We could provide $3.62 billion in home heating assistance for senior citizens on fixed incomes, low-income families with children and persons with disabilities through the Low Income Home Energy Assistance Program (LIHEAP). The price of energy is skyrocketing. People in my State of Vermont and all over this country are paying record prices to heat their homes this winter. In the richest country on the face of the earth, we must ensure that no-one goes cold this winter.

Including Food Stamps, LIHEAP and unemployment benefits in the economic stimulus package is not only the right thing to do in terms of stimulating the economy, it is the moral thing to do. We cannot turn a blind eye to those most in need.

In addition, with unemployment rising and our infrastructure crumbling, we could address both of these concerns by providing $16 billion to repair our schools, bridges, roads, sewers, rails, ports and airports. We could also put people to work weatherizing nearly 100,000 homes; expand our health delivery system by increasing funding for Community Health Centers, and help veterans with disabilities retrofit their cars and refurbish their homes.

States, localities, economists and other experts have identified thousands of projects throughout the country that could not only use this money, but spend it quickly.

Last year, about 200,000 construction workers lost their jobs. We could and should put many of these Americans back to work through this economic stimulus package.

In addition, let me give you two examples of investments we could be making that would have a tremendous economic impact on the lives of Americans.

If we just provided $148 million for an expansion of Community Health Centers, that would be enough to create 227 new health centers throughout the country; provide health care services to an additional 1.4 million previously unserved Americans; lead to the creation of 15,000 new jobs, and provide a total economic benefit of $1.25 billion.

For those that question the appropriateness of including an expansion of community health centers into an economic stimulus package, I would say to my colleagues that this is exactly what we did during the 1980s under President Ronald Reagan. It worked. If it worked in the 1980s under President Ronald Reagan, it will work today.

Another important investment that we should make is to provide at least $200 million for the Low-Income Weatherization Assistance Program. Not only could the program easily absorb this level of funding and create additional construction and retrofitting jobs, but it also would save millions of dollars for low-income people who are struggling with higher energy costs by weatherizing an additional 75,000 homes.

In 2001, I was an early backer of tax rebates. I support tax rebates for the middle class, for low-income families with children, and for persons with disabilities. I also believe that senior citizens who don't pay income taxes should be receiving this assistance as well through a bonus in their Social Security checks.

But giving someone $300 or $600 or $1,200 alone will not fix the economic situations facing millions of Americans. Putting Americans to work at decent paying jobs and helping those most in need would do much more to strengthen the middle class and reduce the poverty rate than simply sending rebate checks and bonus depreciation tax breaks.

Let's pass an economic stimulus package quickly, but let's make sure we get it right. Let's help those most in need. Let's put Americans to work at good paying jobs. And, let's repair our crumbling infrastructure.

Comments

[realitytrumpsbull]

I think, at the end of the day, there'll be the wage slaves, and the people that 'own' them...ah, behold, a 50-state company town...
but, there's an 'out', you can start your own small business for about 30 bucks or so...then you can be slavemaste­r...LOL

[xfiguy]

Sen. Bernie Sanders should be running for President! This is the first person who had anything to say that made any sense. I agree with everything he addressed.
I'm still fuming after reading the article about mexican illegals that don't pay any taxes that will be getting "tax rebates" (OUR tax dollars) as part of the economic stimulus plan.
My feeling is we should vote out of office these politicians that don't have the backbone to represent us and vote into office more representaves like Sen. Bernie Sanders.

[researcher]

capitalism is designed to eliminate the middle class. the rich get rich get richer and the poor get poorer and the middle class line up to vote for the reagans of the world.

dont blame politicans the middle class has no one to blame but themselves. they got greedy just like the have mores.

but the have mores smile all the way to the bank while the middle class works two jobs to make ends meet. whoops to late now time for some corp fascism in america.

[Larry of Corrales]

Thanks Bernie - I like what you say and basically agree with you. The problem is that the Republicans have lived by the credit card their entire time in power (with the help of more than a few Democrats). Now the Democrats are trying to gain favor with the electorate by buying them in the same way. Give them a tax cut and they will love us and elect us again. That seems to be all that most politicians know how to do.

[Herrington]

Senator, I will say to you what I said to Emanuel.

If congress wants to make a difference, accelerate the implementation of the minimum wage increase. Terminate the Bush tax cuts immediately. Slap some tariffs on imports that threaten American jobs, those that still exist. Raise interest rates to combat the resulting inflation and provide people with some incentive to save. And I'm sorry to say, we desperately need a higher captial gains tax to offset the institutionalized theft that has going on since Reagan. Change the direction of the money flows from concentration to equlibrium. Otherwise, the economy will die.

No amount of tax cutting, rebates or other Republican supply side snake oil will fix what is wrong with the economy.

And what is wrong with the economy is that for the past twenty years the productivity increases in production, that were traditionally passed on to the workers, have been siphoned off by the rich. They now have all the money and America's standard of living has been cut by half.

[CAPTAINSKIPPY]

Thank you Senator, you have it exactly right: "I(n) order to protect the interests of the sinking middle class the federal government needs a change in direction in almost every area of public policy." Big changes are required, the average American gets no respect, has little power, less hope, and no savings (no real future). The CorPoorRat Kings like it that way - time to end their reign of Error by rewriting the laws of corporations.

[chronic5]

An economic stimulus package does not have to be in the form of tax rebates. It isn't over yet. I think we need to include the truly needy, the disabled and the elderly.

The bigger picture. We need to bring our jobs home. We need to save the middle class and we need to build something for future generations.

We can fix these problems. If we can spend more than 6-10 billion a month on this useless war we can do a lot more to save our economy by rebuilding our crumbling infrastructure - something that hasn't really been addressed 1980. Were the "greatest generation" also the most selfish generation to walk the face of the earth? It's time to move on.

[jazzman]

All Bernie has said is true and in November the American people most affected by all these policies will march once again to the polls and vote for a Republican and the downward slide will continue unabated. Real men from the south, throughout the midwest and west will think to themselves, "Better to work for minimum wage, be buried in debt, and have no health insurance than have a woman or a black man lead the country. Bring on the old geezer war hero and the slick flim flam man. Yeehaa!!!!"

[EricArthurBlair]

Giving out handouts of a few hundred dollars reminds me of the old saw about giving a man a fish. The people in greatest need will spend the entire amount on dire necesseties and end up no better than they were. Those who are on fixed incomes, such as the retired or disabled, receive nothing because these sops are given out as tax refund bonuses, and people with social security or disability as their sole income generally don't pay taxes anyway. We need to improve the infrastructure of people's lives, not erect a facade over the misery.

The Republican version of economic stimulus is more like comedienne Paula Poundstone's take on the old proverb: "Build a man a fine and you keep him warm for a day; set a man on fire and you keep him warm for the rest of his life.

[bg1]

What about rectifying the trade deficit to reverse the decline of our industrial base? The off-shoring of manufacturing, engineering and R&D, plus the insourcing of low priced replacement workers in these sectors, is the real cause of middle class shrinkage. Any plan that doesn't address this issue is useless.

[mouselion]

It is interesting that for every dollar of business tax breaks ("bonus depreciations") only 27 cents is added to the Gross Domestic Product, while for every dollar in Food Stamps, $1.73 is added to the GDP. Is this because of all the grabbing CEO hands between Industry Row, Wall Street and Main Street?

$300 "tax rebates" will do a lot for paying down interest on credit cards, benefiting the credit card companies -- not a whole lot of good for the consumer saving money, freeing up resources from debt. So your right, Bernie, we need a whole lot more than that. A WHOLE lot more than that!

With the state of our infrastructure, I like your idea of putting the unemployed to work. This economic recession is the perfect opportunity to start building our Great Society back up again. Keep up the great work, Bernie -- You The Man!

[outnow]

Thanks Senator Sanders.

The economy is worth saving. Direct government spending on infrastructure, education, and conservation, including renewable energy, would help put Americans back to work.

The electorate needs to realize that the middle class is the backbone of America's economy. Consumer driven as it now is, only by assisting those in the middle class will the economy be sustainable. The elderly and low income and fixed income need assistance. Those at the top do not need more. They have made out like bandits ever since Reagan took office.

Why do corporations get welfare - corporate socialism? The answer lies in the influence wielded by corporate lobbyists and the "false consciousness" of many low and middle income voters who somehow are influenced by churches into accepting the idea that "family values" will be spread from the Whitehouse to the society. What president is or has actually spread family values into the American society?

The current president has been dishonest with the American people about the economy and the reasons for going to war. Is this the example that we want our children to see? Our highest value is integrity and that virtue is sadly missing from the discourse in Washington.

[LeftRight]

And senator, how exactly are we going to pay for all this? The president has said that he will veto ANY tax increase, at least on the rich, and I'm sure that even if it were to get overridden he would simply issue a signing statement and order the IRS to not collect the new taxes. Therefore, the Congress needs to get back to what the Constitution tells them to be, an equal branch of government, with the authority and RESPONSIBILITY to impeach this president and vice president!!!

[Clinton]

John Edwards would be the most effective president for addressing these issues.

[kasa5400]

My 'favorite' statistic aout income disparity comes from the US Treasury data released in Dec. 2007.

Between 2003-2005, the AFTER-TAX income of the upper 1% increased by 43.5%.

Between 2003-05, the after-tax income of the bottom 90% increased by an average of 3%.

Inflation during the 2003-05 time period was far far more than 3%.