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Resolutions & Amendments

26th International Convention - San Francisco, CA (1984)

Reaganomics and AFSCME's Alternatives

Resolution No. 10
26th International Convention
June 18-22, 1984
San Francisco, CA


Over the last three and one-half years the Reagan Administration has succeeded in implementing a disastrous economic program composed of:


The tax program of the Reagan Administration is highly inequitable, favoring the rich over the poor, big corporations over small business. Under President Reagan's personal income tax cut, a household earning $80,000 or over will get an average tax break of $9,430 by 1985, while those earning $10,000 to $20,000 will have gained only $320 — an amount that has largely been offset by higher Social Security taxes and increased state and local taxes and user fees that have been enacted to compensate for reduced federal funding for state and local services. The business tax cut is no better, The largest 1700 (or 0.2%) of the businesses in America are getting over 80 percent of the gains from Reagan's Accelerated Cost Recovery System (ACRS) business tax cut. ACRS has done little or nothing to boost investment, but it allowed corporations in 1983 to deduct $31 billion more from their taxes than would have been justified by the economic depreciation of assets; and


The Administration's tax program has undermined the federal revenue base, The loss of federal tax revenue from policy changes made by this Administration has risen from $40 billion in FY1982 to $111 billion in 1985 to a projected $215 billion in FY1989; and


President Reagan's Fiscal Year 1985 budget will bring military spending increases to 115 percent; he has more than doubled the defense budget since he took office. Over that period, military costs have increased 60 percent in inflation-adjusted dollars. If Reagan's policies continue, defense expenditures will increase another 25 percent in inflation-adjusted dollars between 1985 and 1989. This rapid military buildup will inevitably produce large cost overruns and unnecessarily high inflation in procurement costs. It will also drain capital investment and engineering talent from non-defense industries, such as auto and steel, which badly need to modernize. Excessive defense expenditures are self defeating; they weaken our nation's economy — the bedrock on which any effective national defense must rest; and


The massive military buildup, as well as the tax cuts, have come at the expense of critical domestic programs. Under pressure from the Administration, the Congress has cut federal spending on social programs by a cumulative $59 billion through 1984, and the Administration's FY1985 budget would bring that total to an $88 billion loss from pre-Reagan funding levels. The big funding cuts for key programs like education, CETA, AFDC, Food Stamps, Mass Transit, Medicaid, Medicare, and Social Security threaten the well-being of millions of Americans. Despite Reagan's campaign promise of equitable across-the-board cuts, the poor and the elderly are the principal victims of this attack on the network of social welfare programs that have been established over the last fifty years; and


The Administration's excessive reliance on monetary policy-restraint in the rate of growth of the money supply-as the primary tool to curb inflation, combined with unprecedented federal borrowing to finance the huge deficit engendered by the tax cut and military spending, has kept interest rates at unreasonably and unnecessarily high levels. The high interest rates:


As AFSCME predicted would happen, the Administration's misguided policies grounded the U.S. economy on the shoals of high interest rates and widespread unemployment. The recovery has been uneven, and has failed to address many basic problems caused by the recession. The continuation of the Reaganomics policies of unfair tax cuts, accelerating defense spending, huge deficits, high interest rates and inadequate social spending threatens to plunge the economy back into recession in the near future.


Reaganomics had totally ignored, and in most cases worsened, the critical structural problems of our economy. These include growing structural unemployment, in which larger and larger proportions of the population have no hope for a decent, stable job, structural industry changes, which have wiped out a large portion of mid-skill, mid-wage jobs, and structural poverty, in which growing proportions of the population are falling below the poverty level.


That AFSCME recognize and expose Reaganomics as an unfair and ineffectual way of dealing with the problems of inflation and unemployment. AFSCME will continue to fight to reverse this Administration's economic policies.


That AFSCME believes that the U.S. can and must immediately start to move towards the Humphrey-Hawkins Act goals of full-employment with price stability. Towards this end, we support:


International Executive Board

Carolyn Samson, President
Norman Snyder, Secretary
Local 707, Council 14
St. Paul, Minnesota