TANKING ECONOMY PRODUCES PROPOSALS FOR SECOND STIMULUS

Friday, October 31, 2008

(PAI)

TANKING ECONOMY PRODUCES PROPOSALS FOR SECOND STIMULUS
By Mark Gruenberg
PAI Staff Writer

            WASHINGTON (PAI)--With the economy tanking and with Congress headed for a lame-duck session at which a second stimulus package--which may total upwards of $300 billion--could come up, there is no shortage of ideas from unions and their allies about measures to get people back on the job and dollars back in their pockets.

            From reconstructing 40-year-old schools to rebuilding the nation’s roads, from extending unemployment benefits to expanding Medicaid aid to the states, unionists trooped up to Capitol Hill in late October to tell lawmakers about how to get the nation moving again--in some cases taking time out from the election campaign.

            But whether any or all of these ideas are enacted on the attitude of one key player who wasn’t at the hearings: Lame-duck anti-worker GOP President George W. Bush, whose staffers now only grudgingly admit a “Stimulus II” might be necessary.

            The latest piece of evidence the economy is in the tank--an 0.3% decline in gross domestic product from July 1 through the end of September--led AFL-CIO President John J. Sweeney to say even Bush should realize something must be done.   He left many of the specifics to others, and to Congress, which will reconvene Nov. 17-19.

            “We need a genuine economic stimulus package now, in the next 30 days, to boost our economy before already struggling, hard-working families suffer even more from a downward spiral,” Sweeney said. And Bush should “announce that he will, in fact, sign this legislation.

            “Such a package must provide relief for the 1 million unemployed workers who will exhaust their benefits before the end of the year, aid state and local governments” to “provide needed services and jobs and jump-start infrastructure investments to create jobs quickly and rebuild our crumbling schools, bridges, and roads. Surely we can agree rescuing Main Street is just as crucial as rescuing Wall Street,” he declared.

            The witnesses before the congressional committees were more specific:

            * Laborers President Terry O’Sullivan told the Transportation Committee on Oct. 29 that two prior stimulus packages--the tax rebates to consumers early in the year and the $700 billion Wall Street bailout--“were like using a can of Red Bull and a candy bar to fix the problem.”

            “They provided no lasting impact, left no sustainable jobs behind and did not
provide tangible assets to taxpayers,” he declared. A jobs-based stimulus should have construction as a centerpiece, O’Sullivan advocated.

            Citing figures from engineering and construction groups, O’Sullivan said thousands of construction projects are ready to go and could start almost immediately. And the workers are available, he noted, since the jobless rate in construction is 9.9%.

            In the public sector alone, starting now to retrofit buildings--including schools--to save energy would not only help the U.S. in the long run but put up to 800,000 people to work, at an average construction worker’s pay of $40,000 each, he added.

            “Building America will build our economy now and for future generations in places such as Michigan, where 24,500 good construction jobs have been lost since 2007, Illinois, where 19,300 construction jobs disappeared, Minnesota, where 11,300 construction jobs have been lost and in Oregon, with 10,100 construction jobs lost.”

            * Both teachers unions presidents--Randi Weingarten of the AFT and Dennis Van Roekel of the NEA--urged investing in schools, and not just in construction, either.

            Weingarten said the states are so pinched by the current crunch that they’re drastically slashing aid to local school districts. In Providence, R.I., for example, the cuts are so bad that state AFT President Marcia Reback said all music programs were eliminated. “Can you imagine going to a high school football game and there’s no marching band?” Reback asked Weingarten. The band got cut.

            “Education and the economy are intertwined,” Weingarten told the Ways and Means Committee on Oct. 29. “When the economy is weak, workers lose their jobs, their homes and their healthcare. The effect of these losses doesn’t hit just the workers, it also affects their children, our students. And when the economy is weak and governments make spending cuts, all too often they make them in K-16 education.”

            It was Weingarten who pointed out that the nation’s school buildings, average age 40 years, need at least $286 billion worth of immediate repairs--jobs that could put people to work, bring in more tax dollars to hard-pressed school districts and help improve learning conditions.

            New NEA President Van Roekel told the Ways and Means panel that members of his union--the nation’s largest--see the impact of the recession every day in their classrooms, and not just in layoffs in Detroit (700), Los Angeles (500) and elsewhere.

            “With the frightening rise in mortgage foreclosures, schools are seeing record numbers of students who are homeless or poor enough to qualify for free school meals.

            “Many districts are being forced to raise prices for school meals due to escalating food costs. Schools report a steady stream of anxious parents, often in tears, pleading for free meals for their children because they do not have 70 cents a day for reduced price meals. Schools also report record numbers of students needing donated backpacks and school supplies, because their families cannot afford to buy them.”

            Those school districts need stimulus money for the school lunches and those items, Van Roekel said. Ways and Means handles taxes, and food program funds.

            * AFL-CIO chief economist Ron Blackwell laid out seven recommendations for putting money in workers’ hands, headed by extension of jobless benefits from their current 26 weeks to 39. But he didn’t just stick to the script of talking about an immediate stimulus at the Oct. 24 Education and Labor Committee hearing.

            Blackwell also said Congress should start correcting “long-term economic imbalances.” One is the nation’s trade deficit, which should be fixed by making the terms of trade equal so that U.S. workers can fairly compete. The other is the imbalance between workers and bosses, by passing the Employee Free Choice Act.

            “Any economic recovery program (should) focus the needed fiscal spending on improving our nation’s competitiveness through public investment to create a world-class workforce and a world-class national transportation, information and communications infrastructure,” Blackwell testified.

            “A public investment-led recovery program would focus needed spending on longer-term needs we must find a means to address if we are to support our living standards in an increasingly competitive global economy…and provide a more sustainable basis than that provided by asset inflation for our nation’s economic growth,” he pointed out. It was asset inflation that produced the home mortgage and dot-com bubbles that preceded this recession and the last one, Blackwell said.

            “The imbalance of bargaining power between workers and their employers is responsible for the stagnation of wages and the rupture of the crucial relation between wages and productivity that served as the foundation of the social contract,” he said. also led to low savings and forced workers to use credit to keep going.

            “Stagnation of wages motivated workers to work more, save less and borrow imprudently against appreciating assets to maintain their living standards. Correcting this imbalance requires…something close to full employment, a meaningful minimum wage and reforming our labor law to allow workers to freely associate with their fellow workers and form a union to bargain collectively. This is beyond concern of an econo-mic recovery program, but is essential to restoring an economy that is strong, sustain-able and internationally competitive…whose prosperity is broadly shared,” he stated.