Center for American Progress

The Bush Economic Summit: What the Cheerleaders Won’t Tell You
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President Bush is scheduled to conduct an economic summit this week to highlight some of his economic priorities for his next term. Among the topics to be discussed are the state of the economy, taxes, and social security.

While we suspect that the conference will be little more than an exercise in cheerleading for some of the president’s initiatives, we thought we would remind President Bush that not everyone agrees with his assessments of our economic situation or what the solutions are to our nation’s challenges.

During the president’s first term, he drove us from record surpluses to massive deficits in record time. The tax changes of 2001 and 2003 have shifted the tax share away from wealth and high income individuals; and onto work and the middle class. This comes at a time when domestic priorities are not being met, and we have additional need for revenue to finance military operations and to prepare for the coming retirement of the baby boom generation. In short, we are headed in the wrong direction on tax and budget policy.

Even the administration’s own figures show that Social Security is not facing a crisis. Social Security can pay full benefits until 2042 if you believe the Social Security Administration or until 2053 if you believe the Congressional Budget Office. Yet, President Bush wants to radically change the face of this insurance program that has protected working families for almost 70 years. His "solution" to a non-existent crisis requires large benefit cuts and massive new deficits to establish individual accounts.

The president spoke during the campaign on "turning the corner" on the economy. Yet the job-loss recovery has left many people behind, despite the president’s promises that his massive tax cuts would help create millions of new jobs in 2004 alone. The job market continues to under-perform. President Bush is the first president since Herbert Hoover with a net job loss during his term. This weak labor market has meant that incomes for the middle class have fallen—the average real income for those in the middle 20% of the income distribution fell by over $1,500 from 2000 to 2003. And for all of 2004, wages have not kept pace with inflation.

We are also faced with growing trade deficits that threaten the long-term prosperity of the nation, and that risk a sudden, harmful correction, especially in light of large budget deficits. The dollar has suffered, and foreign investors are nervous about this administration’s ability to get our fiscal house in order.

 

 

 

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