STIMULUS BILL BEING CRAFTED-- WITHOUT
PRO-WORKER PROVISIONS

A $150 billion economic stimulus bill unveiled Jan. 24 after week-long talks between Democratic congressional leaders and the GOP Bush regime lacks several key provisions to help workers, AFL-CIO President John J. Sweeney said.

Instead, those provisions--everything from extending unemployment benefits to repaving roads to expanding eligibility for food stamps--would be lumped into a second “stimulus” bill that would come up later this year and that would face rockier sledding on Capitol Hill, due to budget rules and the time crunch from the presidential campaign.

“The…stimulus proposal simply is not enough to make a real difference for working families. It is up to the Senate to extend unemployment benefits and increase food stamps to get money into the hands of those who will spend it quickest and need it most,” Sweeney said. “Economists agree these programs will have the most immediate impact, and the most bang for the nation's buck. Anything less will not be sufficient to keep our economy from diving headlong into recession.

Sweeney’s remarks mark disagreement with House Speaker Nancy Pelosi (D-Calif.) “I can’t say I’m totally pleased by the package. But I do know it’ll stimulate the economy. If it doesn’t, there’ll be more to come,” she promised after the Democratic leadership and Bush reached agreement.

The key item for workers is individual and family tax rebates, ranging up to $600 per adult, $1,200 per couple, and $300 per child. But the package does not extend jobless benefits beyond 26 weeks, does not help people who must turn to Medicaid--run by financially strapped states--for health care, nor expand food stamps to more people. Sweeney said the jobless benefits were sacrificed in favor of business tax breaks.

Lawmakers and Bush are scrambling to inject money into workers’ pockets as signs of a slump, if not a second Bush recession, appear. They include the 0.3% jump in joblessness in December, to 5%, the largest decline in existing home sales in 25 years, and states facing budget deficits that force them to cut Medicaid money.

Pro-worker Democrats concede some items to help rank-and-file workers will probably get pushed into “Stimulus II,” the second piece of legislation, later. “There is nothing that puts people back to work more quickly than money that goes to building roads and bridges,” said Senate Budget Committee Chairman Byron L. Dorgan (D-N.D.). The Laborers, in particular, are pushing for such roadwork funds.

But Congress’ reaction, Dorgan says, is that infrastructure “should be part of the second stimulus package.” The same thing goes for extending jobless benefits beyond their current 26-week limit, a key issue since the number and percentage of such long-term jobless is notably higher than when the first Bush slump began in Feb. 2001. That recession officially lasted until that November, but it never really stopped for workers.

Senate Labor Committee Chairman Edward M. Kennedy (D-Mass.) will try to tack on an extra 20 weeks of jobless benefits, but he hasn’t said if it would be in this stimulus bill--which lawmakers want to send to Bush by Feb. 15--or the next one.

Republicans are concentrating on business tax cuts, although they and Bush have dropped their insistence that the first stimulus bill should make his 2001 and 2003 tax cuts for the rich permanent. They’re due to end in 2010.

Instead, making the big tax cuts permanent, along with rebuilding roads, schools, bridges and airports, the extended jobless benefits and the boost to Medicaid, may all get shoved into the debate over “Stimulus II,” later this year. That potential legislation faces another problem: The Democratic-run Congress’ pay-as-you-go rules.

Those rules call for each dollar of new spending or tax cuts to be offset by increases or decreases elsewhere, so that the federal budget deficit won’t balloon. The rules were ignored--over the protests of Democrats from Bush-carried districts--in December when lawmakers made sure the alternative minimum tax, designed to get the rich to pay their share, didn’t hit more middle-class families.

Reports say the pay-as-you-go rules will be ignored again, this time over the protests from the Republican Right Wing. Its members don’t believe there should be a stimulus package at all. But the rules will be in force the next time. “We believe in” pay-as-you-go, Senate Majority Leader Harry Reid (D-Nevada) said of the “Stimulus II” bill. “As far as I’m concerned, we should pay for everything.”