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Rebuilding Our Economy

Rebuilding Our Economy

Americans need a New Direction.  Americans need a change from war without end and the economy on the brink of recession.  The 110th Congress is working to rebuild our economy and help families struggling to make ends meet.

Unprecedented Response to Economic Downturn:
  More than 130 million American households are getting Recovery Rebates between May and July--to help spark a rebound of the American economy and help families struggling to make ends meet.  The rebates for taxpayers and incentives for small businesses to invest this year are the result of a bipartisan agreement in January in Washington to boost the economy--an agreement that was unprecedented in its timely response to an economic downturn.

Next Economic Relief Efforts:  Now it's time for Congress and the President to come together around a second economic recovery and relief effort.  Economic conditions have deteriorated considerably since the first response, and Americans are struggling with an extended period of rising costs. 

Economic growth continued to be anemic in the first quarter of 2008--still just 0.6 percent, the same almost non-existent growth as the previous quarter, and a significant drop from the 4.9 percent pace in the third quarter of 2007.  Growth in consumer spending, vital to the health of the economy, dropped to just 1 percent, the slowest rate of growth since the 2001 recession.

Oil, gas, and diesel prices have smashed records daily this Spring.  Basic food prices are rising by double digit percentages. Forty-four percent of American homeowners are expected to see their home values drop--after years of appreciation--and now one in 33 homeowners is projected to actually face foreclosure in the next two years.  With falling housing prices, more than 10 percent of homeowners now owe more on their mortgage than their homes are worth.  

Bush Economy:  But make no mistake:  the perfect storm of the housing crisis, rising prices, stagnant wages, and disappearing jobs are the cumulative result of years of inaction or failed policies that have hurt our ability to compete, and left more and more of our people behind.

  • The Bush Administration's failures to crack down on abusive and predatory mortgage lending practices have contributed to a foreclosure crisis that threatens homeownership, hurts families, communities, and businesses, and is the main cause of the economic downturn.
  • The exploding national debt under President Bush has weakened the dollar and limits our ability to invest in the future and meet our long-term commitments.
  • Bush tax policies that transfer wealth to the richest individuals and corporations have left most Americans struggling with stagnant wages, and left innovative industries without incentives to grow.  
  • And the war in Iraq has not only weakened us in the fight against terrorism--it has also diverted more than $500 billion that could have been invested in education, infrastructure, and a stronger American economy.


A New Direction: 
To rebuild the American economy, we need leadership that will work to ensure every American has a chance to succeed and prosper, and innovative American businesses can once again create the best jobs in the world.   And we must lead a revolution to renew and rebuild America, with the fiscal responsibility that will strengthen our economy for generations to come.  

PROVIDING RECOVERY REBATES

The economic downturn of January led to an unprecedented bipartisan effort to enact a timely, targeted and temporary stimulus to our economy, helping families struggling to make ends meet.
The stimulus package:

  • puts Recovery Rebates in the hands of 130 million American families.  The rebates of $600 per taxpayer, $1,200 a couple, and increased an additional $300 for each qualifying child, and started hitting bank accounts and mailboxes in May.
  • promotes small business investment in plants and equipment.
  • will help create 500,000 jobs by the end of the year.


CREATING JOBS

The number of American jobs has declined for four straight months, by a total of 260,000.

The New Direction Congress is working to:

  • create new ‘green' jobs and retain existing jobs with investments in American renewable energy and new technologies in the clean energy sector, and training a ‘green collar workforce.'
  • spur investment in new innovation-based job creation and expand scholarships for a math, science, technology, and engineering teacher corps.
  • launch an effort to rebuild and modernize American infrastructure, constructing and repairing highways, bridges, transit, levees, dams, broadband networks, schools, hospitals, and livable communities.


RAISING WAGES
 

walletThe gap between the richest Americans and everyone else has grown in the last eight years.  Since 2001, the real income of a typical family has fallen by nearly $1,000.  Hourly earnings grew at the slowest rate in two years in April.  Over the last 12 months, wages have grown by 3.4 percent--less than the 4 percent rate of inflation.

The New Direction Congress enacted the first increase in the federal minimum wage in almost a decade, directly helping an estimated 5.3 million Americans and setting a new wage floor for another 7.2 million lower wage workers.   The second 70-cent increase takes effect this July.  When fully phased-in, the pay raise puts another $4,400 in the paychecks of these workers.


EXTENDING UNEMPLOYMENT AID  

The number of unemployed Americans stands at 7.6 million - 800,000 more workers than one year ago. More than one in every six of Americans looking for work have been jobless for more than 26 weeks--the maximum number of weeks for receiving regular unemployment insurance (UI) benefits.  The number of long-term unemployed Americans is higher now than when Congress last provided extended unemployment benefits in 2002. .

The New Direction Congress is working to extend benefits to 3.2 million workers by:

  • immediately providing up to 13 more weeks of benefits to workers exhausting regular unemployment compensation in every state.  
  • providing an additional 13 weeks (for a total of 26) in states with high unemployment (six percent or higher).


HELPING AMERICAN HOMEOWNERS

familyThe median home price has fallen 7.7% in the last year.  According to a new report released by The Pew Charitable Trusts, one in 33 homeowners is projected to be in foreclosure over the next two years, as a result of subprime loans made in 2005 and 2006.   An additional 40 million neighboring homeowners could see their property values drop.  There are 75 million owner-occupied homes in America.  More than 10% of American homeowners now owe more than their homes are worth.
The House has passed the most comprehensive legislation yet proposed to address the foreclosure crisis.  The legislation:

  • provides affordable mortgage refinancing options that help families avoid foreclosure, protect neighboring home values, and stabilize the housing market.  This is no bailout for lenders or borrowers.  FHA will guarantee refinanced loans only if the lender takes a significant loss by reducing the loan principal to below current appraised value and the consumer can repay the new loan and agrees to share any future gains with government.    THE PRESIDENT IS OPPOSED.
  • provides loans and grants to states for the purchase and rehabilitation of foreclosed homes standing empty, and stabilizes home values in a neighborhood.  THE PRESIDENT IS OPPOSED.

Despite the slow and insufficient response of the Bush Administration, the New Direction Congress remains committed to working with the Administration to stabilize the housing market and provide relief to American families struggling in our weakening economy.  Ending the foreclosure crisis is vital to the American economy's recovery.  Most Americans' primary investment is their home.


FIGHTING RECORD GAS PRICES  

gas pumpCrude oil has reached new almost daily records, above $124 per barrel, just after the biggest five oil companies announced 1st quarter profits totaling nearly $37 billion. This continues the five-year trend of record oil profits under the Bush Administration.  Gas prices have hit new records day after day, with the national average approaching $4.00 a gallon, more than 2 ½ times the average price of $1.47 in January 2001.
House Republicans can join with Democrats to help lower gas prices by rounding up veto-proof majorities for legislation the House has already passed with very little of their support: 

  • hold OPEC accountable for oil price fixing.  THE PRESIDENT IS OPPOSED.
  • crack down on price gouging.  THE PRESIDENT IS OPPOSED.
  • repeal subsidies to Big Oil earning record profits - including Exxon's $10.9 billion quarter - and re-invest in renewable energy and efficiency.  THE PRESIDENT IS OPPOSED.

The New Direction Congress has in a bipartisan way:

  • forced the President to take real action to lower gas prices with a temporary suspension of deposits to the Strategic Petroleum Reserve.  The reserve is close to 97% full now, its highest level ever and enough to meet our security needs.  It has been tapped or suspended by previous presidents, including President Bush. Experts project this could lower gas prices by 5 to 24 cents per gallon.  In 2000, just the announcement of a SPR moratorium dropped oil prices in the market, from $30 a barrel to $20 over the year.  

The bipartisan Energy Independence and Security Act of 2007, signed by the President in December, included these provisions to lower energy costs:

  • Market manipulation authority for the Federal Trade Commission will protect consumers against price manipulation by the oil industry.  After urging by the New Direction Congress in April, the FTC announced it will move forward with these rules.
  • The first update to vehicle mileage standards in 32 years puts Americans on track to save up to $1,000 per vehicle a year on gas prices by the time they are fully phased in.  America's long-time growing dependence on foreign oil will be reversed, with our imports of foreign oil dropping from 60 percent to 51 percent of our total consumption in 2022, according to the Energy Information Administration's new calculation this Spring.
  • The Renewable Fuels Standard will require a greater reliance on bio-fuels.  Right now, ethanol being blended into gasoline is keeping “oil and gasoline prices 15 percent lower than they might otherwise be” according to Merrill Lynch.  Last year, the ethanol industry created 240,000 new jobs and added $47 billion to the GDP.  Two-thirds of the RFS must be met by non-food bio-fuels, such as switchgrass and woodchips.
  • The new Farm Bill invests more than $1 billion and redirects incentives to encourage cellulosic non-food biofuel production to make us less dependent on foreign oil.  THE PRESIDENT IS OPPOSED


MAKING GROCERIES AFFORDABLE
   

grocery storeGrocery prices have risen too far for lower-income Americans to afford the basics without significant pain--or reasonable assistance.  Consumer food inflation has been running at a 5% annual rate in the past three months, including the largest monthly increase in 18 years in April. The largest price increases are white bread, up 16% in the past 12 months; milk, which has risen 13%; and eggs, up 35%.  An estimated 28 million Americans--a record high--are expected to enroll in the Food Stamp program this year. 

  • Nearly three-fourths of the new Farm Bill, including $10.4 billion in new spending, goes to nutrition programs that help 38 million American families afford healthy food.  THE PRESIDENT OPPOSES THE FARM BILL.
  • The new Farm Bill:
  • updates the Food Stamp program, indexing it to inflation for the first time in the program's 40 year history, and ending the cap that makes families choose between food and child care.  Households with children get 77% of Food Stamp benefits.
  • adds more than $1 billion to the Fresh Fruit and Snack program for schools.
  • provides much-needed support to emergency feeding organizations, such as food banks, food pantries, and soup kitchens.
  • Fresh fruit and vegetable producers will have their own place in the Farm Bill for the first time and will benefit from more than $1.3 billion in new programs that support research, pest management, trade promotion and nutrition for the industry.
  • The new Farm Bill and the Energy Independence and Security Act of 2007 both move America's bio-fuel industry more to non-food sources, such as switchgrass and woodchips.

MEETING GLOBAL FOOD SHORTAGES  
Internationally, food prices have doubled and tripled in some countries, and shortages and famine are becoming global emergencies.  The global food shortages are caused by spiking energy costs, a weakened U.S. dollar, weather-related crop shortages, competition from the bio-fuel industry, and rising demand for high-value foods in China and India.

America is the world's biggest provider of food aid, delivering more than $2.1 billion in assistance in 78 countries in 2007.

  • The new Farm Bill provides:
  • an additional $60 million, on top of the existing Food for Peace international aid program, to purchase local food overseas.
  • an additional $84 million for the McGovern-Dole International Food for Education and Child Nutrition Program in underdeveloped countries.
  • The Supplemental, which will be considered shortly by the House, includes $1.62 billion for emergency international food aid in FY 2008 and FY 2009 -- $500 million more than the President's request.  

REDUCING TAXES FOR MOST AMERICANS
Since 2001, most Americans have seen stagnant wages for their work--but the top tier of taxpayers has grown even wealthier.
The New Direction Congress has worked to provide tax cuts for middle and lower income Americans and small businesses, responsibly funded, instead of driving us further into debt by enacting new tax breaks for the top 1% of taxpayers.   This Congress is working to:

  • extend protection for 20 million middle-income families about to be hit by AMT, the Alternative Minimum Tax, originally put in place to prevent wealthy Americans from avoiding taxes.
  • cut taxes for small businesses to help them invest in new equipment and hire new workers.
  • extend middle-income tax relief beyond the 2010 expiration, including extending marriage penalty relief, the child tax credit, and the 10 percent bracket--in a fiscally responsible way.


HELPING OUR TROOPS AND VETERANS WITH RISING COSTS

Since October 2001, 1.7 million U.S. troops have deployed to the wars in Iraq and Afghanistan, many multiple times.  The toll on their health, their lives, and their families has been enormous--at a time when the American economy is faltering.  Their transition into Veterans Administration care has added to stress and backlogs in that system.  The New Direction Congress has worked to increase pay and benefits for active duty military personnel, as well as:

MAKING HEALTH CARE AFFORDABLE  
child at the doctorSince 2001, premiums for family health coverage have climbed 78 percent.  A record 47 million Americans are without health insurance.

The New Direction Congress has worked to:

  • enact into law after years of delay a ban on genetic information discrimination in health coverage, and an end to discriminatory treatment of mental health care coverage.
  • protect health coverage for 6 million children--and expand it to 4 million more who are already eligible and would otherwise go uninsured.  Replacing expensive emergency room care with health care coverage is cost-effective for families and taxpayers, and helps ensure children succeed.  THE PRESIDENT IS OPPOSED.
  • help reduce the cost of prescription drugs for seniors and Americans with disabilities, by requiring Medicare to leverage its substantial bargaining power to negotiate better prices.  THE PRESIDENT IS OPPOSED.
  • reform Medicare health care provider reimbursements as well as significantly improve benefits, preserving access to and improving affordable care for millions of Americans.  THE PRESIDENT IS OPPOSED TO BOTH.
  • help keep families from losing critical subsidized health care by preventing the President's Medicaid regulations from taking effect.  THE PRESIDENT IS OPPOSED.
  • expand life-saving stem cell research that could cure or prevent chronic diseases among Americans--also reducing health care costs.  THE PRESIDENT VETOED.

MAKING COLLEGE AFFORDABLE
diplomaAs the challenges of a global economy make a college education an even more valuable key to prosperity, college costs have risen more than six percent in the last year alone.
The New Direction Congress has gotten signed into law:

REPAIRING CONSUMER CONFIDENCE
kids playingConsumer confidence has dropped to its lowest level in five years--a quality of life issue for Americans as well as a drag on our economy.  One factor is the wave of unsafe products from other countries, including China, which made 2007 what Consumer Union called ‘the year of the recall.'
The New Direction Congress has:

  • enacted mandatory ‘country of origin' labeling for food products in the new Farm Bill, for the first time requiring this crucial information for consumers.   THE PRESIDENT OPPOSES THE FARM BILL.
  • worked to send to the President a major overhaul of consumer product safety law, banning lead in toys and other children's products and beefing up consumer protections that have been greatly weakened in recent years--at the same time our economy has seen an influx of products from all over the globe.
  • conducted extensive oversight to reveal how a lethally tainted blood thinner named Heparin could make it to American consumers, and the possible dangers of BPA in baby bottles--both of which led to legislation.