Santa Claus made a pre-Christmas visit on Oct. 24, showering billions of dollars in tax breaks on the rich and shelling out more billions as outright gifts to some of America’s richest corporations.
As has been so often the case lately, he left chunks of coal in the stockings of the seven million unemployed, a half-million of whom have lost their jobs since Sept. 11.
The gifts came wrapped in the $100 billion ‘stimulus’ bill rammed through the House of Representatives by the Republican leadership. The measure, passed by a vote of 216-214, with four Democrats in favor and seven Republicans against, gives retroactive tax breaks of as much as $1.4 billion – and $100 million to 16 – of the richest and most profitable corporations, while the bottom 60 percent of all taxpayers will receive an average tax cut of $67.
Still smarting from the Oct. 11 Senate filibuster that blocked a measure to provide relief for laid-off aviation workers, AFL-CIO President John Sweeney called the House action a ‘total disgrace’ and a ‘shameless approach’ to stimulating economic activity.
‘Republicans suggest that giving corporations money will keep them from cutting back on workers. But Congress just handed the airlines $15 billion and they proceeded to lay off 140,000 workers,’ he said.
Sweeney added that the legislation offers ‘no guaranteed aid’ to the half-million working families who ‘need help now’ to pay rent, buy groceries and pay for health care.
Robert McIntyre, director of citizens for Tax Justice, was even sharper in his criticism of the House bill, calling it a ‘feeding frenzy’ by Corporate America made possible by the many elected officials who, he said, went along with ‘this monstrous demonstration of greed.’
The battle now goes to the Senate where the Republican minority, mindful of the fact that 10 Democrats voted for the Bush tax cuts earlier this year, are preparing their own legislation that, in many ways, is even more favorable to those who neither need or deserve it.
A statement by the Center on Budget Policy and Priorities (CBPP) said legislation being prepared by Sen. Charles Grassley of Iowa is ‘more heavily tilted’ toward the wealthiest taxpayers than the House-passed measure and would ‘shower’ $68 billion on the top 5 percent of those filing income tax returns. CBPP says a married couple with two children with an income of $66,500 or less would receive no tax benefit from the Grassley legislation.
The New York Times calls the plan being put together by the Republican Senate leadership ‘an almost shocking’ proposal that transfers more than half of the tax cut to the wealthiest 1 percent of taxpayers.
‘Cutting taxes for the wealthy in the next fiscal year does nothing to stimulate the economy now and undercuts the whole idea of equity in the tax system,’ the Times said in an Oct. 30 editorial.
The skirmishing over the size and scope of any stimulus package came as a Oct. 30 Commerce Department release showed a continued decline in gross domestic product, accompanied by a sharp pullback in consumer spending and large cuts in business investment in new plant and equipment.
The conference board announced that consumer confidence fell to a seven-and-a-half-year low in October, fueling predictions that the 0.4 percent decline in production during the third quarter will be followed by an even sharper decline of 1 percent or more during the remaining months of the year.
Although the latest unemployment statistics, scheduled for release Nov. 2, were not available at press time, they are expected to continue their upward climb.
Research by the AFL-CIO points to the fact that the official count will be even more distorted than usual and that large numbers of unemployed workers will not appear in the official count that now stands at some 575,000 jobs lost since 9/11.
In its weekly economic impact report, the AFL-CIO said, ‘In some industries like hospitality, workers are not formally laid off but are told not to come in next week or have their hours reduced.’
Layoffs by hospitality businesses, totaling nearly 135,000-88,000 of them women – since Sept. 11 exceed layoffs in any other sector of the economy.
Nearly half – 260,000 – of the more-than-half-million workers who have lost jobs in the last several weeks have been women, many of whom are former welfare recipients whose earnings are too low for them to qualify for unemployment compensation.