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Corporations Profit Under the Guise of Patriotism
12 November 2001
Our national leadership has been mouthing pieties about all-for-one patriotism but practicing spare-the-rich favoritism, in the wake of the terrorist attacks. Under the guise of an "economic stimulus", the GOP-controlled House of Representatives has been busy allocating long-sought benefits for powerful interest groups, while urging a spirit of sacrifice for the rest of America. Reports about skyrocketing unemployment rates have darkened the economic outlook for many low-to-moderate-wage workers.
But the national stewards of the federal budget seem determined to make sure the rich don't starve. On Oct. 25, the House passed a bill that gives corporate interests the "wish list" of tax cuts they've long been seeking. Regrettably, corporate lobbyists used the September tragedy and the consequent need for an economic stimulus as a rationale for their pet tax loopholes. Even more regrettable is that Congress appears ready to let them get away with it.
Many budget watchdog groups and some congressional Democrats have strongly denounced the House bill. The Senate Finance Committee last week passed a stimulus plan (featuring expanded programs to help the jobless) that differs considerably from the House's measure. But it is given little chance of survival. The House bill has the backing of the Bush administration and, during this period of public deference to the commander in chief, that support may prove decisive. More than 95 percent of the legislation consists of tax cuts, according to the Center on Budget and Policy Priorities, a Washington-based think tank that monitors federal spending, and all but 10 percent of that is allocated for corporations and business and upper-income people.
"Essentially, this legislation is a vehicle for tax cuts that have little to do with boosting the economy now or assisting unemployed workers," concluded an analysis by the group.
Among the proposals in the House bill are reductions in the capital gains tax rate, repeal of the corporate Alternative Minimum Tax (which was passed in 1986 to help reduce abuse of tax loopholes), accelerating corporate tax deductions for equipment depreciation, cutting taxes for the top 30 percent five years ahead of schedule and extensions of off-shore tax shelters. The only provision of the bill that does not disproportionately benefit upper-income taxpayers, according to the center, is the measure to extend the tax rebates to taxpayers who missed out on the refund last summer. The bill makes only a minimal effort to provide assistance for the huge number of jobless workers soon to be crowding lines for unemployment compensation. "Only a small fraction of unemployed workers would receive added unemployment insurance benefits when their regular benefits run out or secure any assistance in maintaining their health insurance under this bill," the center noted.
According to recent figures from the Bureau of Labor Statistics, 415,000 people lost their jobs in October, the most for a single month in nearly two decades. About 25 percent of those lost jobs were a direct result of the terrorist attacks on Sept. 11, according to Thomas L. Nardone, chief of the Labor Department division that compiles unemployment numbers.
Since the spike in unemployment began last March, nearly 900,000 jobs have disappeared. This decline is the largest in so few months since the 1990-1991 recession. The terrorist attacks provoked the loss of half of those jobs and the decline is almost twice what forecasters had expected. The terrorist attacks cause job cuts at airlines, travel agencies, hotels, restaurants and car-rental agencies, Nardone said. Thus the economic impact has been hardest on low-wage workers. Nationally, unemployment rose among every group. However, in keeping with the historical pattern of last-hired-first-fired, African-Americans suffered the largest jump in joblessness with a 1 percentage point increase in their jobless rate in October alone. After reaching a record low unemployment rate of 7.2 percent last fall, African-Americans are now jobless at a rate that hovers near 10 percent.
With the pace of layoffs accelerating as the economy moves more fully into a recession, forecasters are predicting that another 1.5 millions jobs may be lost over the next three quarters. What kind of assistance will be available for these jobless workers? Politicians are pushing hard to help their corporate benefactors recover from the terrorist-triggered recession. Too bad, there's no one in leadership looking out for average workers.