Weapons of Mass Discussion: Edwards on the Economy of Ohio

Tuesday, September 21, 2004

Edwards on the Economy of Ohio

By Matt Hurley for the TIB Network:

"Make no mistake. Bush's tax agenda is the most radical and dangerous economic agenda to hit our shores since socialism a century ago," said Edwards. "Like socialism, it corrupts the very nature of our democracy and our free enterprise tradition. It is not a plan to grow the American economy. It is a plan to corrupt the American economy and shrink the winners circle."

In his speech, Edwards criticized the current administration as a Do-Nothing Presidency when it comes to creating jobs, bringing down health care costs or helping young people go to college. President Bush's wrong choices have hobbled the Ohio economy and destroyed the historic strength of the middle class.

Returning money to its rightful owner "corrupts the very nature of democracy and our free enterprise tradition"? How do you figure that?

Let's talk about jobs:

The economy has grown 4.8% in the past year, as fast as any year in nearly two decades.

Productivity grew at the fastest 3-year rate in more than 50 years.

According to an analysis conducted by the Treasury Department after the tax relief was implemented last year, economic growth would have been more than 3 percent lower and 2 million fewer Americans would have been working at the end of last year.

Since last August, over 1.5 million new jobs have been created.

The unemployment rate has fallen from 6.3 to 5.6 percent, below the average of the 1970s, 1980s and 1990s.

This job growth is widespread – employment over the last year was up in 41 of the 50 states, and the unemployment rate was down in 47 of the 50 states.

Real after-tax incomes are up by 11 percent since December 2000. This increase is mostly due to the President’s tax relief and is substantially better than those following the last recession.

Homeownership rates are at record levels – nearly seven out of ten American families own their own home today.

Household wealth is near a record high.

Consumer confidence is up from the levels seen at this time last year and is in the upper third of its historical range.

Inflation remains low by historical standards, as do mortgage rates.

Hardly sounds like a corruption of the system to me. And when you consider that we lost a million jobs in the first quarter after 9/11, we've come a long way! I woldn't characterize George W. Bush as a "Do-Nothing President" when it comes to jobs.

Let's talk health care:

Established new, tax-free Health Savings Accounts (HSA) which allow Americans to own and control their own health care.

Opened or expanded community and rural health centers with the goal of serving an additional 6.1 million people who live in underserved and rural areas.

Granted waivers and flexibility to states to extend eligibility under Medicaid and the State Children’s Health Insurance Program (SCHIP) to an estimated 2.6 million low-income Americans.

Implemented a new rule to lower drug costs for millions of Americans by strengthening competition between generic and brand-name drugs, saving American consumers more than $35 billion in drug costs over the next ten years.

Created a Medicare Prescription Drug Benefit to help seniors pay for their medicines.

Still have some work to do? Sure. But I wouldn't characterize George W. Bush as a "Do-Nothing President" on health care.

Let's talk College (notice that Kerry/Edwards has shifted the education debate off of No Child Left Behind):

Pledge to Financial Aid. Under the President's 2005 budget, student aid for higher education would increase to more than $73 billion -- an increase of $25.9 billion (55%) since 2001. Almost 10 million students and parents would receive one or more grants, loans or work-study awards. In addition, state governments as well as colleges and universities have increased student aid so that the combined Federal, state and institutional support now tops $105 billion. ("Trends in College Pricing," College Board, 2003)

Pell Grants: The President's 2005 budget requests $12.9 billion in grants for needy undergraduate students - an increase of $4.1 billion (47%) since 2001 - which will help an estimated 5.3 million low-income students pay for higher education. This is one million more students since President Bush took office. The increase would fully fund the cost of maintaining the $4,050 maximum award in 2005-06. Students who take rigorous high school courses are eligible to receive a $1,000 Enhanced Pell grant bringing the total maximum award to $5,050.

Jobs for the 21st Century: At a time when 80% of the fastest growing jobs require some kind of post-secondary education, the President’s initiative provides $250 million for a new, employment-focused competitive grant that will leverage the expertise of the nation’s community and technical colleges and help workers wishing to retool, refine, and broaden their skills.

Attracting More Students Into Math And Science Subjects: The Presidential Math and Science Scholars Fund will establish a new public-private partnership to provide $100 million in grants to low-income students who study math or science beginning in 2006. Under this plan, low-income college students would receive up to $5,000 each to study math or science.

Life-Long Learning: The President proposed establishing a new $125 million Community College Access Grants Fund to improve the services that community colleges provide and encourage high school students to continue on to college, especially for low-income and minority students. To make worker training more affordable, the President proposed to make loans available to help workers pay for short-term training that leads to an industry-recognized credential or certificate. And, the President’s plan would increase post-secondary education options and eliminate needless student aid restrictions – particularly for adult students – giving them greater access to the skills they need to succeed.

I don't think you can characterize George W. Bush as a "Do-Nothing President" when it comes to higher education either.

While all of America has been squeezed by the Bush economy over the last four years, Ohio has been hit particularly hard by the economic downturn, with record job loss, skyrocketing costs and falling incomes.

Edwards today unveiled "Fighting for a Stronger Ohio: John Kerry and John Edwards Plan for Ohio's Economic Recovery" which details the Kerry-Edwards plan of how to restore economic prosperity to Ohio.

The disastrous state of the Ohio economy is the result of President Bush's failed leadership and dangerous ideology. In the last month, Ohio lost an additional 12,000 jobs bringing the total under George Bush to 237,000 jobs, more than one in four in the whole country. The manufacturing base in Ohio has been especially hard-hit, with 173,000 jobs lost. The typical family has seen its income fall by more than $1,500.

The "disasterous state of the Ohio economy is the result of the RINOs running our state in Columbus, not President Bush. I've covered this material before and I direct the reader here for more information on this subject.

George Bush's presidency has also been a very bad for Ohio businesses. Real business investment and exports are both down under George Bush, the first decline during a Presidential term in over 70 years.

George W. Bush has not fought against this tide of job loss. He has not enforced our trade laws and has failed to address Chinese currency manipulation, putting American businesses at a disadvantage. While the Bush administration praised outsourcing as an economic strategy, thousands of Ohioans have seen their jobs shipped overseas.

For the skinny on the outsourcing "problem, I refer the reader to this website which should clear that whole thing right up.

Near as I can tell, the whole Chinese currency manipulation business just exploded in the last couple of weeks. (See story here) Unless there is something else that Mr. Edwards is actually talking about, I can't imagine why he'd be attacking the President for something that is just now being examined.

Edwards also criticized the President's new tax agenda as corrupting American values.

"It's time to return to the idea that made this country great," said Edwards. "Instead of helping wealthy people protect their wealth, we should reward the work of America's middle class."

The president has spent the past four years working to shift the tax burden onto people who work, while eliminating taxes on unearned income. The Bush administration's new "tax reform" plan, as revealed in a memo released by his former Treasury Secretary, is a reckless continuation of the President's history of serving special interests on the backs of working Americans.

The President's plan will raise taxes on typical families and take away deductions for home mortgages, charity and health care, hurting middle class families even more than before and rewarding special interests.

"The President's new 'tax reform' is the ultimate expression of his values," said Edwards. "We don't know all of the details, but we know that people who inherit hundreds of millions will pay nothing; firemen and waitresses and working people will pay everything. And we know his plan will take away the most important incentive for the single most important form of ownership: it will eliminate entirely the tax deduction for home mortgage interest."

How does cutting taxes create jobs?

First, the President’s tax relief allowed American families to keep more of what they earn. When families have more money to spend, they will demand a good or service in the market place. When there is more demand, businesses have to produce more goods and services, and they are more likely to hire additional workers.

Second, by cutting rates, President Bush reduced the tax burden on the 90 percent of small businesses organized as S corporations, partnerships or sole proprietorships and who pay their taxes at the individual income tax rates. Small businesses create 7 out of 10 jobs in our economy. Cutting marginal income tax rates allows small businesses – America’s job creators – to invest more of their money in their businesses to expand and create more jobs.

Third, the President’s tax relief gave America’s businesses, large and small, an increased incentive to make the investments they need to stay competitive and to create more jobs. His tax relief quadrupled the limit on small business expensing to $100,000 and offered larger businesses 50 percent bonus depreciation. These tax provisions reduce businesses’ upfront costs when they purchase new computers, trucks and other equipment to make their employees more productive. More productive employees means higher wages and more job opportunities for the companies that make the new equipment.

Who got the tax cut? FactCheck.org has that answer:

Actually, according to a nonpartisan analysis by the Urban-Brookings Tax Policy Center, nearly 75% of all families are getting a tax cut this year from the two tax bills signed into law by President Bush in 2001 and 2002. The amounts vary widely, but the average is $1,217 – a dozen times more than Dean suggested.

Even families making only $20,000 to $30,000 a year are getting an average cut this year of $638. And 98.4% of that group -- "middle-class" by almost anybody's standards -- are getting some tax reduction, exactly contrary to what Dean said. And the amount of money is significant -- it increases their after-tax income an average of 2.7 percent above what it would have been before the Bush tax cuts.

And for those farther up in the middle-class hierarchy -- making $75,000 to $100,000 a year -- the Bush tax cuts are worth an average of $2,543 this year -- 25 times more than the $100 figure Dean suggested. More than 20 million American families earn $75,000 a year or more, and will be getting tax cuts in the thousands of dollars this year, not the the hundreds.

Generally, the only ones who get NO cut are those making less than $10,000 a year -- and few would think of them as middle-class. They’re the ones who earn too little to pay federal income tax in the first place, mostly singles and elderly retirees. Only 7 percent of them get a tax cut.

I have no way of knowing what exactly Edwards is talking about when he says that the President wants to eliminate the home mortgage interest deduction. The only thing I can see is the expressed desire to simplify the tax code: elimination of itemized deductions, including the home mortgage interest deduction, would be a part of that, I would think. But why make an issue of just that one deduction?

Kerry and Edwards have a detailed plan for a stronger American economy. They will create good-paying jobs in America by ending tax breaks for companies creating jobs overseas and cutting taxes for 99 percent of businesses. They will help middle class families with tax cuts and lower health and energy costs. Their plan for the economy will restore America's competitive edge by ending energy dependence and investing in more research and development. And finally, they will restore economic confidence by cutting the deficit in half in four years, and paying for every proposal.

"John Kerry and I will put America back on a virtuous path where work is rewarded, the middle class expands, and the American Dream is there for all who are willing to work for it," said Edwards.

Kerry and Edwards will risk 6.4 million jobs with a payroll reaching $350 billion. Did I mention that those insourced jobs pay, on average, 19.1% more than all US companies? It's true. We're talking good jobs here too. 34% of insourced jobs are in manufacturing. And those companies bring in $28 billion in annual federal taxes.

Kerry and Edwards want to risk 212,800 jobs right here in Ohio. I'm not saying those jobs will disappear. I am saying that they would risk those jobs with their policies of protectionism. How do we feel when our country gets hit with protectionist policies? We want to pull out, right? Why would it be different for countries who send far more business here than we send over there?

Once you strip away the fancy lawyer talk rhetoric, you see that Mr. Edwards is really advocating policies that could do serious harm to our job market.