[Congressional Record (Bound Edition), Volume 157 (2011), Part 5]
[Extensions of Remarks]
[Pages 6409-6411]
[From the U.S. Government Publishing Office, www.gpo.gov]




        ADA LAUNCHES JOBS-SOCIAL SECURITY-MINIMUM WAGE CAMPAIGN

                                 ______
                                 

                          HON. LYNN C. WOOLSEY

                             of california

                    in the house of representatives

                          Monday, May 2, 2011

  Ms. WOOLSEY. Mr. Speaker, Americans for Democratic Action has 
launched a Progressive agenda for jobs, rejuvenating the American 
economy, saving Social Security, and raising the minimum wage.


                                  Jobs

  Workers without jobs can't provide adequately for the basic needs of 
their families. The unemployment crisis is damaging families and 
contributing to a multitude of economic and social ills, including:
  The highest poverty rate for working-age people between 18 and 64--
12.9% in 2009--since 1965. Today, 43.6 million Americans are living in 
poverty, 19 million of whom are in deep poverty.
  Workers who have lost their jobs through no fault of their own often 
cannot pay mortgages and rent, even when receiving unemployment 
benefits, which are not equivalent to wages lost. The foreclosure 
crisis--primarily the outcome of misdeeds of bankers and mortgage 
brokers--is driving further declines in home values while destroying 
once-vibrant neighborhoods. Joblessness also contributes to increased 
homelessness, which is not only tragic for families who lose their 
homes, but is accompanied by broader social harms and increased budget 
pressures on already strapped local and state governments.
  Unemployed workers--along with many who are still employed--are 
losing employer-based health insurance coverage. In 2009, 50.7 million 
people were without health insurance--the highest number of uninsured 
since the Census started collecting the data in 1987. Joblessness is 
increasing pressure on public programs such as Medicaid, while 
increased use of uncovered emergency services by those with no other 
option for care is driving further increases in healthcare costs for 
small businesses and those still fortunate enough to have jobs and 
healthcare coverage.
  Workers without jobs can't pay taxes that provide the resources to 
hire teachers, police and firefighters, build and maintain roads, 
provide for appropriate national security, ensure product safety, 
protect the environment, and fill urgent long- and short-term national 
needs.
  We condemn the folly of deficit slashing while 15 million Americans 
remain unemployed--plus 11 million more who are under-employed or have 
dropped from the labor force. Insufficient economic demand and idle 
productive capacity in the economy, in the short-term, bleeds federal 
and state budgets, whether or not current economic conditions meet the 
official definition of ``recession.'' Reckless spending (except perhaps 
for ill-conceived and poorly executed wars) is not the cause of our 
budget woes. This is made obvious as conservatives decry the deficit, 
but cannot or will not name any specific government program they would 
slash in order to meet their demands for deficit reduction.
  Job creation--and the economic growth that spurs job creation--is the 
only way to reduce a budget deficit that is primarily the result of 
high unemployment. Unemployed workers represent idle productive 
capacity--lost wages and lost economic output. Lost wages reduce demand 
for goods, services, and investment, and depress tax receipts. Without 
consumers with money to spend, firms don't invest or hire, leading to 
more joblessness and still lower output. That leads to declining tax 
receipts along with growing demand for automatic stabilizers (such as 
unemployment benefits) and safety net services (such as Medicaid, food 
stamps, and housing assistance). Government deficits are inevitable in 
economic downturns with high unemployment.
  Since firms will not hire or invest where demand is lacking, and 
unemployed workers cannot expand consumption and increase demand, only 
the government can spur growth--through deficit spending and 
investment. Tax cuts may be helpful, but in the current climate, direct 
spending and investment will more quickly and more strongly stimulate 
demand. Investing now in America's current and future prosperity is the 
remedy for both joblessness and the long-term budget deficit.
  Conservatives argue that austerity will spur economic growth. That 
argument is based on evidence that fiscal austerity reduces interest 
rates (borrowing costs) for firms, and thus stimulates investment. But 
the evidence for this model does not mirror current conditions. 
Interest rates in the U.S. are already at historically low levels, yet 
firms are not investing or hiring. Moreover, few of the countries that 
experienced rapid growth while practicing fiscal austerity adopted 
austerity when the economy was operating far below its potential level 
of output, and in no case was a country as far below its potential as 
the U.S. is today.
  Furthermore, all of the evidence that austerity fosters growth comes 
from countries with a much larger percentage of their economy involved 
in export industries than is the case

[[Page 6410]]

with the U.S. Trade provides a source of demand for countries with a 
large export sector. The U.S. currently cannot rely on export-led 
growth to stimulate sufficient demand to reduce unemployment. For 
unemployment to be reduced in the short run, domestic demand must be 
increased. Thus, arguments for slashing government budgets in order to 
stimulate jobs and economic growth are not credible under current 
economic conditions.
  The American Recovery and Reinvestment Act, ARRA, may have created or 
saved up to 3.3 million jobs and averted a second Great Depression, 
according to the independent Congressional Budget Office, CBO, 
estimates. But simple math shows that it was woefully insufficient to 
offset the loss of $2.1 trillion in economic activity, $3.4 trillion in 
lost home values, and $7.4 trillion in lost stock values in 2009 and 
2010. Not only was $787 billion in stimulus insufficient to offset the 
losses, it was also swamped by an estimated $570 billion in spending 
cuts by state and local governments over the 2009-10 period.
  Thus, the stimulus provided by ARRA and other measures amounted to 
only about $126 billion per year for 2009 and 2010. The total effective 
stimulus was perhaps only 10% of the output lost.
  By 2014, the CBO projects that total lost output will reach $3.4 
trillion--more than $11,000 per person--assuming unemployment returns 
to normal levels by then. That figure will be worse if unemployment 
remains high. Additional and substantial economic stimulus that more 
realistically accounts for current economic realities is required, both 
to create jobs and to begin building the foundation for a prosperous 
future in which budget deficits can be reduced without causing economic 
contraction during a period of record unemployment.
  The way to achieve a balanced federal budget is with a sound banking 
system and rational monetary policy; government investment (recognizing 
the difference between spending and investment); and full employment at 
decent wages and benefits.

     We need jobs, and we have much work to do.

  A great nation can't remain great with crumbling bridges and schools, 
bursting water mains, leaking untreated sewage, grossly inadequate 
transportation systems, over-dependence on foreign oil, unaffordable 
higher education, and broadband preparedness that ranks 15th among OECD 
countries. ADA calls for restoring America's global competitive 
position with a restored manufacturing base, and rebuilt and expanded 
public infrastructure including broadband, throughout the nation.
  A great nation consists of livable cities and towns that work for 
people, with decent affordable housing, quality public schools, well-
designed and functioning public transportation systems, and jobs that 
provide decent wages. Cities cannot be warehouses for vast numbers of 
homeless and impoverished people who have no prospects and no hope.
  A great nation will be at the forefront of addressing global problems 
that have resulted from past mistakes. Global warming, polluted water, 
and energy insecurity require investment in high-speed railroads and 
mass transit systems; emission-free vehicles and the infrastructure to 
power them; research, development, and construction of renewable energy 
sources, such as solar, wind, and waterpower.
  America, with enforced fair labor standards and collective bargaining 
rights. To begin the process of restoring America's industrial-
employment base, ADA calls for fair trade policies that promote 
economic activity and lift wages in all nations, including our own; 
reformed tax policies that reward companies for creating jobs here, 
rather than for shipping them overseas; and national and local 
purchasing goals that support American manufacturing.
  For community restoration and further job growth, ADA calls for 
doubling funding for programs to employ youth--including high school 
dropouts, high school graduates, and college graduates. This includes 
expanding AmeriCorps, the Job Corps, and the Peace Corps, a renewed 
Civilian Conservation Corps to restore our national parks and forests, 
a Neighborhood Corps to protect, maintain and revitalize (or as 
necessary demolish) distressed housing, and Home Care Corps providing 
services to the elderly in their own homes.
  These ambitious programs, sparked by public investments, will 
generate millions of jobs that pay middle-class wages, serving urgent 
national needs and restoring the private economy. These are the 
necessary underpinning of a strong America.


                            SOCIAL SECURITY

  Social Security is under siege on multiple fronts, most of them 
familiar.
  Social Security is not part of the budget deficit. It's been made a 
scapegoat by long-time enemies of the program. Social Security payments 
are, in fact, not government spending at all. Government spending 
includes the purchases of goods and services by government. Social 
Security payments are direct transfers from working people with more 
income to the elderly, disabled, widows and orphans who have less 
income, and who mostly contributed to the program during their working 
years. As such, a dollar reallocated from one final consumer to another 
has no direct effect on GDP whatsoever. Such transfers are fair and 
effective, increasing security and reducing poverty.
  The Commission on Deficit Reduction is co-chaired by millionaire 
Erskine Bowles and former Senator Alan Simpson, who calls Social 
Security retirees ``Greedy Geezers,'' as if either man would consider 
living on the average benefit of $13,860 per year. The Commission 
includes only one economist; the rest are career politicians, most of 
whom have supported cuts to Social Security. And the Commission has 
accepted support from Peter G. Peterson, who has waged a relentless, 
decades-long campaign to cut Social Security and Medicare. The 
composition of the Commission is deeply flawed, including bias and 
conflicts of interest. Any proposal by the Commission regarding Social 
Security cuts should be rejected.
  For two-thirds of the elderly, Social Security is at least half their 
income. About a third of the elderly rely on Social Security for most 
of their income. Social Security isn't in jeopardy, except from the 
Commission, other privatizers, and unemployment--jobless workers don't 
pay payroll taxes.
  With no changes, Social Security can pay full benefits until 2039, 
and thereafter about 80 percent of currently scheduled benefits. Simple 
changes that don't damage the program, and make contributions more 
progressive, can be made. Changes in FICA tax policies for higher-
income earners would make it possible to reduce contributions by lower 
income earners, making the system less regressive and helping to 
address the enormous income gap that has developed in the U.S. over the 
past 30 years. Policy options include:
  Raising the cap on which the payroll tax (FICA) is applied above the 
current $106,800;
  Removing the cap entirely; or
  Applying the cap to all taxable income, including interest, 
dividends, and capital gains.
  The payroll tax, currently accumulating a $2.6 trillion surplus, is 
invested in U.S. government bonds, about the safest investment in the 
world.
  Proposals to allow workers to contribute a portion of their FICA 
contributions to individual accounts are a sure way to undermine the 
entire Social Security system, and must be off the table. It may sound 
harmless, but siphoning off funds earmarked for Social Security makes 
it impossible to pay for current benefits. Individual accounts held in 
investment funds would be subject to the ups and downs of the business 
cycle. For those fortunate enough to retire in good times, the accounts 
may be a good deal. For those reaching retirement in a downturn, the 
effect could be disastrous. They may have little more than a much-
reduced Social Security benefit to survive on and face years of poverty 
in retirement. We should not forget the last two years and the 
disastrous effect of the recession on 401(k)s.
  Baby boomers are retiring; our population is aging. Legislators 
noticed that in 1987 and took care of it by increasing the payroll tax, 
and by gradually increasing the retirement age to 67 by 2022. That 
increase in the normal retirement age cut benefits by 13 percent. 
Postponing retirement is tough for people who've had physically 
demanding jobs (unlike doctors, lawyers, economists, professors, and 
legislators). Recent data on longer life expectancy, the principal 
argument for raising the retirement age still further, have shown that 
longer life spans in the U.S. are principally a luxury for the well-
off. Further, the life expectancy numbers are skewed because of 
declines in infant and young-adult mortality. Ordinary working 
Americans aren't living appreciably longer lives, and thus longer 
retirements are largely a myth.
  We should also attract more young workers by creating an economically 
rational immigration policy.
  Current undocumented workers should be given a path to citizenship. 
This will ensure that they are appropriately contributing taxes, while 
affording them protections they now lack, including protection from 
workplace discrimination, wage and overtime protections, workplace 
safety, and collective bargaining rights.
  The Dream Act, a bill to provide citizenship to young people who were 
brought to this country as children, should be made law immediately. 
This would provide a path to citizenship for those who attend college 
or serve two years in the US Armed Forces, and would help the U.S. 
retain the most successful, productive young immigrants.

[[Page 6411]]

  Large numbers of the brightest students from around the world come to 
earn degrees from U.S. universities. Many wish to remain in the U.S., 
but our broken immigration system makes it nearly impossible for them 
to do so. We should be encouraging these graduates to remain in the 
U.S. on completion of their studies.


                              Minimum Wage

  The third prong of ADA's program is increasing and indexing the 
minimum wage. It lags at a shameful $7.25 per hour, while Republicans 
call for tax cuts for millionaires and billionaires. At its current 
level, the minimum wage barely provides an annual income above the 
individual poverty level, and many minimum wage earners are trying to 
raise families. It is unconscionable that anyone working full time in 
America should be mired in poverty, unable to meet basic needs of 
shelter, food, heat, and clothing.
  The minimum wage should be increased, and should in future be indexed 
to the Consumer Price Index, to ensure that it keeps pace with the 
rising cost of living.
  Opponents of raising the minimum wage will say that it increases 
unemployment. The evidence for this is extremely spotty. In some states 
that have increased their minimum wage, unemployment has declined 
relative to neighboring states that have maintained minimum wage at the 
federal level. In others, very small increases in unemployment were 
seen for the lowest-wage workers, and even those increases were 
temporary. Most of the economic research indicates that modest 
increases to the minimum wage have a negligible effect on employment, 
which is much more affected by other economic factors. The benefit of 
an increase to those workers at the minimum wage level outweighs the 
negligible effect on employment levels, and ADA strongly supports 
action on legislation to adjust the current minimum. ADA forged the 
coalition that led to the last increase in the minimum wage, and we can 
do so again.
  All three prongs of ADA's program--JOBS, SOCIAL SECURITY, and MINIMUM 
WAGE--are of a piece, and are essential to restoring the American 
middle class. The Republicans are raring to enact slashing cuts that 
mirror those of the Tories of the UK, a formula for a double-dip 
recession or worse. We know better. Americans need jobs. Our country 
needs refurbishing. Workers need jobs that pay for housing, food, 
education, and a decent standard of living. Workers pay Social Security 
taxes, so the elderly, disabled, widows, and orphans can survive above 
poverty. And minimum wage workers must not be left behind. ADA stands 
ready to build the Liberal movement to carry out this agenda.

                          ____________________