LCraig109

Larry Craig's Wrap Up on:

Budget and Economy

Our economy remains strong. As of December 2006, the U.S. economy has grown 58 consecutive months, driving the stock market to four years of consistent growth and record highs. With this unprecedented growth has come over seven million new jobs since August 2003 — more than all the other major industrialized countries combined. Our party's pro-growth tax relief of 2001 and 2003 successfully tapped our economy's potential and is responsible, in large part, for the rapid economic expansion in our country. This past year I joined with Congress to extend numerous expiring tax provisions in order to prevent tax increases for millions of Americans. In May, Congress passed the Tax Increase Prevention and Reconciliation Act, which reduced the rates on dividends and capital gains through 2010 and shielded nearly 15 million middle-class families from the harmful effects of the alternative minimum tax (AMT) for an additional year. In addition, I recently voted for and Congress approved the Tax Relief and Health Care Act, which will extend the research and development tax credit and college tuition deduction.

While this is good news, ensuring long-term growth requires fundamental reform to the federal budget process and the U.S. tax code. This past Congress, I helped introduce the Stop Over-Spending (S.O.S.) Act to fix our broken budget process by capping spending, reducing the deficit, and balancing the budget by 2012. Any real budget reform, however, must also include an overhaul of America's current tax code. Americans deserve a simple, fair tax system, and I recently helped launch a bi-partisan coalition that will work to make key reforms to our broken tax code in the next Congress.

From http://craig.senate.gov/wrapup109.cfm

Analysis of the 109th Congress on Budget and Economy:

In summary, legislation enacted by the 109^th Congress swelled deficits even beyond the effects of emergency legislation, cut taxes primarily for the most well-off, and squeezed assistance for some of the nation’s poorer and more vulnerable families. By so doing, the 109^th Congress contributed to further widening the income gap between the most well-off households and other Americans -- even as Census and other government data showed the economic gains from the current recovery are being distributed more unevenly than in any other recovery since the end of World War II.

From http://www.cbpp.org/policy-points9-29-06.htm

FROM SURPLUS TO DEFICIT: Legislation Enacted Over the Last Six Years Has Raised the Debt by $2.3 Trillion

In short, Congress’ fiscal performance has been dismal. Underlying this sizeable increase in debt has been the second largest deterioration in the budget deficit for any six-year period in the past half century.[2]

Congress’ actions over the last six years are particularly disquieting in light of the impending budgetary challenges posed by rising health-care costs and the retirement of the baby-boom generation. Faced with these challenges, Congress should have acted to reduce the debt, not to increase it.

Moreover, as shown in Table 2, the costly tax cuts passed by the last three congresses were regressive; that is, they benefited the very well-off more than any other income group. Consequently, these congresses contributed to further widening the income gap between the best-off households and other Americans, even as Census and other government data showed that the economic gains from the current expansion were being distributed more unevenly than the gains from any other expansion since the end of World War II.

http://www.cbpp.org/12-13-06bud.htm

What's wrong with the economy?
1. Profits are up, but the wages and incomes of average Americans are down.

Inflation-adjusted hourly and weekly wages are below where they were at the start of the recovery in November 2001. Yet, productivity—the growth of the economic pie—is up by 14.7%.¹ (Figure A)

Wage growth has been shortchanged because 46% of the growth of total income in the corporate sector has been distributed as corporate profits, far more than the 20% in previous periods.²

Consequently, median household income (inflation-adjusted) has fallen five years in a row and was 4% lower in 2004 than in 1999, falling from $46,129 to $44,389.³

Figure A. Wages have not kept pace with productivity growth

2. More and more people are deeper and deeper in debt.

3. Job creation has not kept up with population growth, and the employment rate has fallen sharply.

4. Poverty is on the rise.

5. Rising health care costs are eroding families' already declining income.

http://www.epi.org/content.cfm/pm110

Annual New Debt, 1980 - Present
Peak spending under Bush Sr. 431,989,899,919.78; the least spending under Clinton, 17,907,308,271.43.

http://www.marktaw.com/culture_and_media/TheNationalDebt.html

Since 2000, the number of poor Americans has grown by more than 6 million

The Poverty Line

Food, shelter, clothing, health care, transportation - these are only the beginnings of the basic necessities of modern American living. Each year, the federal government calculates the minimum amount of money required by families to meet these basic needs. The resulting calculation is what is commonly referred to as the "poverty line." Using 2004 data, the government has set the 2005 poverty guidelines at:

Size of Family Unit	Weighted Average Thresholds
One person	9,973
Two people	12,755
Three people	15,577
Four people	19,971
Five people	23,613
Six people	26,683
Seven people	30,249
Eight people	33,610
Nine people or more	40,288

SOURCE: U.S. Census Bureau, Income, Poverty, and Health Insurance Coverage in the United States: 2005

http://www.usccb.org/cchd/povertyusa/povfacts.shtml

Number in poverty increase 2000 to 2005, nearly equal 2004-2005. See in this chart.

Number in Poverty and Poverty Rate: 1959 to 2005

http://www.census.gov/hhes/www/poverty/povertyrate.html

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