WHEREAS:
Six years of Reaganomics has damaged the power of the American economy to provide for its citizens. A high price has been paid by the people for Reagan's disastrous economic programs of:
- Excessive and unfair tax cuts for wealthy people and corporations,
- Escalating defense spending,
- Gutting of human services,
- High interest rates; and
WHEREAS:
The taxation program of the Reagan Administration is most unfair, providing vast tax breaks for corporations and wealthy citizens, while adding millions of poor people to the tax rolls. The Accelerated Cost Recovery System and other loopholes enacted in 1981 allowed many of the nation's biggest corporations to completely evade federal income taxes. While the top 10% of individual taxpayers enjoyed a 10.4% cut in their effective tax rates between 1980 and 1985, the 20% of taxpayers in the middle suffered an 11.5% increase in the share of their incomes devoted to paying federal taxes. Personal income tax cuts to upper-class households earning $80,000 or more per year averaged $9,430 in 1985, but those earning $10,000 to $20,000 only got an average of $320, an amount that has largely been offset by higher social security taxes, increased state and local taxes and user fees enacted to compensate for reduced federal funding; and
WHEREAS:
The massive tax breaks for business and the wealthy were supposed to spur booming economic growth, but the opposite occurred. Fifty of the country's wealthiest corporations paid no federal taxes at all during Reagan's first four years in office. Instead of stimulating economic performance and creating jobs, 44 of these companies cut their investment in new plants and equipment by 4%, and employment 6%. The $120 billion the Federal Treasury loses annually from business tax breaks has gone to non-productive mergers and financial speculation, instead of productive investment that creates jobs; and
WHEREAS:
During Reagan's tenure in office, military spending has more than doubled. The Administration would continue this course: the proposed "Star Wars" would become the nation's largest single defense project in history, despite pressures for budget cuts. The President has suggested a 6% increase in military expenditures to $320 billion, in Fiscal Year 1987. Sheer size of defense expenditures drains capital investment and engineering talent from non-defense industries such as auto and steel, which badly need to modernize, This only weakens the national economy, and a weak national economy undercuts national defense; and
WHEREAS:
A federal deficit in and of itself is not an economic danger. Expanded government spending is often necessary to stimulate a weak economy. But today's huge federal deficits are directly attributable to the Reagan Administration's destructive economic policies of massive defense spending and enormous tax breaks for corporations and wealthy people. Between 1982 and 1985, declines in tax revenues contributed $326 billion to the cumulative deficit, and increases in defense spending contributed an additional $77 million to the deficit; and
WHEREAS:
Using the excuse that the federal deficit is causing high interest rates and choking economic expansion, Congress passed the highly irresponsible Gramm-Rudman act to automatically cut programs they themselves no longer had the political backing to touch. Gramm-Rudman would make even deeper cuts in domestic programs, programs which have already been cut by $176 billion under Reaganomics. Further cuts endanger the economy of the nation and the health and safety of its citizens; and
WHEREAS:
The Administration is using the federal deficit as a means of further dismantling both state and local government programs. Another $16.2 billion in aid to state and local governments, which have become the major operating units of domestic programs, is scheduled for elimination in Reagan's Fiscal Year 1987 budget. This comes at a time of high structural unemployment and growing poverty rates in America, when poor and working Americans need federal programs more than ever before; and
WHEREAS:
The Reagan Administration's huge federal budget deficit has provided an excuse for the Federal Reserve to keep interest rates unnecessarily high. High interest rates squeezed small businesses and farmers and, by inflating the value of the dollar, seriously damaged the international competitiveness of American industry; and
WHEREAS:
Current federal economic policies of unfair and insufficient taxation, slashed domestic spending, and historically high interest rates have hurt the U.S. economy and American people. Unemployment has dropped below the unacceptably high rate of 7.0% for only one month out of the last 6 years. In 1984, 14.4 percent of the American people lived in poverty, the highest proportion since 1966. New economic policies are needed to reverse the trend toward poverty and joblessness that threatens millions and drains the national economy.
THEREFORE BE IT RESOLVED:
That the 27th International Convention condemn the Reagan Administration's economic policies as unfair and ineffective, and pledge to continue to fight for new economic priorities more fair to the American people; and
BE IT FURTHER RESOLVED:
That AFSCME believes that the U.S. can and must immediately start to move toward the Humphrey-Hawkins Act goals of full employment with price stability. Toward this end, we support:
- Implementation of a comprehensive overhaul of the federal tax system which closes the deficit by ensuring that corporations and wealthy individuals pay their fair share of the tax burden; which removes the millions of poor people from the tax rolls; and which eases the tax burden on the middle class.
- A reversal of the recent spending cuts, together with new funding for essential federal initiatives such as national health insurance, job-creation, and development of the nation's public infrastructure.
- Reductions in the military budget with guaranteed retraining for those workers affected by the reduction.
SUBMITTED BY:
Donald G. McKee, President
Dick Palmer, Secretary-Treasurer
Iowa Council 61
Des Moines, Iowa