This week the U.S. House of Representatives will take up an economic stimulus package that indicates just how much the House has sold out to the big corporate and wealthy interests at the expense of poor and working class people. It is class warfare. According to a New York Times editorial on October 20, the bill has $54 billion in accelerated tax cuts with every penny going to the top 30% of taxpayers and half going to the top 5%. 80% of the benefits from the capital gains tax cuts would go to the top 2% of households, and, according to the Congressional Budget Office, only $2.3 billion of the $100 billion stimulus for 2002 would be spent on benefits for unemployed workers who would be the most likely to spend it to stimulate the economy.
It is also poor economics because it would lower rates on capital gains held more-than-one but less-than-five years and if investors took advantage of the lower rates to raise cash, share prices would drop. Elimination of the corporate alternative minimum tax would cost $25 billion in 2002 and would not guarantee any new investment, but would give a windfall to companies that usually find a way to elude taxes anyway. Such corporate tax breaks would reduce their taxes on the state level and force states to reduce spending, hindering economic recovery. Unemployment in South Carolina climbed from 4.2% in August, 2000 to 5.4% in August, 2001, with 28 of our 46 counties having more than 6% and 9 counties over 10%. Since the August unemployment figures were reported, several other big layoffs have been announced. On October 19, the South Carolina Board of Economic Advisors, who are our state's official economic forecasters, predicted a $310 million reduction in budget estimates for the current budget year. The reduction is the largest dollar amount in history and will result in 4.2% state budget cuts across-the-board.
For the past decade or so, the increasing income disparity between the wealthy and the poor and working class has been unprecedented in U.S. history. If the average pay for production workers had risen at the level as CEO pay, the annual workers salary would be $120,491.00 - not $24,668.00. The wealthiest 1% of Americans control about 38% of America's wealth. The bottom 80% control 17% of America's wealth. The top 1% of stock owners have 48% of stock holdings.
Congress already delivered a bonanza to the wealthy earlier this year when they passed the Bush tax cut plan that gave about 25% of the largesse to the richest 1% and well over 50% to those with incomes over $100,000.00. Congress should subsidize an increase in unemployment benefits that will give money to the poor and working class whose safety net was diminished by "welfare reform." They will spend their money at the grass-roots level that will really stimulate the economy. Congress should increase spending for better public education, health care, housing, and transportation to benefit everyday people --- the poor and working class.
Rather than declaring war on the poor and working class, Congress needs to declare war on our fossil fuel and nuclear energy dependency which has a lot do with the "War on Terrorism." Saudi Arabia has been our biggest oil and military buddy in the Arab world for 70 years. 10 of the 19 September 11 hijackers were Saudis and Saudi Arabia has also been identified as the major financier for the most radical, terroristic networks of Islamic fundamentalists, including Osama bin Laden's Al Queda organization. To further substantiate how oil policy dominates our foreign policy, Chris Mondics reported for Knight Ridder Newspapers on October 21 that the U.S. government "actively supported a proposal by Houston-based energy developer Unocal to build a 1,000 mile pipeline through Afghanistan to link gas fields in Turkmenistan" and worked with the Taliban until 1998 to cut such a deal even though the U.S. knew of bin Laden's terrorist activities.
Our only long-term solution is to develop renewable energy sources like the wind and the sun and encourage conservation, but the politicians who run our government are subservient to the giant energy cartels who control fossil fuel and nuclear power. They spend enormous sums to fight wars for oil and gas and subsidize about anything big energy asks for but they see no big campaign contributions in helping develop alternative sources of energy. For example, South Carolina's U.S. Rep. Lindsey Graham, who is running to replace the retiring U.S. Senator Strom Thurmond, voted against a $30 million increase in renewable energy programs in 1995, and against a $45 million dollar solar energy research and development bill in l996.
Hopefully, the South Carolina Congressional Delegation and the entire Congress will address the needs of the poor and working class in the stimulus bill debate this week and will also take a stand for conservation and renewable energy.