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Administration's Budget Doesn't Offer Much For U.S. Workers

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Newton B. Jones
International President

Funding makes working families a low priority

IT IS THROUGH the federal budget that a president and his administration show their priorities. The budget for fiscal year 2005 makes it clear that taking care of American workers is not a high priority for this administration.

While the U.S. loses manufacturing jobs by the millions each year, the White House is proposing a 60 percent funding cut for the Manufacturing Extension Partnership, a program with a proven track record in helping manufacturers modernize, increase productivity, and create and retain jobs.

And even as members of the current administration encourage corporations to outsource American jobs to other countries, the proposed budget would cut the Trade Adjustment Assistance program that retrains workers who lose their jobs because of our trade laws.

While China continues to increase its share of U.S. imports and expand its practice of routinely violating trade laws, the proposed budget eliminates a China-specific trade enforcement and compliance program that Congress enacted in an effort to keep them in line.

The Bush administration’s proposed budget cuts two vital program areas so significantly that we could see workers and low-income families fighting each other for scarce funds.

The proposed budget calls for more than $550 million in real dollar cuts to Workforce Investment Act (WIA) and Employment Service (ES) programs. These two funding categories oversee a wide variety of job training and labor exchange programs, including vocational-technical training, employment services for unemployed workers, and vocational rehabilitation programs.

Since 2001, the Bush administration has asked Congress to slash nearly $2 billion in real dollars from these two program areas. The most recent round of cuts would force unemployed workers and poor children just entering the labor market to compete with each other for government programs to help them get training and find jobs.

Social “insecurity” takes center stage

WHAT THE PROPOSED budget does not do is reassure working families regarding the two problems they most frequently identify as being serious concerns: healthcare and retirement.

Despite soaring health care costs for employers and workers alike, next year’s budget does nothing to shore up employer-based health care, which serves roughly two-thirds of insured Americans. And while states report huge increases in Medicaid spending that threaten their state budgets, the White House’s proposed budget calls for slashing Medicaid funding for states by $45 billion.

The budget’s only nod to our country’s mammoth healthcare funding crisis is a proposal to expand Health Savings Accounts (HSA) and to offer health care tax credits. HSAs are a poor substitute for healthcare insurance. They rely on taxpayers being able to predict their healthcare costs a year in advance, leaving workers vulnerable to catastrophic losses when they experience an unexpected medical problem.

And while anyone with medical bills will welcome a tax credit of equal size, few people pay taxes equal to the hundreds of thousands of dollars that any complex surgery costs. These people would need to re-mortgage their homes, borrow heavily, or simply pass up the life-preserving medical treatment in question. No one should be asked to make such a choice.

Even veterans hospitals would get less funding under the proposed budget. While new injured veterans return from Iraq every day and the White House eyes other countries to attack, the proposed budget grants VA hospitals less in 2010 than this year.  But it is when the proposed budget turns to retirement income that we see how radical and reckless it is. It begins with a plan to privatize Social Security, a plan that has been widely criticized as radical, risky, and expensive — not just by Democrats, but also by key Republicans. And the budget goes on to propose undermining pension protections for workers by cutting federal pension guarantees, outlawing benefits that help workers in the event of a plant shutdown, and restricting the benefits that workers can earn at companies with financial difficulties.

Icing on the cake: more rewards for tax avoiders

TOGETHER, THE BUDGET’S inadequate funding for healthcare and retirement programs creates a level of social “insecurity” we have not experienced for decades. The Bush administration justifies these cuts in the name of “fiscal discipline.” They are necessary, the logic goes, in order to reduce the deficit.

But while the proposed budget cuts funding for programs that help workers, it rewards corporations with tax incentives that do not suggest “fiscal discipline,” but giveaways.

In the years 2001-2003, 82 of America’s largest and most profitable corporations paid no federal income tax in at least one year. Twenty-eight enjoyed negative tax rates — they got money from the federal government — despite enjoying U.S. profits of $44.9 billion.

The White House and Congress need to recognize that workers impact the economy at least as much as corporations do. When workers feel uncertain about the future, the economy suffers.  Funding federal programs that reduce financial insecurity can stimulate the economy and reduce the deficit.

Reporter  V44N2
Published on the Web: June 15, 2007

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