An Open Letter to President George W. Bush, Senate Majority Leader Tom Daschle and Senate Finance Chair Max Baucus

 

November 8, 2001

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From Raul Yzaguirre, President, National Council of La Raza; Kim Gandy, President, National Organization for Women; Hugh B. Price, President, National Urban League

November 8, 2001

Gentlemen:

Last Friday the Bureau of Labor Statistics released data confirming that the slowdown in the labor market that started earlier this year has been turned into a national catastrophe by the events of September 11. By all accounts, we are now in the middle of a recession. And, just like being in the eye of the hurricane, more of the storm is about to come.

We strongly support the ongoing efforts to have the economic stimulus package include improvements to the broken unemployment insurance system, and increased funding and accessibility for Medicaid for unemployed workers, including legal immigrants.

However, while there has been much attention paid to the needs of those who have joined the ranks of the unemployed, and fixing the unemployment system so that more workers can be covered, discussions around an economic stimulus have left out too many people, namely those who depend on the economy to generate more jobs.

Each month the labor force grows, young workers enter the market, and those who are disabled, or who receive benefits from the Temporary Assistance to Needy Families program cycle off their benefits, homemakers re-enter the labor force, and the list goes on. Last month, almost one-third of the unemployed were either new job entrants or reentrants to the labor market.

From October 1996 to May 2000, the worse the economy did was to generate a net gain of 80,000 new jobs in August 1997, on average over 230,000 jobs were created each month from 1996 to 2000. In each of the last three months, the Bureau of Labor Statistics has reported job losses of 54,000, 213,000 and 415,000, and in five of the 10 months this year, the Bureau has reported job losses. The result is that the unemployment rate for women who are their family’s breadwinner stood at 6.9 percent in October, up from 5.4 percent last year. Not surprisingly, with a slower economy this year, the Department of Health and Human Services reported a jump in the first quarter of cases in the Temporary Assistance to Needy Families program.

As a matter of first principles, a stimulus package that ignores low-wage earners and the hard-to-employ who must find a job is simply not a stimulus package. These Americans are an important part of who makes up the unemployed. Some will have had too little experience to qualify for unemployment insurance, no matter how the unemployment system is fixed. These are the people who play by the rules, but must play on a field they do not set. It is up to policy makers to put in place the economic plan to create the jobs. Failing that, it is the responsibility of those who shape our economy to give honest Americans, who want to work, a solution to how to survive when jobs are disappearing.

This is a lesson the nation already learned during the Great Depression. The social safety net is compassionate. But, it is also a practical band-aid for the economy, and those of us who still have jobs. We are not solving the economic downturns of the 1980s and 1990s caused by unexpected spikes in oil and energy prices that shocked the nation’s producers and the supply side of the economic equation. We are instead confronted with the classic dilemma faced in the Great Depression of a shock to the demand side of the economic equation. In fact, the events of September 11 have been followed with falling gasoline prices, and various companies - from automobile manufacturers with their zero percent financing to airlines with their sales - have been lowering prices.

To fix the problem of an economy that is not consuming, an economic stimulus package must protect those who are about to be engulfed by the dust of the economic drought. These families will not be saved by the Federal Reserves’ attempts to lower interest rates, or by tax cuts to people with high incomes, or even unfortunately by our broken unemployment system.

Here is what we must do:

1.) Relax the time limits on receiving TANF benefits, at least during the months of an official recession. Far from lacking common sense, it is cruel to run a program that demands its recipients find a job when employers have shed almost 700,000 jobs in the last three months. This is a broad-based recession. Jobs are being lost in all sectors of the economy, from manufacturing to services. We cannot simply train workers to move them to the right sector. We must provide a real solution for families that are facing ruin.

2.) To help accomplish that, we support Senator Kerry’s efforts to extend the contingency fund now, but also to add waving charging states interest if they need to borrow to fill their contingency funds, especially in those states that are hardest hit by this economic downturn. This will avoid delays in processing new claims.

3.) During a recession we must restore full access to the safety net for legal immigrants. Drops in their demand would hurt the economy, as much as a drop in the consumption of any others.

4.) Ease access to Food Stamps. The safety net had been designed as a set of entitlements, so that when the economy slowed, benefits would flow to people with falling incomes without the delay of Congressional action. Now, we are in November, four months past what will be marked as the beginning of this recession. To make up for that, we must have a way to get help in the hands of families right away. Restrictions on receiving food stamps, like asset tests on the ownership of an automobile, will needlessly add to further delays. Action must be taken now. Senator Harkin’s efforts within the re-authorizing the Food Stamp program should be supported.

We support many of the fine things that the Senate Finance Committee is considering today. We think we must take the positive steps suggested in Senator Baucus’ bill to fix access to unemployment insurance, the increase in the match for Medicaid to help ease the fiscal crunch that states are facing, and helping - especially in this time of the bioterrorism threat we face - to help unemployed workers continue with their health insurance. But, we are counting on you gentlemen to do more. Let us use this time of national solidarity to show America that no one will be left behind, or forgotten. This is a time for shared sacrifices; it is not a time to offer up any American for sacrifice to ideology.

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