3 Million and Counting

That's the number of jobs lost since Bush took office — but he cares only about tax cuts for the rich. And those cuts won't resurrect the 3 million jobs or produce new ones.

By Clyde Weiss

This is the first of a series of articles, looking to the 2004 elections, that will evaluate key aspects of President Bush's performance.

At a $2,000-a-ticket Republican fundraiser on June 17 in the nation's capital, President Bush promised "a society of prosperity and compassion, so that every citizen has a chance to work and succeed and realize the promise of America." Since Bush has been President, however, more than 3 million private jobs have been lost — and we've sustained the steepest job loss since Herbert Hoover was President 70 years ago. Many Americans have begun to realize that Bush's promise is empty.

Worse, we've learned that Bush's economic plan is taking the nation down a fiscal rabbit hole that will only increase joblessness, reduce public services, shift the tax burden from the wealthy to the middle and working classes, and drown current and future generations in debt.

The cornerstone of Bush's economic plan is tax cuts for the rich — a "solution" that has repeatedly proved ineffective in stimulating the economy in general and creating jobs in particular. Why? Because the wealthy who get the cuts are the least likely to spend the money they provide.

No fewer than 10 Nobel laureates and 450 other economists dispute Bush's assertion that tax cuts will improve the economy. "Regardless of how one views the specifics of the Bush plan, there is wide agreement that its purpose is a permanent change in the tax structure, and not the creation of jobs and growth in the near-term," they wrote in a statement earlier this year. Tax cuts, they concluded, "will reduce the capacity of the government to finance Social Security and Medicare benefits as well as investments in schools, health, infrastructure and basic research."

University of Texas Prof. James Galbraith contends that the President is not being candid with the American public when he says his tax-cut policies will lift the economy. "The men in charge talk about growth, but actually they like stagnation," he said. "Do they really want full employment and strong labor unions and rising wages? I doubt it. Stagnation helps to justify more tax cuts. Their goal is plain: that financial wealth should be freed of tax."

Bush justifies tax cuts as a way to stimulate the economy following the twin fiscal blows of the terrorist attacks of 9/11 and the corporate scandals that burst the stock market bubble in 2000, wiping out $7 trillion in investments and pension savings. But the cuts are not working, and even some business leaders acknowledge that they won't work.

OLD MR. CUTS. Bush is spinning the truth: He was advocating tax cuts — at a cost to the government of $1.6 trillion — when he was running for President! That's before the economy turned sour in March 2001, the "official" start of the recession.

When Bush took the oath of office in January 2001, the federal government had a projected $5.6 trillion, 10-year budget surplus, thanks in part to the Clinton administration. Today, the country has a projected $4 trillion deficit over the decade, a $10 trillion reversal that would be the worst in U.S. history. In May, Bush signed legislation to raise the limit on the national debt by nearly $1 trillion — to a record $7.4 trillion — in order to pay for his tax cuts on estates, income, capital gains and dividends. If, as expected, the cuts are not permitted to expire, they could drain the federal treasury of as much as $3.12 trillion over the next 10 years.

DISMAL JOB PICTURE. Bush's failures are most evident regarding jobs. Since he became President, more than 2.7 million manufacturing jobs and 600,000 service jobs have been lost, shooting the unemployment rate up to 6.4 percent in June — the highest since April 1994. The human toll is horrific: 9.4 million people out of work, the most since December 1992, when Bush's father was President.

Staggering as such numbers are, the reality is far worse: The unemployment rate soars to 10.6 percent — nearly 19 million people — when the 5 million who want jobs but have given up the search, and the 4.5 million part-timers who would like to work full time, are added to the total. (Only those actively seeking work are officially counted as "unemployed.")

It's a terrible record. Going back to Franklin D. Roosevelt in 1941 (when the government first compiled such statistics), no President has lost more "net" jobs during the first 30 months of his term than Bush.

AMONG THE VICTIMS. Such huge numbers can be numbing, so let's meet a "statistic," Mary Jo Leier of St. Paul, Minn. Once an administrative specialist for the state, she is still job hunting. Leier, who also was president and steward of Local 2829 (Council 6), and her semi-retired husband, have been limping along on her monthly $1,400 unemployment checks since February, when state budget cuts forced her into the bulging ranks of jobless Americans. She was still receiving the remainder of 29 weeks' worth of unemployment checks when Bush traveled to her home state in June to talk up tax cuts as the right medicine for an ailing economy.

Standing before a crowd gathered at a manufacturing firm called Micro Control Co., Bush declared: "I want people who want to work to be able to find a job." Promoting his most recent tax cut package in May, Bush boasted: "The goal is to create a million new jobs by the end of next year."

Mary Jo Leier finds those claims hard to believe, especially since Micro Control CEO Harold Hamilton is a board member of the Center of the American Experiment. In 1999, the center issued a report that recommended downsizing and privatizing the Minnesota Office of Strategic and Long-Range Planning, where Leier had worked until its budget was cut. Soon after, Gov. Tim Pawlenty (R) followed through on a campaign pledge to dismantle that office, fulfilling a key goal of Hamilton's organization.

Leier desperately hopes the economy will help her. But she fears things will get worse. Further, she's certain that the small refund she'll get from the third round of tax cuts won't help much with expenses, which will balloon to $1,000 a month in health-insurance premiums alone once her state benefits run out.

The $350 billion tax-cut package Bush signed into law in May will give the bottom 60 percent of all taxpayers, on average, a total of $350 over the next four years, according to economists Lawrence Mishel and Jared Bernstein at the Economic Policy Institute. That's less than $100 per year. The wealthiest 1 percent of Americans will receive, on average, $96,634 in cuts over the same period. According to Citizens for Tax Justice, taxes on that privileged segment will fall by a whopping 25 percent by 2010 because of the Bush cuts, if they don't expire first. That's 2.5 times the average cut the remaining 99 percent of taxpayers could receive by then.

When Bush told workers at Micro Control, "The more money people have in their pocket, the more likely this economy is going to grow," he was diverting the public's attention from the fact that the bulk of that money will go to the fewest — and wealthiest — taxpayers. These are the very same people and companies that put Bush into office and now expect something in return.

Consider: During the 1999-2000 election cycle, 55 percent of the $3 billion in federal campaign contributions went to Bush and GOP candidates for Congress. Of that, $696 million "came from corporations and wealthy executives eager to underwrite the Republicans' hands-off approach to business," wrote Eric Bates in Mother Jones magazine. Citing federal election data compiled by the Center for Responsive Politics, the magazine concluded that "every major business sector except lawyers and communications sided firmly with Bush."

A LOCAL CRISIS. The financial downturn has hurt state and local economies in ways that directly affect America's working families. The worst economic crisis to hit states since World War II is causing governors and legislators to cut public services, lay off workers, use up "rainy-day" reserves, and even raise some taxes and fees.

The National Governors Association reports that 37 states cut their fiscal 2003 budgets by nearly $14.5 billion, while 17 of those states had laid off employees. Slowly responding to the fact that they face a revenue (not spending) crisis, governors in 29 states have proposed a total of $17.5 billion in new taxes and fees for the fiscal year that began in July — the largest increase since 1979.

Revenue raised, however, may not be enough. "If economic conditions remain stagnant or worsen, and if budget shortfalls continue next year, the states will have exhausted many of their options for countering a weak economy," said Scott Pattison, executive director of the National Association of State Budget Officers. Unfortunately, state deficits are projected to increase to more than $50 billion during the current fiscal year, according to the National Conference of State Legislatures. States are cutting back on services, resulting in more job losses.

SWIMMING IN RED. In Minnesota, potential layoffs in state government could mean "the most widespread downsizing" seen there since the early 1980s, says Peter Benner, executive director of AFSCME Council 6, Minnesota's largest state-employee union, and International vice president.

In California, a $9-billion budget surplus of just three years ago has collapsed into a $38-

billion deficit — the largest lake of red ink in the state's history. In a desperate effort to close that gap, lawmakers cut $7 billion in spending from the fiscal 2003 budget, and have notified 13,000 state workers that they could be out of a job by this fall.

In Ohio, Gov. Bob Taft (R) is trying to close the medium-security Lima Correctional Institution; if successful, some 375 employees will either be laid off, forced into retirement or transferred to other institutions — bumping employees with less seniority. So far, the Ohio Civil Service Employees Association/AFSCME Local 11 has blocked the closure in court.

Meanwhile, cities and towns that rely on state support to operate many local programs face a 4 percent gap between revenue and spending — the highest in more than a decade, according to the National League of Cities. To make up the revenue, 61 percent of 330 cities and towns responding to a NLC survey this year said they will have to increase fees or create new ones, while 25 percent said they will also increase property taxes.

ANOTHER AGENDA. "Bush and company did not entirely create these conditions, but they have done nothing to make them better — and much to make them worse," Professor Galbraith explained recently.

He added that tax cuts disproportionately favoring the rich mean that the taxes left on the books "will be paid mostly by the middle class, by the working class and by the poor" — those who can least afford to foot the bill for the services government provides.

That doesn't seem to concern those pushing Bush's economic agenda. Why? Because tax cuts have little to do with relieving the financial burdens of most Americans. They have a lot to do with the conservatives' desire to shrink government by cutting revenue and eliminating or privatizing such public services as Medicare, the federal health insurance program that covers nearly 40 million elderly and disabled people.

THE REAL TARGET. "Zealots who want to use tax cuts to eviscerate government's capacity to act" are the people who are driving Bush's fiscal policy, said Robert Borosage, co-director of the Campaign for America's Future, at a recent Take Back America conference.

For proof, consider the words of tax-cut crusader Grover Norquist, a Bush administration confidant who heads the anti-union Americans for Tax Reform. Last January, Norquist explained the group's ambitions: "We've set as a conservative movement a goal of reducing the size and cost of government in half in 25 years, which is taking it from a third of the economy down to about 17 percent, [and] taking 20 million government employees and looking to privatize … so that you don't have all of the jobs that are presently done by government done by government employees."

Such cold-blooded ideological crusading has, of course, very human consequences for people like Mary Jo Leier. Through a cracking voice that reveals the pain of being laid off for no fault of her own, Leier recalls how her work in state government made her feel that she was "making a difference for the people of Minnesota." Now, she says, budget and tax policies are making a difference — a frightening one — for her. "I've had to contact creditors to make minimum payments" and improvise in other ways to economize resources. "It's getting lean. I'm having a lot of soup — making it stretch."

Leier, and millions of other unemployed Americans, are still waiting to enter the "society of prosperity and compassion" that Bush promised to deliver. Next November, standing at the ballot box, they will pass judgment on that promise. Then, we hope, it will be Bush's turn to find a new job.

Change in Employment During Presidential Terms:
Change in Public and Private Jobs (nonfarm)

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