Business & Economy
In Iowa’s Interest: New White House Rural Council Means Stronger Focus on Initiatives for Rural Iowa PDF Print E-mail
News Releases - Business & Economy
Written by Harkin Press Office   
Thursday, 16 June 2011 13:12

Building a brighter future for our country starts here, at home, in the small and rural communities that are the foundation of America.  Without them, we would not be the great nation we are today.

Having grown up in Cumming, Iowa, which is still my home, I know firsthand the significant challenges facing rural communities.  But I also deeply appreciate their strengths and contributions – very notably in agriculture -- and their tremendous potential and promise.

That is why I am very pleased and encouraged by the executive order President Obama issued earlier this month to create a White House Rural Council.  This council will draw together departments, agencies and offices across the federal government to concentrate their focus on growing the economy, creating jobs and enhancing the quality of life in rural communities.

It is especially encouraging that President Obama has named to chair the White House Rural Council someone who knows what it means to be from a small town and who is closely attuned to the challenges and aspirations of the families, farms, and businesses that make up rural America.  That, of course, is my long-time friend and colleague, Secretary of Agriculture Tom Vilsack.

To achieve these goals of economic growth, more jobs and a better quality of life in rural communities, the White House Rural Council will help rural Americans obtain better job training and education.  It will help expand markets for agricultural products in local, domestic and international markets.  The council will push to increase biofuels production and rural renewable energy projects and investments.  And to enhance health and the quality of life in rural areas, the council will help improve access to quality health care and support initiatives and opportunities in outdoor recreation and conservation of soil, water and wildlife.

The White House Rural Council holds significant promise for increasing opportunities in states like Iowa.  It has strong potential for reinvigorating these rural communities and their economies and, in turn, revitalizing our nation.  As a senior member and former Chairman of the United States Senate Agriculture, Nutrition and Forestry Committee, I applaud this new White House initiative and I look forward to the ideas it generates, the action it spurs and the opportunities it engenders.

For more information, please feel free to contact any of my offices or visit my website at http://harkin.senate.gov.

 
Ten Years of Bush-Era Tax Cuts – A Legacy of Deficits PDF Print E-mail
News Releases - Business & Economy
Written by Harkin Press Office   
Thursday, 16 June 2011 13:05

In considering stories or editorials about the federal deficit or current deficit reduction negotiations, I hope you find the following information on the tenth anniversary of the Bush tax cuts helpful.  Should you need any further information, do not hesitate to contact me at (202) 224-3254.

“The most recent projections from the Office of Management and Budget indicate that, if current policies remain in place, the total unified surplus will reach $800 billion in fiscal year 2011. . . . [We can expect surpluses] “well past 2030 despite budgetary pressures from the aging baby boom generation, especially in major health programs. . . . The most recent projections make clear that the highly desirable goal of paying off the federal debt is in reach before the end of the decade.” – Federal Reserve Board, Alan Greenspan, in testimony to Congress five days after George W. Bush took office as President.

“Tax relief will create new jobs, tax relief will generate new wealth, and tax relief will open new opportunities,”President George Bush, April 16, 2001.

Ten years ago – on June 7, 2001 – President George Bush signed into law the first in a series of tax cuts that disproportionately benefited the highest earners, with claims the tax cuts would stimulate the economy and that the government would still be expected to completely play off the national debt.

The opposite occurred.  In the years following passage of these tax breaks, the rhetoric of economic growth did not match the reality, and the fundamental legacy of the Bush tax cuts is debt.  In fact, during the decade after the Bush tax cuts were passed, “growth in investment, GDP, and employment all posted their worst performance of any post-war expansion.”[1]

By contrast, the legacy of the Bush tax cuts is very different from the decade prior to Bush taking office, which resulted in large surpluses.  With the passage of the 1993 reconciliation bill through 2000, the size of deficits steadily declined, turning into growing surpluses in 1998 that steadily grew to a peak in 2000.

Similarly, compared to the economy under Clinton, the Bush tax cuts of 2001 did not result in employment growth.  In the three years after the passage of the 2001 measure, the U.S. actually averaged a 17,000 per month job loss.  In contrast, in the three years following passage of the 1993 Reconciliation Act, the U.S. gained 327,000 jobs per month.

The following charts illustrate how the Bush tax cuts have affected the deficit, the economy, and people’s incomes.

During a 2001 address to Congress, Bush said, “At the end of those 10 years [in the 2001 budget], we will have paid down all the debt that is available to retire. That is more debt repaid more quickly than has ever been repaid by any nation at any time in history.”[2] However, thanks in large part to the Bush tax cuts, the debt ballooned under Bush, with debt held by the public increasing from $3.5 trillion to nearly $6 trillion and gross federal debt going from $5.6 trillion to nearly $10 trillion.[3] As the Center on Budget and Policy Priorities found, “the tax cuts account for $1.7 trillion in extra deficits in 2001 through 2008, and is estimated to cost $3.7 trillion over the 2009-2019 period.”[4] In addition, the extra debt-service costs caused by the Bush-era tax cuts, amounts “to more than $200 billion through 2008 and another $1.7 trillion over the 2009-2019 period — nearly $330 billion in 2019 alone.”[5]

Very simply, during the Bush years, spending rose as revenues dropped precipitously.  Over the last decade, government revenues fell from 20.6% of GDP in 2000 to 19.5% in the year of the 2001 tax cuts, and as the tax cuts phased in, continuing to fall in to 17.5% in 2008 before crashing, as a result of the recession, to 14.9% in 2009 and 2010.  Concurrently, spending rose from 18.2% of GDP in 2000 to 20.7% in 2008, and then, with the costs of the recession, escalating sharply to 23.8% in 2010, much of this increase due to the higher costs of existing programs and lower tax receipts.

Having already burdened the American taxpayer with this legacy of debt over the past 10 years, now both the House Republican budget and the House Republican “jobs plan” released in May include further reductions in the top tax rate from 35 percent to 25 percent. This plan ignores the facts of the past 10 years and asks middle class Americans to sacrifice so that the wealthy can benefit further.   As the Washington Post’s Ezra Klein noted, “You could read [the GOP jobs plan] without knowing the past decade ever happened.”[6]

Despite the performance of the economy in the 1990s, in the last 10 year, most Congressional Republicans have clung to an increasingly rigid ideology that any tax increase is bad and that sharp reductions in spending reductions do not cause economic harm.  This stance is in sharp contrast to that of Republicans of the past, who recognized that balancing the budget required a combination of spending reductions and revenue increases.   For example, after the 1981 tax cut, Reagan and many Congressional Republicans agreed to tax increases in both 1982 and 1984 because of deficit concerns.

Senator Harkin believes that Alan Greenspan’s testimony over ten years ago reminds us that very good things can happen when our national leaders make tough fact-based decisions to both cut spending and raise revenue.  He believes there is no question that the time has come for tough budget decisions, but the smart way to bring down the deficit is for Congress to pursue a balanced approach of major spending cuts and necessary revenue increases, while continuing to make investmentsin areas that are important for maximizing job growth over the long term.  These include education, infrastructure and research for innovation, so crucial in our competitive world economy.

For more information, please visit http://harkin.senate.gov/.

 
Teens and Employment PDF Print E-mail
News Releases - Business & Economy
Written by Joy Venhorst   
Thursday, 16 June 2011 12:56

Encouraging teenage family members to find jobs is one way a family can increase its income during tough times. Many part-time jobs are available that fit into student schedules.

 Evaluating Employment Options
Researchers have studied individuals who grew up during the Depression and worked to help their families. They found work had a positive effect. As adults they were healthier psychologically and were better off for the work experience.

Teens who have goals for the use of their earned income do better, according to recent studies.

Youth who have no clear goals for the use of their earnings spend more on luxuries and develop extravagant spending habits that lead to financial problems in adulthood. Also, these young people are more likely to spend earnings on alcohol and drugs, according to the studies.

Here's a list of ways a teen's income can be managed. Use it to guide a discussion with your teen on how his/her paycheck will be spent:
§ Use a portion for routine expenses incurred by the teen such as school lunches, clothes, gifts, dues and recreation. Save the remainder as an education fund.
§ Contribute a portion to the family household budget and keep a portion for the teenager's personal expenses.
§ Contribute the entire wages to the family budget and give the teen an allowance.

Teen Contributions to Family Budget
An ideal way for the teen to become familiar with the expenses of the whole family is to assist with developing the family budget. Have your teen figure the family budget without any of his/her earnings included. Then, add in a portion of the additional earnings under income and adjust selected expense categories, particularly in areas where the teen normally has expenses. You could also have your teen figure the budget including his/her total earnings.

Contact:
Sharon M. Danes, Family Resource Management Specialist, University of Minnesota
phone: 612-625-9273

 
Grassley amendment would safeguard tax dollars awarded as federal grants, ban federal grant awards to tax delinquents PDF Print E-mail
News Releases - Business & Economy
Written by Grassley Press   
Wednesday, 15 June 2011 14:07

WASHINGTON – Senator Chuck Grassley has offered an amendment designed to prevent fraud, waste and abuse of federal grant programs.  His proposal would amend a bill pending in the Senate which would increase the number of federal grants available for government infrastructure projects administered by state and local governments.

“Federal officials need to make certain due diligence is done on the front end to safeguard tax dollars from grant recipients who are delinquent in paying their taxes.  It’s wrong that someone with big unpaid tax bills would be given a federal grant,” Grassley said.  “After grants are awarded, federal agencies also need to follow up and make sure recipients of taxpayer dollars meet reporting requirements for how the money is spent.”

Grassley was one of four senators who requested a government report that was released in May.  It found that 3,700 contractors and grantees owed $757 million in back taxes, but also received $24 billion in stimulus awards.  The study identified 15 cases of individual contractors or grantees involving “abusive or potentially criminal activity.”  One construction firm owed nearly $400,000 in back taxes but received a contract worth more than $1 million.  One non-profit organization owed more than $2 million from years of unpaid payroll taxes, but received more than $1 million in stimulus funds.

Separately, since last fall, Grassley has worked to get the U.S. Department of Housing and Urban Development (HUD) to pay attention to the waste and abuse of tens of millions of tax dollars by the Philadelphia Housing Authority.  The Philadelphia Housing Authority received nearly $370 million in HUD money this year plus an additional $127 million in stimulus funds.  “The mess in Philadelphia shows the worst that can happen when the federal government doles out money, but then doesn’t check to make sure that money is used for its intended purpose,” Grassley said.

The amendment that Grassley filed to the Public Works and Economic Development Reauthorization bill this week would apply to federal grant programs authorized by the Public Works and Economic Development Act of 1965.

Grassley’s amendment would:

1)      Ban government agencies from providing grants to any person or entity that is seriously delinquent with tax debt, including anyone with a lien from the federal government.
2)      Require that at least 10 percent of federal grants be audited annually for compliance with program requirements.
3)      Ban for two years any grantee with an unresolved problem based on an audit.

“This amendment is a common-sense accountability measure that should be adopted,” Grassley said.

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Harkin Aides Launch Summer Listening Tour to Collect Ideas on How to Rebuild the Middle Class in America PDF Print E-mail
News Releases - Business & Economy
Written by Harkin Press Office   
Tuesday, 14 June 2011 12:45

DES MOINES – Senator Tom Harkin (D-IA) announced today that his staff will visit all 99 counties this summer to hear directly from Iowans on how the economy is impacting families across the state.  The listening tour aims to collect ideas for rebuilding the middle class in America– from recent college graduates looking for employment to working Iowans needing to secure their retirement.  The tour, “Rebuilding America’s Middle Class: Stories from Around Iowa,” will begin next week

The Iowa tour builds upon Harkin’s work in Washington, where he is examining the impact of economic policies on the middle class.  In mid-May, Senator Harkin, as Chairman of the Senate Health, Education, Labor and Pensions Committee, convened his first Committee hearing on this issue entitled, “The Endangered Middle Class: Is the American Dream Slipping Out of Reach for American Families?”  Archived video and testimony from that hearing can be found here.

“As I travel in Iowa and across the country, I hear from more and more hardworking middle class families who feel that the American Dream is slipping away,” said Harkin.  “One thing is certain:  there can be no sustainable economic recovery without the recovery of our middle class.  This listening tour will collect ideas directly from the students, workers, near retirees, and all of those impacted by this economy.”

Each summer, Senator Harkin’s staff visits each Iowa County to talk to Iowans about the issues impacting them and their families.  Staff will then post information on their visits on Senator Harkin’s web site (http://harkin.senate.gov/) Last summer’s tour focused on the positive impact the Americans with Disability Act has had on Iowans as the nation celebrated the law’s 20th anniversary.  To read staff accounts of that tour, click here.

A full list of events is still coming together, but all events will be advised to media by county.

 
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