WASHINGTON—Lawrence Mishel, president of the Economic Policy Institute told a Senate hearing Jan. 21 that unemployment is a "dire emergency" that requires federal action "on a scale that can make a difference."
Mishel urged the House and Senate to approve $400 billion to create millions of jobs in infrastructure building and repairs, extended unemployment compensation and subsidized COBRA health insurance.
His testimony came on the heels of the Democrats loss of a Senate seat in Massachusetts and with clear signs that Democratic senators are in panicky retreat on any programs that increase federal deficits. Already, they have sharply scaled back to only $82.5 billion the $174 billion "Jobs for Main Street" bill approved by the House by a razor-thin margin of 217-212 last Dec. 16. Not a single Republican voted for it.
The House version would reprogram $75 billion in unspent TARP (Toxic Assets Recovery Program) to be used to pay for job creation programs. House Speaker Nancy Pelosi said, "This legislation brings jobs to Main Street by increasing credit for small businesses, rebuilding infrastructure and keeping police, and firemen, and teachers on the job ... these investments are fully paid for by redirecting TARP funds from Wall Street to Main Street."
The Senate, by contrast, simply rescinds $150 billion in unused Wall Street bailout money rather than reprogramming it to assist jobless workers.
Mishel is not alone in his warning against nickel and dime federal programs. Deborah Weinstein, executive director of the Coalition on Human Needs wrote last month in the Huffington Post, that "by any meaningful measure our economy is still in distress." She called on the Senate to approve "an even stronger bill" than the House version.
"One in four children in America is poor," she said. "Most of the unemployed are struggling to put food on the table and keep roofs over their heads. Foreclosure rates, food stamp enrollments, and the number of families that can't consistently afford enough nutritious food have all skyrocketed to record levels....The jobless rate will likely rise for another year."
The most effective way to counter the crisis is measures that target job creation to the hardest-hit communities, she said. "We need programs that will put people to work right now, like summer jobs for youth and short term school repair projects," Weinstein said. "For a sustained recovery we also need to continue work and learning so people earn while on a pathway to long-term jobs with career potential."
Federal program should target assistance to "families who are hurting the most by providing more supports such as unemployment benefits, food stamps and tax credits," she continued.
Another urgent need, she said, is federal assistance to state and local governments so hard-pressed they are expected to terminate 900,000 or more workers in the coming year to balance their budget, according to the Center on Budget and Policy Priorities.
Both EPI and CHN are member organizations of Jobs for America NOW, a coalition of 60 labor, civil rights, and community organizations that is mobilizing across the nation to demand that the Obama administration and Congress approve a massive federal program to create jobs and assist the unemployed.
The Obama administration too came in for criticism. Former Labor Secretary, Robert Reich decried the administration's proposal for a three-year freeze on federal discretionary spending at a time when only massive federal spending on job creation can jump-start the economy. Reich writes that a spending freeze will delight Wall Street but wreak more havoc on Main Street.
Reich called for a "second stimulus" package focused on helping fiscally-strapped state and local governments avert massive layoffs. Reich also urged relief for millions of homeowners facing foreclosure on their homes.
EPI points out in an article posted on their web site that the nation's 10 percent jobless rate "does not capture the severity of the crisis for minority workers in many regions of the country."
In five states---Alabama, Illinois, Michigan, Ohio, and South Carolina---the unemployment rate for Black workers exceeds 20 percent. The highest is Michigan with 27 percent unemployment among African American workers. The Hispanic jobless rate is close behind exceeding 12 percent in Arizona, California, Connecticut, Florida, Nevada, New Jersey and New York.
EPI researcher Josh Bivens debunks rightwing ideology in a Jan. 10 article titled "Budgeting for Recovery-The Need to Increase the Federal Deficit to Revive a Weak Economy." He writes, "The notion that all deficits are bad is a simplistic political idea and flies in the face of sound economic theory and economic history."
He adds, "In an ailing economy, deficit spending is an essential tool for getting the economy off life-support and back to health." Right now, he said, "the greatest danger regarding deficits is that they will be too small to provide the public relief and investments the economy needs."
Bivens also refutes the argument that deficits will "burden future generations," a favorite right-wing canard. He writes, "Wise public investments made now to jump-start a recovery and build the infrastructure will benefit future generations while not crowding out any private investments that may benefit future generations."
He zeroed in on the real cause of inflation, most of it generated during the George W. Bush Administration: tax cuts for the rich, and the current recession, itself, that drove down tax revenues and drove up spending on safety net programs. Bivens does not mention the trillion dollar wars in Afghanistan and Iraq as a factor in the deficits.
Photo: Marcio Jose Sanchez/AP