Making the case — again — for an economic rebound
With federal stimulus checks in the mail this month, it's worth reconsidering the much-trumpeted bipartisan accord that was reached in January to jumpstart the U.S. economy — and all that it fails to do. Read EPI's latest Policy Memo for an assessment of where we are, and where we should be, in terms of stimulating the U.S. economy.
The weakest recovery since WWII
The Commerce Department's announcement that GDP growth continued to falter in the first quarter of 2008, coming on top of rising unemployment and three straight months of declining employment, makes it all but certain that the nation has entered a new recession whose starting date, when it is finally declared, will be sometime in early 2008. A new EPI report, A Feeble Recovery, provides a comprehensive look at the business cycle just concluded and reveals that the recovery that began in November 2001, when measured against other post-WWII recoveries on nine key economic indicators, is one of the worst on record.
Investing in U.S. Infrastructure
EPI's April 29 Agenda for Shared Prosperity event marked the release of two new briefing papers. The first report, Good Buildings, Better Schools, makes the case that the various benefits to both educational outcomes and a slumping economy argue for a one-time federal investment infusion to address the nation's crumbling, long-neglected education infrastructure. The second paper, Investing in U.S. Infrastructure, offers an overview of the myriad areas in which federal investment could provide short-term stimulus while strengthening the economy's foundation for long-term growth. Audio and video from this event are now available. (A full written transcript will be available soon.)
Health insecurity now a broadly shared American experience
Holding on to health care is getting much harder, even if you have a good job, and a good education, and especially if you are a full-time worker of prime working age. In an new Briefing Paper, A Decade of Decline: The Erosion of Employer-Provided Health Care in the United States and California, 1995-2006, EPI economists Jared Bernstein and Heidi Shierholz demonstrate that the dramatic drop in employer-provided coverage has occurred across the entire age, education, occupation, industry, race, and ethnicity spectrum. Moreover, the decline in employer-provided coverage is caused by employers cutting coverage within existing jobs, rather than the shifting of jobs from high-coverage industries like manufacturing to lower-coverage industries. This Economic Snapshot illustrates how coverage has declined for workers across the education spectrum.
Surging inequality and the rise in predatory lending
A new Briefing Paper published by EPI as part of its Agenda for Shared Prosperity contends that increasing economic inequality and diminishing access to conventional financial services have become inextricably linked. Read Do Subprime Loans Create Subprime Cities? for a full analysis.(News release [PDF]) (Listen to an interview with the author)
Health Care for America
A health care plan that combines the best elements of the current employer-based system and the Medicare model would create big savings, offer more choices, and guarantee affordable coverage to all U.S. residents, according to a new cost and coverage analysis of EPI's plan[PDF] by the Lewin Group, a nationally respected nonpartisan consulting firm. Health Care for America, developed for EPI by Yale political scientist Jacob S. Hacker, would achieve these goals and maximize consumers' health care choices without unraveling existing health security, forcing individual to obtain coverage on their own, pressuring patients into health savings accounts, or using inadequate vouchers. (News release [PDF]) (Video news release)
Remaking Manufacturing
EPI's latest Agenda for Shared Prosperity event, with a keynote address from Senator Sherrod Brown, saw the release of three new reports on manufacturing in America. The new reports include: Sue Helper (Case Western Reserve, NBER, and MIT) on Renewing U.S. Manufacturing: Promoting a High-Road Strategy; George Sterzinger (Renewable Energy Policy Project) on the need for a strong domestic manufacturing sector in promoting renewable energy and reducing greenhouse gas emissions; and EPI economist Robert Scott provided background data on the continued importance of manufacturing to the U.S. economy. Video, audio, and a written transcript from the event will be available in the near future. (News release [PDF])
Strategy for an economic rebound
Because the United States is either already in a recession or is headed for one, policy makers need to act now to craft an effective economic stimulus package to spur growth and job creation. Without a stimulus of sufficient magnitude, the U.S. economy is likely to see a decline in growth or even a formal recession, leading to higher unemployment, declining or stagnant wages, and a host of other economic problems. A package that provides $140 billion of stimulus—1% of GDP—would begin to reverse our economic course by creating an additional 1.4 to 1.7 million jobs. EPI unveils a broad-based, three-part prescription for stimulating the economy in its new Briefing Paper, Strategy for Economic Rebound—Smart Stimulus to Counter the Economic Slowdown. (News release [PDF])
Why SCHIP matters
Despite passing the Senate with substantial bipartisan support, President Bush has promised to veto the SCHIP expansion on "philosophical" grounds. For a clear understanding as to why this is wrongheaded, read EPI's latest Policy Memo, Why SCHIP Matters.
Tax breaks for billionaires
EPI's policy memo, Tax Breaks for Billionaires, explains how hedge fund managers end up with privileged tax breaks that results in over $6 billion in forgone tax revenue. This amount alone could fund the proposed expansion of the public health insurance program for low-income children.
A Fish is not a Fowl: Tax Credits and the Minimum Wage
Critics of the minimum wage sometimes suggest tax credits as an alternative means to increase the income of low-wage earners. Tax credits, such as the earned income tax credit, are worthwhile in their own right, but they are not plausible substitutes for an increase in the minimum wage. A new Briefing Paper, A Fish is not a Fowl, discusses the problems of substituting a tax credit for a minimum wage increase.
Bush outlined misguided health care proposal in State of the Union address
President Bush set out in the State of the Union address a new health proposal that once again uses tax policy to encourage movement from employer-based health insurance system to one in which individuals buy health insurance on their own. Yet, the administration’s plan does little to insure the uninsured, help the low income, or aid the less healthy. This Policy Memo discusses the problems with the Bush proposal.
Tort costs and the economy: Myths, exaggerations, and propaganda
Critics of the U.S tort system claim there is a tort crisis in the United States and that the economy would benefit if the rights of tort plaintiffs were limited. Yet evidence shows otherwise. In Tort Costs and the Economy, EPI Vice President and Policy Director Ross Eisenbrey reviews the tort system's most commonly alleged economic costs and impacts and shows that most have little or no basis in reality. (News release [PDF])
GDP Picture: Weakness in housing slows the economy
For an analysis of the latest Bureau of Economic Analysis report on gross domestic product, read EPI's GDP Picture.
Health insurance eroding for working families
For the fifth year in a row, the number of Americans without health insurance grew significantly. Nearly 46.6 million Americans were uninsured in 2005—up almost 7 million since 2000. From 2000 to 2005, the uninsured share of the total population grew from 14.2% to 15.9%, while the share of those with employer-provided coverage dropped. Health Insurance Eroding for Working Families discusses the latest data and trends in health care coverage.
Retirement Security Issue Guide
Check out EPI's recently revised Issue Guide on Retirement Security, a resource that includes downloadable data, charts, fact sheets, and links to other sources of information on this issue.
Bridging the Tax Gap
The Internal Revenue Service estimates that as much as $350 billion in taxes are not paid voluntarily and on time. Much of this enormous gap can be attributed to offshore financial manipulations, abusive tax shelters, complexity of the tax code, and failure to implement basic financial reporting and withholding procedures. Compounding the compliance problem is the enforcement burden on an inadequately funded IRS. In a new book, Bridging the Tax Gap: Addressing the Crisis in Federal Tax Administration, EPI economist Max B. Sawicky brings together eminent theorists and practitioners in the field of tax enforcement. Collectively, these experts provide an accessible overview of the crisis facing federal tax administration and discuss a wide range of practical solutions. See also Sawicky's April 5th testimony before the U.S. House of Representatives, Committee on Small Business, entitled The Bulls-Eye Is On Efficient Government: The IRS, Small Business, and Tax Administration.
Wal-Mart bank application threat to economy
If Wal-Mart's application to create an industrial loan bank in Utah is approved, there will be far-reaching implications for the safety and soundness of the banking system, and grave consequences for consumers and taxpayers. Financial Policy Forum (FPF) Director Randall Dodd will address these economic risks in testimony on behalf of FPF and the Economic Policy Institute. His testimony and a new FPF report explain that allowing companies like Wal-Mart to set up banks without the protections required of traditional banks would weaken the regulatory framework for the U.S. financial system.
The Colorado revenue limit: The economic effects of TABOR
Twenty-eight states have some state spending or revenue limit in place. In November 1992, Colorado voters passed the most restrictive measure yet, the Taxpayer Bill of Rights (TABOR), the economic effects of which have been hotly debated in recent years. Those in favor of TABOR attribute much of the state' prosperity immediately following adoption of the law to the limit it imposes. In this Briefing Paper, the authors find that it did not significantly boost Colorado's economy and that TABOR-induced reductions in government spending have led to curtailed government services.
New inequality frontier: Broadband Internet access
The potential economic impact of broadband is substantial, and broadband's faster and more convenient access to the Internet creates social benefits including high-speed interactive uses in the classroom, medicine, telecommuting, and adaptive technology for individuals with disabilities. Although broadband access has now become more widespread, there are marked disparities in rural areas; other gaps in broadband access and use are clearly related to social factors (income, education, age, race/ethnicity and gender) rather than infrastructure. Learn more in the EPI Working Paper, New Inequality Frontier: Broadband Internet Access.
What's wrong with the economy?
Get an accessible answer to this question in our latest policy memo, written by EPI's President Lawrence Mishel and Vice President & Policy Director Ross Eisenbrey.
Principles for Governmental Action in a Broadband World
Principles for Governmental Action in a Broadband World, by Jonathan Sallet, argues that the next generation of communication policy should include the encouragement of investment in broadband networks that will raise productivity, provide greater opportunities for a well-educated workforce, and boost GDP. Sallet proposes four principles of government action that he hopes will "stimulate the correct first questions that should govern the age in which true broadband connectivity is busy being born."
Learning from Past Mistakes
A New Future for Telecommunications Policy: Learning from Past Mistakes, by Elliot E. Maxwell, uses the Telecommunications Act of 1996 to make the case for the urgent need to develop a new telecom policy paradigm. Maxwell suggests that broadband offers opportunities to expand services, applications, and content, but is hampered by outdated regulations. He outlines possibilities for a new model of regulations that fosters competition in all layers and encourages entry and investment, while making technology available to the underserved and in rural areas.
The boom that wasn't
Since 2001 President Bush and congressional leaders have promised that enacting each of a series of tax cuts would strengthen the economy by bringing faster growth, more jobs, and greater investment. With Congress again debating whether to extend past tax cuts and enact new ones, it's time to review how much the last four years of tax cuts have affected the U.S. economy and budget outlook. EPI's new Briefing Paper, The Boom That Wasn't—The economy has little to show for $860 billion in tax cuts, examines a broad range of measures to show how this economy's performance compares poorly to past averages.
Lower pensions, higher risk
As employers continue to lower contributions to employees' pensions and shift market risk from themselves to their employees, Congress is considering similar measures for the Social Security system. For an analysis of how the private pension wealth of typical Americans is both smaller and less secure than it was a decade or two ago, read Shifting Risk, the final in a three-part Social Security series called Who Will Pay?
Two steps back for retiring minorities
As retirement policies and programs are re-examined, it is essential to understand how race factors into the equation. President Bush's proposed changes to Social Security would make that program more like a private, defined-contribution account and less like a more-stable defined-benefit plan, hurting minorities in the process and exacerbating their vulnerability to employment cycles. For further analysis, see the EPI Issue Brief, Two Steps Back, the second in a three-part Social Security series called Who Will Pay?
Social Security's cruelest cut
President Bush's plan to change Social Security includes benefit cuts for the surviving family members of workers who die before retirement. These cuts will take place through the adoption of the Pozen index for Social Security benefits, a plan put forth by Robert Pozen of the president's Commission to Strengthen Social Security. But despite the president's claims that overhauling Social Security will help African Americans, the Pozen plan actually slashes benefits to families of black workers who die before retirement age. For further analysis, see this EPI Issue Brief, the first in a three-part series on Social Security called Who Will Pay?
Retirement Income and Social Security
Retirement Income, EPI's major follow-up study to its 2002 report Retirement Insecurity, argues that a truly accurate assessment of Americans' retirement adequacy must consider all forms of wealth, including private pensions, housing, and financial assets in addition to Social Security, and how they have changed over time for different groups. This latest study finds that Social Security is more necessary than ever—not only is the program nearly universal, but its value has risen faster than other forms of retirement savings for households that need additional retirement benefits the most.
The frivolous case for tort law reform
Tort litigation has been blamed for a host of ills: driving liability insurance premiums to excessive levels, reducing real wages and overall employment, undermining corporate profits, dampening productivity growth, and discouraging research and development. But macroeconomic trends since the early 1990s are especially inconsistent with the argument that supposedly high and rapidly rising tort costs have inflicted serious harm on the economy. Yet the legal system's critics continue to argue that there is a tort liability "crisis" that warrants changing the system. To get a clear understanding of why changing the tort system will have little effect on the economy and might even hurt job creation rather than help it, read EPI's Briefing Paper, The Frivolous Case for Tort Law Reform. (Note: This Briefing Paper resulted in a short rebuttal from Tillinghast-Towers Perrin, a consultant to much of the insurance industry, to which EPI has published its own memo in response.)
The trouble with telecommunications policy
While cell phones, high-speed Internet access, interactive cable, and satellite TV services have become commonplace features of the new century, telecommunications policy remains an antiquated remnant of the old one. The unintended consequence of these federal and state policies is to support the worst employers with favorable tax and regulatory treatment, while greatly disadvantaging good employers and their workers and unions. EPI's book, Racing to the Bottom, explains why the FCC and Congress need to re-examine current telecommunications policy and create a level playing field to encourage competition across the growing number of traditional and innovative access technologies that make up U.S. telecommunications.
Social Security Issue Guide
Check out EPI's online Issue Guide on Social Security, a downloadable resource with fact sheets, figures, and links to other important publications on the subject of Social Security. This Issue Guide has been newly updated to reflect information about the recent debate over Social Security privatization.
Productivity growth and Social Security's future
In the White House's rush to dismantle and privatize Social Security, one important factor frequently gets overlooked in discussions regarding the program's future feasibility: the effect of future productivity growth. For a clear-headed analysis, read the Issue Brief, Productivity Growth and Social Security's Future.
Shortfall in Social Security funds not inevitable
Changing economic trends have been responsible for the bulk of the financing shortfall of Social Security; the shortfall can be remedied by policy adjustments rather than a drastic overhaul of the system. Find out how in this EPI Issue Brief from economist L. Josh Bivens.
The tax gap crisis
According to the latest estimates, as much as $353 billion in taxes—16% of the total owed—went unpaid in 2001. Recovery of unpaid taxes would eliminate the bulk of projected federal budget deficits over the next 10 years. EPI's Briefing Paper, Do-It-Yourself Tax Cuts, provides an overview of what a former IRS commissioner calls "the crisis in tax administration" and discusses some remedies to address this problem.
Social Security and the income of the elderly
The current Social Security program ensures workers and their families a basic quality of life in retirement or in the event of disability or death. Social Security is of particular importance to Americans age 65 and older, 15 million of whom rely on these benefits for over half their income. An EPI Issue Brief explains how the elderly can ill-afford to risk their Social Security income by depending on privatization plans, including a breakdown of Social Security reliance in each state.
Bush Administration budget policy threatens Social Security & Medicare
President Bush's proposed budget for 2006 includes policies that significantly undermine future funding for programs such as Medicare and Social Security. Far from guaranteeing benefits to current retirees and workers over the age of 55, as the president has promised, the administration's budget policies threaten to underfund these crucial programs. EPI's Briefing Paper Collision Course: The Bush Budget and Social Security explains how the president's proposed budget puts Social Security and Medicare at risk.
The budget arithmetic test
A truly effective budget policy will require difficult political compromises and coordinated fiscal choices. Issues such as health care entitlements and the retirement of the baby boom generation will soon begin to put a squeeze on the U.S. budget, and ill-conceived cuts in domestic spending and unnecessary obstacles to public investment will only exacerbate budget problems. EPI's Briefing Paper, The Budget Arithmetic Test: Repairing Federal Fiscal Policy, provides a critical analysis of recent budget decisions and offers recommendations for more sensible budget policy.
Investing in children yields exceptional returns
The problems for children and society that result from childhood poverty cry out for effective policy solutions. There is a strong consensus among the experts who have studied high-quality early childhood development (ECD) programs that these programs have significant payoffs. EPI's latest study—Exceptional Returns: Economic, Fiscal, and Social Benefits of Investment in Early Childhood Development, by EPI research associate Robert G. Lynch—demonstrates, for the first time, that providing all 20% of the nations three- and four-year-old children who live in poverty with a high-quality ECD program would have a substantial payoff for governments and taxpayers in the future.
Changes to federal contracting regulations won't bring budget savings
The Bush Administration is preparing to change the A-76 rules that regulate federal contracting. However, there is little evidence to support the administration's claims that proposed changes to the federal contracting rules will result in budget savings. Show Me the Money, a Briefing Paper by EPI economist Max Sawicky, examines the flaws in the administration's argument that expanded federal outsourcing will save money.
Retirement Security Issue Guide
Check out EPI's Issue Guide on Retirement Security, a downloadable online resource that includes data,charts, fact sheets, and links to other sources of information on the topic.
EPI conference on public-sector efficiency
Leading researchers in education, labor, trade, budget, and contracting regulations met to discuss efficiency in public-sector practices. Led by EPI economist Max Sawicky, the presentations centered around how to achieve efficiency gains in public programs and government-sponsored services, including the advantages and disadvantages of privatization. Conference papers are available here.
Comparing Daschle's and Bush's stimulus plans
A January 28, 2003 EPI Policy Memo compares Bush's and Daschle's proposed stimulus packages using the criteria set forth in EPI President Larry Mishel's recent Briefing Paper, Generating jobs and growth: An economic stimulus plan for 2003. Also available for download is a slide-show presentation, The job crisis and stimulus policy (MS PowerPoint format), or click here to see all of EPI's recent work on stimulus issues.
EPI on the economy
Check out the Institute's latest research on the economy and the need for a fiscal stimulus.
Recession takes toll on living standards
For an analysis of the income data from the Bureau of the Census, read EPI's Income Picture.
Proposed AT&T-Comcast merger anti-competitive
Allowing AT&T to merge in this time of profound change for the telecommunications and cable TV industries would substantially reduce competition in both markets. The newfound market dominance that would result would likely lead to higher prices, reduced incentives for innovation, and a narrower range of consumer choices. For a full analysis, read the EPI study, Narrowing the Broadband.
Putting broadband on high speed
Most industry experts agree that investments in high-speed Internet services aren't taking place as fast as they should, costing the economy an estimated 1.2 million high-paying jobs. The problem lies mainly with lopsided regulations that haven't kept pace with developments in the information sector. EPI's study, Putting Broadband on High Speed, explains how public policy can be reshaped to facilitate faster deployment of high-speed Internet services, generating jobs for the economy and benefits for consumers.
A political history of the American rich
Hear an audio transcript of Kevin Phillips discussing his new book, Wealth and Democracy: A Political History of the American Rich.
Cities face fiscal crunch
Last year's economic slump and the aftermath of the September 11 terrorist attacks have left local governments with significant budget gaps. These current and projected shortfalls are only exacerbated by policies at the federal and state level. The EPI Issue Brief U.S. Cities Face Fiscal Crunch explains how policy makers can help local governments avoid needless disruptions in public services and capital expenditures. A press release is also available.
U.S. must stabilize, expand aerospace sector
Read EPI President Jeff Faux's testimony on protecting the U.S. aerospace industry in Viewpoints.
The high road to low unemployment
Neither the budget proposed by President Bush nor the one put forward by his Democratic opposition will return the U.S. labor market to the sustainable level of unemployment of the late 1990s. Running short-term deficits over the next couple of years, however, can help to stimulate the economy and create more jobs. For details on how fiscal policy can be used to help lower unemployment, read the Issue Brief, The High Road to Low Unemployment.
Social Security shortfall long way off
The Social Security trustees' latest report shows-once again-that the program is safe for at least another generation, and that, despite the current recession, its future outlook is steadily improving. This improvement in Social Security's long-term outlook makes the privatization proposals from the President's commission seem less relevant now than ever. For a full analysis, read the EPI Issue Brief, Social Security Shortfall Long Way Off.
Newspaper-broadcast cross-ownership rule
In 1975, the Federal Communications Commission initiated the newspaper-broadcast cross-ownership rule, which barred a single company from owning a newspaper and a broadcast station in the same market. With intense pressure from media conglomerates, the FCC is now considering a revision or elimination of the cross-ownership ban. EPI's study, The FCC's Newspaper-Broadcast Cross-Ownership Rule, explains how the telecommunications marketplace has become even more concentrated in the last 25 years, making the FCC rule more important than ever for encouraging a diversity of voices and hence a more vibrant democracy.
Former welfare families need more help
When President Clinton signed welfare reform legislation in 1996, he promised "to make work pay." Several years later, families that left the welfare rolls for the payrolls often find themselves experiencing more hardships, such as going without food, medical care, or housing, than before. EPI's latest Briefing Paper, Former Welfare Families Need More Help, updates the analysis from last year's book, Hardships in America,
and charts the privations endured by families that left the welfare rolls in recent years.
Budgeting beyond the Beltway
If current trends continue, state and local governments will be forced by law to close an aggregate budget gap of nearly $100 billion by July 2003. Between last year's tax cuts and the proposed Bush budget, states will have to raise taxes, cut basic services, or both. Read the press release or the full-text of EPI's Issue Brief, Budgeting Beyond the Beltway, for an explanation of what the federal government can do to help the states. Want to know what programs in your state get hit the hardest? Find the answers by downloading this special supplement. 
No more Enrons
The collapse of many Enron workers' retirement savings demonstrates just how risky 401(k) plans can be. Federal policy governing these plans needs to be changed to promote diversification of plan assets. For a full analysis, read EPI's Issue Brief, No More Enrons - Protecting 401(k) plans for a safe retirement.
A comprehensive option for energy policy
Clean Energy and Jobs , a report prepared jointly by EPI and the Center for a Sustainable Economy, assesses the impact of a climate and energy policy that would provide moderate but steady increases in energy efficiency and reductions in carbon emissions, while improving overall economic efficiency.
Congressional testimony on working poor
Read EPI economist Heather Boushey's February 14 testimony before the U.S. Senate on the needs of the working poor, or check out the press release online.
Slow growth won't stop rising unemployment
Economic forecasts predict that the economy will start growing, albeit slowly, in the spring of this year. But will a return to positive GDP growth herald the end of unemployment or the reversal of wage erosion for working families? Unfortunately not. In fact, without the proper stimulus package, unemployment will continue its climb throughout 2002 and remain high through 2003 as well. For a detailed analysis, read EPI's Briefing Paper, It Ain't Over Till It's Really Over.
Take back the tax cut
For an explanation why repealing President Bush's tax cut should be the top priority of progressives, read the cover story to the Winter 2002 EPI Journal, Take Back the Tax Cut, by EPI President Jeff Faux.
Undermining Social Security
The presidential commission charged with offering options to privatize Social Security has completed its work. The proposals outlined reveal that privatizing Social Security would require large benefit cuts that are not offset by higher returns from individual accounts. All workers would see declining standards of living, and younger workers, African Americans, women, and lower-wage workers would see disproportionate benefit cuts. In addition, the three proposals would require potentially massive infusions of tax dollars to implement. A full analysis of the commission's proposals can be found in the EPI Issue Brief, Undermining Social Security With Private Accounts.
An idea whose time has returned
With unemployment growing, consumer confidence and GDP ebbing, and no end in sight for the current recession, policy makers should revive an old idea: anti-recession federal assistance to the states. Such assistance would help counter the effects of a downturn that is already forcing many states to cut services and jobs, which ultimately exacerbates the economy's recessionary trends. EPI's Briefing Paper, An Idea Whose Time Has Returned, explains a variety of options for stimulating state and local economies with federal fiscal assistance.
Tax breaks unlikely to stimulate economy
Of the many proposals for an effective stimulus package, two that are unlikely to accomplish much in terms of economic growth are lower corporate tax rates and cuts in capital gains taxes. For a brief analysis, read a policy memo by EPI economist Christian Weller.
Prosperity wasn't just around the corner
Some observers of the economy have argued recently that the terrorist attacks interrupted an economic recovery that was already underway. But the data on consumer spending, investment outlays, trade, and overall economic activity for July and August show just the opposite to be true. In fact, most indicators show the economy was going from bad to worse-and was most likely in recession-before the Sept. 11 attacks even took place. Read EPI's Issue Brief, Prosperity Wasn't Just Around the Corner or the press release on EPI's stimulus-related work.
Unemployment insurance benefits calculator
Not only do unemployment insurance (UI) benefits vary widely depending on a worker's wage level and number of dependents, but every state is also allowed to set its own benefit levels, resulting in great disparities in generosity between states. EPI's UI Calculator estimates the weekly benefit allowance an unemployed worker receives in every state, provides the state's overall national rank, and compares it to the most and least generous states.
EPI stimulus plan for U.S. economy
With layoffs abounding and expectations rising that the U.S. Economy has slipped into recession, an economic stimulus is needed now to deal with the aftermath of the terrorist attacks of Sept. 11. Read the details of EPI's $137.8 billion proposal in Addressing the Nation's Needs.
Patching up unemployment insurance
Since 1935, unemployment insurance (UI) has operated as the primary safety net for workers who lose their jobs. But changes in work organization, increases in the number of women in the workplace, and growing concern for work/family balance have not been matched by changes in the way workers qualify for UI benefits. Over time the system has become less effective, with fewer than half of the nation's unemployed even applying for benefits. Part of the problem stems from the fact that each state establishes its own rules governing UI policy, generosity, eligibility, and revenue. For a detailed analysis, read EPI's latest Briefing Paper, Divided We Fall -- Deserving workers slip through America's patchwork unemployment insurance system.
Bush commission's Social Security straw man
President Bush's Commission to Strengthen Social Security, which recently released its interim report, is intentionally attempting to create a false sense of urgency around the program's well-being. Until now, the debate over Social Security has almost always focused on the year in which the accumulated trust fund would be depleted, currently projected as 2038. But the Bush commission's report attempts to focus shortfall fears on 2016, the first year in which payroll tax revenues are expected to fail to fully cover all benefits. This situation might be truly worrisome if there hadn't been a Social Security trust fund established 20 years ago to deal with this very issue. Read more about the interim report and the myths it attempts to perpetuate in the Issue Brief, The Commission's Straw Man.
Competing spending priorities
If the President's $1.6 trillion tax cut is passed in Congress, many important federal programs would face major budget shortfalls by 2011, the year the tax cut would be fully phased in, relative to the Democratic budget alternative. For a comparison of the Democratic and Republican budget proposals, read the Briefing Paper Competing Spending Priorities, which details the consequences for various programs.
Bush's fuzzy surpluses
Relying on a Congressional Budget Office projection of a $5.6 trillion budget surplus, President Bush has proposed an aggressive $1.6 trillion tax cut as if the surplus had already filled the treasury's coffers. The CBO projections, though, are problematic because they are just that - rough guesses of what will happen in a hard-to-know future. The consequences of the tax cuts, on the other hand, are not at all uncertain. Such cuts are permanent changes in the tax code and mean permanent reductions in government revenue. For a better idea why it's too risky to base tax cuts on CBO's 10-year projections, read Bush's Fuzzy Surpluses online.
Trust funds' rainy day postponed, again
The annual reports of the trustees of Social Security and Medicare continue to show improvements in the 75-year outlook for both programs. Social Security is projected to pay full benefits until 2038, and Medicare is expected to pay all costs through 2028. However, the future would look even brighter if the trustees would abandon their unrealistic, overly pessimistic economic assumptions. For a full analysis of the trustees' reports, check out EPI's Issue Brief, Trust Funds' Rainy Day Postponed, Again.
Federal Reserve must lower interest rates now
Despite its recent half-percentage-point interest rate cut, the Federal Reserve must quickly make even deeper cuts to lessen the damage it has done to the economy. Without swift action by the Fed, unemployment is likely to rise by at least a point or two if the economy follows the pattern of previous recessions. For an analysis of the past two recessions and what the Fed can do to avoid pushing the current economy into another one, read the EPI Issue Brief Fed Up.
EPI privatization conference
Visit the Audio Archive to listen to recordings of various sessions from EPI's January 11 conference, Privatization: Trends, evidence, and alternatives. Also available is a copy of the conference's agenda, short biographies of the presenters and panelists, and a collection of relevant research papers for easy downloading.
Crime shouldn't pay 
As the nation continues to "get tough" on crime by mandating longer incarcerations and building more prisons, the clear link between crime and labor market opportunity is often ignored in policy debates. Adopting certain market policies would not only lift the economic prospects of many low-wage workers, but also pay off in the long run by offering potential criminals a legitimate alternative to crime. To find out more, read EPI's study, Crime and Work: What We Can Learn From the Low-Wage Labor Market, by Jared Bernstein and Ellen Houston. To listen to a Real Audio transcript of the July 18 press conference marking this study's release, click here.
How Much Is Enough?
EPI's latest book, How Much Is Enough -- Basic Family Budgets for Working Families, provides a detailed analysis of the food, housing, health care, clothing, child care, and transportation cost estimates used in determining a "basic family budget" necessary for a modest standard of living. The book also identifies the best practices from the existing literature in deriving these costs and scrutinizes the strengths and weaknesses of the various approaches and data sources used to determine these budgets. For a general overview, take a look at the table of contents, Executive Summary, or introduction online.
The Perils of Privatization
In his proposal for Social Security, presidential candidate George Bush would allow a portion of each worker's payroll taxes to be placed in a personal account and invested in stocks and bonds. Social Security would no longer be a social insurance program providing a guarantee of inflation-proof, lifelong retirement income. Instead, workers' core retirement income would be put at risk in an investment program where benefits are determined by the luck and wisdom of their investment choices and the ups and downs of financial markets. For a full analysis, read EPI's Issue Brief, The Perils of Privatization.
The End of Welfare?
The ongoing devolution to the states of responsibilities previously assumed by the federal government has far-reaching implications for state budgets. The End of Welfare? Consequences of Federal Devolution for the Nation, a collection of essays by some of America's leading economists on state fiscal issues, examines the ability of state economies to accommodate these challenges. The introductory essay by EPI economist Max Sawicky and the table of contents can be read online.
Monopolizing the telecommunications industry
The proposed merger of MCI WorldCom and Sprint would not only violate U.S. antitrust laws but also deepen both companies' control over the Internet backbone market, thereby undermining further progress in that leading technology. The merger would intensify market power, raise prices, reduce innovation, and narrow consumers' choices. For a full analysis and a set of policy prescriptions, read EPI's Briefing Paper, Wrong Numbers -- MCI WorldCom, Sprint, and monopoly power in the long-distance market.
MCI WorldCom's Sprint Toward Monopoly
Mergers in the information transport sector have become almost commonplace as new rivals position themselves against incumbent long-distance and local phone companies. Although many such mergers can be beneficial, they can also be detrimental to consumers. The proposed merger of MCI WorldCom and Sprint is a case in point. MCI WorldCom's Sprint Toward Monopoly shows that the merger will intensify market share concentration to an unacceptable level, posing risks to consumers that the market will be unable to mitigate.
Expanding and simplifying tax credit for working families
Despite a record-length recovery, almost 10 million children lack health insurance coverage and Medicaid benefits. An effective means of helping these children would be a major expansion of the Earned Income Tax Credit (EITC) that restructures and combines some of the other tax benefits available to families with children. A proposal for such an expansion can be found in the latest EPI Briefing Paper, Giving Tax Credit Where Credit Is Due -- A 'Universal Unified Child Credit' that expands the EITC and cuts taxes for working families, by Robert Cherry and Max Sawicky.
Can public schools learn from private schools?
EPI's latest book, Can Public Schools Learn From Private Schools? (co-published with The Aspen Institute's Nonprofit Sector Research Fund), reports on case studies of eight public and eight private schools, conducted to determine whether there are any identifiable and transferable private school practices that public schools can adopt in order to improve student outcomes. The evidence from interviews with teachers, administrators, and parents yields a surprising answer, one that should inform our policy debates about school choice, vouchers, public school funding, and other education issues. Check out the press release, table of contents, executive summary, and introduction online.
Social Security trustees bump back date again
The Social Security trustees' latest annual report shows much-improved projections for Social Security's future. In fact, the improvements to Social Security's projected finances are the largest in years, with the eriod over which the trust fund will be able to pay full benefits extended by another three years to 2037. While this is certainly good news, the trustees' report is still based on certain pessimistic assumptions about the future economy. Check out EPI's Issue Brief, Getting Better All the Time, for a comparison of this report's projections to those of years past and for an explanation as to why Social Security is more secure than some predict.
Is the stock market boom a bust for workers?
This issue of EPI's Paycheck Economics focuses on the winners and losers of the rising stock market. Many assume that a booming stock market means good economic times for everyone, but some important facts have been lost in the hoopla. Read the Executive Summary for the current issue online.
Viewpoints on government and the economy
Read opinion pieces written by EPI staff and associates dealing with government and the economy in Viewpoints.
