Ronald Reagan on Budget & Economy
President of the U.S., 1981-1989; Republican Governor (CA)
Reaganomics: generate growth by stimulating the supply side
Reagan’s first term was dominated by efforts to carry out his economic program-dubbed “Reaganomics” by
the media-which consisted in part of large budget reductions in domestic programs and substantial tax cuts for
individuals and businesses. The theory of supply-side economics-generating growth by stimulating a greater
supply of goods and services, thereby increasing jobs-was a mainstay of the Reagan approach. Central to the
administration’s efforts to combat inflation was rigorous control over government spending deficits. Early
budget cuts of $39 billion were followed by the passage of a 25% tax cut for individual taxpayers and faster
tax write-offs for business.
The economic policies had mixed results. Unemployment rose to a level of 10.6% by the end of 1982 but
declined to around 5.5% late in 1988. Inflation, which had peaked at 13.5% in the 1970s, gradually fell to
about 4%-6%. Massive federal deficits piled up, however-a reflection of tax cutting & greater defense
Source: Grolier Encyclopedia on-line, “The Presidency” Dec 25, 2000
U.S. economy does not need master planners, just freedom
Carter had run for the presidency on a platform calling for what the Democrats called “national economic
planning.” I’m sure they meant well - liberals usually do - but our economy was one of the great wonders of
the world. It didn’t need master planners. It worked because it operated on principles of freedom, millions of
free decisions how they wanted to work and live, how they wanted to spend their money, while reaping the
rewards of their individual labor.
Source: RonaldReagan.com Dec 25, 2000
Dismisses seriousness of stock market crash
The stock market crashes today, but Reagan strides in beaming like a boy. His bubbling joie de vivre affects
gloom in room. His only comment on Wall Street's nervousness, "Maybe they should change their symbol
from a bear to a chicken noodle."
Chairman of the CEA (Council of Economic Advisors) tries to make him understand the seriousness of the
situation. "Mr. President, this is not just a little wiggle in the market we can ignore. This is a very serious
condition." Reagan tries to look solemn, but this is difficult to do when one's mouth is full of jelly beans. He
takes refuge in genial reminiscence, "Didn't we do better before there was a Federal Reserve?"
Source: Dutch, by Edmund Morris, p.627-628 Oct 19, 1987
Are you better off now than you were four years ago?
Inflation elected Ronald Reagan in 1980. The hostages in Iran were a temporary distraction. In August of
1979, Reagan’s advisers opened “Policy Memo No. 1” of the campaign with these words: “By a wide margin,
the most important issues in the minds of voters today is inflation.” And by campaign’s end, the candidate
who had risen by ideology, the true believer, was asking people to vote their pocketbooks. Over and over
Reagan asked, “Are you better off now than you were four years ago?”
Source: Reagan’s America, by Garry Wills, p. 362-3 Jul 2, 1987
Laffer curve appealed to Reagan’s beliefs, not his economics
Several editorial writers at The Wall Street Journal had become enthusiasts for the ideas of Arthur Laffer. The
Laffer theorem was centuries old and beyond challenge in itself-the claim that tax revenues can be so high as
to dry up their source. [The theory was explained] by drawing an igloo shape on a napkin to explain the
trajectory of tax returns. The mystique of supply-side economics grew, built around this doodle.
Reagan himself was a cautious convert. Supply-side was inconsistent with much of what Reagan had said over
the years about economic theory; but it fit everything he believed about the American saga, about “what made
us great” before there was any government to cripple the lone pioneer on the frontier.
The monetarist and fiscal-restraint people found aspects of supply-side theory compatible, and dismissed the
rest as campaign rhetoric. The supply-side view was a “free lunch” that would restore the economy without
pain, reduce inflation without recession.
Source: Reagan’s America, by Garry Wills, p. 364-5 Jul 2, 1987
Supply-side economics gets govt out of the way of growth
Reagan himself was a cautious convert [to supply-side economics]. He had years of programmed response to
overcome-all those years of denouncing deficits, paying homage to the balanced budget, ridiculing the
Democrats’ idea that there is any such thing as a free lunch. But a free lunch [it was]: tax cuts would pay for
themselves, since taxes had reached a point where they drained the economy rather than strengthened it. The
tax monies released into private circulation would promote savings (to form new capital) and investment (to
use that capital) and growth (the product of that investment). Hastened depreciation and eased regulation
would create a wave of new plants capable of cheaper production.
Since government was the problem, not the solution, just getting government out of the way would be a
solution to every economic ill. The Gulliver of American capitalism, tied down with a thousand strings by
Lilliputian bureaucrats, would spring up into boisterous activity.
Source: Reagan’s America, by Garry Wills, p. 365 Jul 2, 1987
Stockman’s plan: cut taxes & encourage defense growth
David Stockman, Reagan’s director of the Office of Management and Budget, wrote with Senator Jack Kemp
a document called “An Economic Dunkirk.” It said that Reagan would need to seize the post-election
euphoria, temper and challenge it with predictions of disaster (“Dunkirk”), declare a state of emergency, and
ram through simultaneous measures that would entirely change public expectations. The nerve to cut
government revenue while encouraging growth (especially in defense) would falter, on Wall Street and in the
Congress, unless confidence were secured by early victories. The budget had to be cut immediately, along
with taxes, to ease congressional apprehension about deficits and business anxiety about interest rates. The
government had to become less competitive for credit while making the private sector more competitive, or
the result would be “Thatcherization,” cuts and stagnation. Everything depended on a “hair-trigger market
Source: Reagan’s America, by Garry Wills, p. 366 Jul 2, 1987
Hold taxes & spending down to maintain economic growth
Reagan's familiar litany was a story of authority usurped by the federal government, of taxes and regulation
slowing the national machine. By controlling such abuses, his administration had seen inflation drop
dramatically and employment figures rise in proportion: "We are creating a nation once again vibrant, robust
Ahead lay four more years of opportunity to restate America's traditional values of "faith, family, work and
neighborhood," to continue rebuilding its defenses and to redirect history "away from totalitarian darkness."
Twenty-five straight months of economic growth, the President went on, proved his tenet "that freedom and
incentives unleash the drive and entrepreneurial genius that are at the core of human progress." But deficit
spending (for which he took no blame) might cramp that drive even as it gathered force. To combat it, he
would ask Congress to hold program spending at current levels for another full year.
Source: Dutch, by Edmund Morris, p.511 Jan 21, 1985
Monday, 15 January, 2001, 12:47 GMT
Bill Clinton's economic legacy
President Bill Clinton will leave office with the longest boom in US history still intact.
But the rapidly slowing economy will leave questions for his successor about how to manage the
Mr Clinton also leaves the legacy of a huge and growing budget surplus, the product of years of bitter
battles between Republicans and Democrats.
But the very size of the surplus has provoked an even bigger debate, with a fierce controversy over how
much of it should be used to cut taxes, how much for spending increases or reductions in the national
And finally, Mr Clinton leaves an international trading system in paralysis, with the collapse of plans for a
new trade round.
That was despite a promising start, which had seen him push through deals with Canada, Mexico, and
China against fierce Congressional opposition.
Mr Bush may well decide to pursue the regional trade agenda further, aiming at creating a free trade
area in the Americas, at the risk of solidifying the world into rival trade blocs.
Mr Clinton's most enduring legacy is likely to be the economic boom which began shortly before he took
office in 1992.
During the eight years of the presidency, the economy expanded by 50% in real terms, and by the end
of his tenure the US had a gross national product of $10,000bn - one quarter of the entire world
The booming US economy has brought economic benefits right across the income spectrum.
The unemployment rate has dropped by half, to 4%, a 40-year-low, while the economy has created
some 15 million jobs.
The stock market grew even faster - by more than three times - creating thousands of millionaires
among middle class stockholders, and employees of fast-growing companies like Microsoft - before the
high tech index, the Nasdaq, fell back sharply this year.
But the growth was not evenly distributed.
The US has the highest rate of inequality of any industrialised country, and that inequality increased
during Mr Clinton's years in office.
It was only in the last few years of the boom that economic growth percolated
down, as average wages began to rise and unemployment fell among minority
Mr Clinton was unable, or unwilling, to do much to combat that inequality.
Some of the policies he embraced, such as the expansion of the earned income
tax credit, were designed to redistribute money to working families.
But others, such as welfare reform, meant that even less government support
was likely for poor people at the bottom of the income distribution.
Healthy public finances
The booming economy and strict controls over government spending has meant that Mr Clinton also
leaves office with the public finances in their strongest shape for decades.
The Office of Management and Budget is projecting a surplus of $5,000bn over the next 10 years,
enough to pay off the entire Federal debt and fund Social Security, the state pension scheme, for several
But that position has been reached after a long political struggle.
Mr Clinton decided early in his term of office that debt reduction, rather than tax cuts, was the best way
to preserve economic growth.
That policy, backed by Mr Greenspan, contributed to the close working relationship that developed
between the Fed and the US Treasury - but left little scope for redistribution.
It also set the scene for a confrontation between Mr Clinton and Congressional Republicans over what
spending to cut in order to reach a balanced budget.
After two government shutdowns when agreement could not be reached on the budget, one that lasted
nearly six weeks, Mr Clinton appeared to win the battle - and the 1996 election.
Saving Social Security
Mr Clinton did manage to preserve spending on certain key programmes, most notably the huge and
popular entitlement programmes for the elderly, Social Security and Medicare.
"Save social security first" was the motto coined by President Clinton in the midst of the budget struggle,
and he has succeeded in ensuring that at least part of the government surplus will be reserved to fund
the future deficits of these programmes.
However, Mr Clinton dodged the more difficult issues of how to reform these programmes in the long-
term, despite a series of bi-partisan commissions.
Now it will be left to President-elect Bush to propose a radical shake-up of social security, allowing
younger workers to partially opt-out of the system and put some of their savings into the stock market
International trade tensions
Mr Clinton left an even more ambiguous legacy in the area of international trade, and leaves office with
the US more exposed than ever before to the international economy.
The US trade deficit - the gap between the goods the US sells to the rest of the world and the amount it
buys - has ballooned to over $400bn, financed by foreign buyers of US stocks, bonds and companies.
That investment has been boosted by a strong dollar poll which also helped keep inflation in check.
Under Mr Clinton, the US Treasury sanctioned a limited intervention in foreign currency markets, first to
save the yen from a catastrophic decline, and second, and less effectively, to try and boost the value of
the euro, the single currency for Europe.
The Fed's interest rate cuts in 1998 also helped stabilise the world financial system and prevent the
Asian crisis spilling over into a global catastrophe - at the cost of increasing imports to the US even
In trade policy the Clinton adminstration has a more mixed legacy.
Against strong opposition from within his own party, Mr Clinton pushed through a trade deal that created
the North American Free Trade Area (NAFTA) between the USA, Canada and Mexico in 1995.
But he was forced to agree to "sideline" agreements incorporating labour and environmental standards.
Mr Clinton was never again able to gain "fast-track" authorisation from Congress, which would have
given him the authority to negotiate further trade deals, and his plans for Latin American free trade zone
soon faltered - as did his ambitions to launch the Pacific Century, using the Asia-Pacific Economic
Cooperation forum (APEC) as the framework for a regional trade opening.
But he did negotiate an agreement with China in 1999 that cleared the way for its membership in the
World Trade Organisation, and managed to persuade Congress to back that deal, encouraging the
world's biggest country to continue its path of economic reform and integration in the world economy.
However, Mr Clinton also played a central role in the collapse of the Seattle trade talks - intended to
launch a new world trade round in 1999.
He went against the advice of his own trade negotiators to urge the inclusion of labour standards issues
in the trade talks, alienating many third world delegates.
The Seattle talks then dissolved into acrimonious failure, with all sides blaming the US for inadequate
preparation and giving in to the domestic political pressures.
And the failure increased trade tensions with the European Union, the only real rival to the US among
world trade blocs.
A number of nagging disputes - over beef, bananas, aircraft subsidies, and tax breaks - continued to
trouble US-EU trade relations.
Now it will be very difficult for President-elect Bush to revive the momentum for global trade talks - and
without US leadership, regional trade agreements may replace global trade negotiations.
Clinton - or Greenspan?
Many observers credit Alan Greenspan, the Fed chief, rather than President Clinton, with the careful
management of the economy.
However, it was the effective alliance between the US Treasury and central bank which cemented the
Mr Clinton's populist instincts were effectively reined in by the tyranny of the bond markets - and low
interest rates helped cut the deficit as well as boost spending.
But on trade, Mr Clinton never succeeded in overcoming the reluctance of his own party to endorse his
"New Democrat" free trade position, leaving trade policy more polarised than ever.
GEORGE BUSH ECONOMIC SUMMARY FROM THE WHITE HOUSE
THE STATE OF THE ECONOMY
"A future of hope and opportunity begins with a growing economy – and that is what we have. … This economy is on the move, and
our job is to keep it that way, not with more government, but with more enterprise.."– President George W. Bush, State Of The Union
The President's Agenda Will Help Keep The American Economy Flexible And Dynamic
Making Tax Relief Permanent: The President reduced taxes for every American who pays income taxes, and calls on
Congress to keep our economy growing by making this tax relief permanent.
Balancing The Budget: President Bush has proposed balancing the budget through pro-growth policies and spending
restraint, enacting common-sense reforms to help prevent billions of taxpayer dollars from being spent on unnecessary
earmarks, and reforming entitlement programs.
Extending Trade Promotion Authority: The President believes the best way to expand opportunity for American workers
and help impoverished nations is to encourage free and fair trade, and he has asked Congress to extend his trade promotion
authority to negotiate trade deals.
Reforming Our Health Care System: In addition to his ongoing policies, the President's State of the Union Address
included new initiatives to help make health care available and affordable for more Americans, including a standard
deduction for health insurance and the Affordable Choices Initiative for States.
Diversifying Our Energy Supply: By increasing the transportation sector's energy diversity and reducing demand for oil,
the President's Twenty in Ten energy plan announced in his State of the Union Address can enhance America's energy
security and help confront the challenge of climate change.
Strengthening Public Education: The President's proposals to strengthen and reauthorize the No Child Left Behind Act
will help ensure that every public school is a place of learning and a force for upward mobility. In addition, the President's
American Competitiveness Initiative will help improve math and science education in middle schools and high schools.
America's Business Leaders Also Have Responsibilities. Shareholders should know what executive compensation packages
look like, so the Securities and Exchange Commission has issued new rules to ensure that these packages are transparent.
Government should not decide compensation for America's corporate executives, but the salaries and bonuses of CEOs should be
based on their success at improving their companies and building value for their shareholders.
Making Tax Relief For All Americans Permanent
Through The End Of 2006, President Bush's Tax Relief Has Helped Spur Economic Growth By Keeping $1.1 Trillion In The
Pockets Of American Taxpayers. The President reduced taxes for every American who pays income taxes, doubled the child tax
credit, reduced the marriage penalty, created new incentives for small businesses to invest, and put the death tax on the road to
extinction. The American people have used the tax relief to provide for their families, create jobs, and help make America's economy
the envy of the industrialized world.
The President Calls On Congress To Keep Our Economy Growing By Making His Tax Relief Permanent. To keep our
economy growing, the President wants to make tax rate reductions and other pro-growth tax relief permanent. He also
supports making permanent the Child Tax credit and the marriage penalty relief.
In May 2006, The President Signed The Tax Increase Prevention And Reconciliation Act Of 2005, Extending His 2003
Tax Cuts On Dividends And Capital Gains. In December 2006, the President signed legislation to extend the deductibility
of tuition and higher education expenses to help more Americans go to college, and to extend and expand the research and
development tax credit to keep our Nation leading the world in technology and innovation.
JOBS: AMERICA'S WORKERS ARE PROSPERING
Since August 2003, More Than 7.2 Million Jobs Have Been Created – More Jobs Than The European Union And Japan
Combined. January 2007 is expected to be the 41st month of uninterrupted job growth since recovery began in August 2003.
(Bureau Of Labor Statistics, Including Benchmark Revision)
Real Wages Rose 1.7 Percent In 2006. This means an extra $1,030 for the typical family of four with two wage earners.
Real After-Tax Income Per Person Has Risen By 9.6 Percent – More Than $2,800 – Since President Bush Took Office.
America's Job Growth Has Been Broad-Based. Job gains were spread broadly across major sectors in 2006. Twenty-five percent
of job growth within the service-providing sector was in health and education-related jobs. (Bureau Of Labor Statistics)
During 2006, Employment Increased In All But One State.
The National Unemployment Rate Remains Low At 4.5 Percent. This is well below the 5.1 percent average rate for 2005, and
below the average of each of the past four decades.
Jobless Rates Are Down Among Most Major Groups. The unemployment rate dropped for each of the four educational-attainment
groups, falling most among those without a high school degree. The jobless rate in this group fell 0.7 percentage point to 6.6 percent
during 2006, and has fallen 1.5 percentage points over the past two years. The unemployment rate fell sharply during 2006 among
Hispanics and blacks (1.1 and 0.9 percentage points, respectively). (Bureau Of Labor Statistics)
Hiring Rates And Voluntary Job Changes Are Higher Than Ever. In 2006, hiring in the nonagricultural sector (4.9 million per
month) was at its highest pace since data collection began in 2001. The share of workers who left their job voluntarily was also the
highest ever at 58.3 percent. (Bureau Of Labor Statistics)
Workers Are Less Likely To Lose Their Jobs. The probability that a typical worker will get fired or laid off over the course of a
month is now 1.1 percent, down from 1.3 percent in 2001. (CEA Calculation Based On Bureau Of Labor Statistics Data)
Workers Are Finding Jobs Faster. The median duration of unemployment declined during 2006, from 8.5 weeks to 7.3 weeks,
close to its historical average. The number of long-term unemployed (those out of work for more than 26 weeks) fell by 263,000
during the year. (Labor Department)
More Opportunities Are Available For College Graduates. Employers reportedly plan to hire 17.4 percent more college graduates
from the class of 2007 than they hired from the class of 2006. This is the fourth straight year of double-digit increases in college
graduate hiring by employers. They also report starting salaries increased for most fields. (National Association Of Colleges And
A Broader Measure Of Unemployment Is Also Down. The percentage of workers who are either working part-time but seeking full-
time employment or who are unemployed has decreased from 8.6 percent a year ago to 8.0 percent in December, matching its lowest
level in over five years. (U-6 Unemployment From Bureau Of Labor Statistics)
The U.S. Economy Has Proven Resilient And Responsive. We lost nearly 1 million jobs in the three months following 9/11. Since
then, the economy has added millions of jobs, and we now have more jobs than in 2000.
Fewer Workers Are Filing For Unemployment Benefits. The monthly average of initial unemployment insurance benefit claims
was 318,000 per week in December, down more than 20 percent since August 2003. As a share of the labor force, this is below the
historical average. (Labor Department)
More Jobs Are Going Unfilled. The seasonally-adjusted rate of job openings (job openings relative to total jobs plus job openings)
was 3.0 percent in November – its highest level since early 2001 – with employers reporting over 4.2 million job openings, an increase
of 53 percent since August 2003. (Bureau Of Labor Statistics)
FAMILIES: PRESIDENT BUSH'S ECONOMIC POLICIES ARE BENEFITING AMERICA'S WORKING
Household Wealth Is At An All-Time High Of More Than $54 Trillion. According to the Federal Reserve Board, real median
household net worth increased 12 percent from 1998 to 2004.
Incomes Have Been Rising. According to the Census Bureau, real median family income increased over $500 (or 1.1 percent)
between 2004 and 2005.
The Poverty Rate Is Declining. The poverty rate decreased from 12.7 percent in 2004 to 12.6 percent in 2005. The poverty rate is
now lower than in all but one year in the 1980s and 1990s, and is far below its most recent peak of 15.1 percent in 1993.
Nearly Half Of All Families Holding Financial Assets Hold Stocks. In 2004, 93.8 percent of all families held some type of financial
assets and 48.6 percent of them held stocks. (Federal Reserve Board)
Consumption Has Been Rising Steadily. Real consumer spending rose at an annual rate of 3.4 percent in the first three quarters
of 2006, supported by strong job gains and rising personal income. (Bureau Of Economic Analysis)
Consumer Prices For Several Commonly-Purchased Goods Have Significantly Declined. Television sets are 55.4 percent less
expensive than they were five years ago; toys – 25.8 percent; durable goods – 8.7 percent; appliances – 6.5 percent; and apparel –
4.0 percent. (Bureau of Labor Statistics)
The Homeownership Rate Is Near Its Record High, And The Number Of Homeowners Is At Record Level. According to the
Census Bureau, a record 75 million families own the home they are living in, and the homeownership rate, at 68.7 percent, is near its
Young Students Show Academic Gains. According to the National Assessment of Educational Progress (NAEP), the achievement
of young students has risen in recent years. In 2005, America's fourth graders posted the best reading and math scores in the test's
history. For fourth graders, in reading there was more progress between 1999 and 2004 than in the previous 28 years combined.
Eighth graders earned the highest math scores ever recorded for that grade by the NAEP. (National Center For Education Statistics)
College Tuition Remains An Affordable Investment. College enrollment rates among 18 to 19-year-olds increased by 6
percentage points from 2000 to 2005. 2005 marks the first year in which enrollment rates for this group passed 50 percent. Average
net tuition and fees (accounting for grants) at four-year public universities was $2,700 for the 2006-07 academic year, and
represented just 8 percent of income for families in the lowest income quartile. (National Center For Education Statistics, Census
Bureau, and College Board)
Barack Obama and Joe Biden's Plan
Plan to Strengthen the Economy
Wages are Stagnant as Prices Rise: While wages remain flat, the costs of basic necessities are increasing. The cost of in-state
college tuition has grown 35 percent over the past five years. Health care costs have risen four times faster than wages over the past
six years. And the personal savings rate is now the lowest it's been since the Great Depression.
Tax Cuts for Wealthy Instead of Middle Class: The Bush tax cuts give those who earn over $1 million dollars a tax cut nearly 160
times greater than that received by middle-income Americans. At the same time, this administration has refused to tackle health care,
education and housing in a manner that benefits the middle class.
Jumpstart the Economy
Enact a Windfall Profits Tax to Provide a $1,000 Emergency Energy Rebate to American Families:Barack Obama and
Joe Biden will enact a windfall profits tax on excessive oil company profits to give American families an immediate $1,000
emergency energy rebate to help families pay rising bills. This relief would be a down payment on the Obama-Biden long-
term plan to provide middle-class families with at least $1,000 per year in permanent tax relief.
Provide $50 billion to Jumpstart the Economy and Prevent 1 Million Americans from Losing Their Jobs: This relief
would include a $25 billion State Growth Fund to prevent state and local cuts in health, education, housing, and heating
assistance or counterproductive increases in property taxes, tolls or fees. The Obama-Biden relief plan will also include $25
billion in a Jobs and Growth Fund to prevent cutbacks in road and bridge maintenance and fund school repair - all to save
more than 1 million jobs in danger of being cut.
Provide Middle Class Americans Tax Relief
Obama and Biden will cut income taxes by $1,000 for working families to offset the payroll tax they pay.
Provide a Tax Cut for Working Families: Obama and Biden will restore fairness to the tax code and provide 150 million
workers the tax relief they need. Obama and Biden will create a new "Making Work Pay" tax credit of up to $500 per person,
or $1,000 per working family. The "Making Work Pay" tax credit will completely eliminate income taxes for 10 million
Eliminate Income Taxes for Seniors Making Less than $50,000: Barack Obama will eliminate all income taxation of
seniors making less than $50,000 per year. This proposal will eliminate income taxes for 7 million seniors and provide these
seniors with an average savings of $1,400 each year. Under the Obama-Biden plan, 27 million American seniors will also not
need to file an income tax return.
Simplify Tax Filings for Middle Class Americans: Obama and Biden will dramatically simplify tax filings so that millions of
Americans will be able to do their taxes in less than five minutes. Obama and Biden will ensure that the IRS uses the
information it already gets from banks and employers to give taxpayers the option of pre-filled tax forms to verify, sign and
return. Experts estimate that the Obama-Biden proposal will save Americans up to 200 million total hours of work and
aggravation and up to $2 billion in tax preparer fees.
Obama and Biden believe that trade with foreign nations should strengthen the American economy and create more American jobs.
He will stand firm against agreements that undermine our economic security.
Fight for Fair Trade: Obama and Biden will fight for a trade policy that opens up foreign markets to support good American
jobs. They will use trade agreements to spread good labor and environmental standards around the world and stand firm
against agreements like the Central American Free Trade Agreement that fail to live up to those important benchmarks.
Obama and Biden will also pressure the World Trade Organization to enforce trade agreements and stop countries from
continuing unfair government subsidies to foreign exporters and nontariff barriers on U.S. exports.
Amend the North American Free Trade Agreement: Obama and Biden believe that NAFTA and its potential were
oversold to the American people. They will work with the leaders of Canada and Mexico to fix NAFTA so that it works for
Improve Transition Assistance: To help all workers adapt to a rapidly changing economy, Obama and Biden will update
the existing system of Trade Adjustment Assistance by extending it to service industries, creating flexible education accounts
to help workers retrain, and providing retraining assistance for workers in sectors of the economy vulnerable to dislocation
before they lose their jobs.
End Tax Breaks for Companies that Send Jobs Overseas: Barack Obama and Joe Biden believe that companies should
not get billions of dollars in tax deductions for moving their operations overseas. Obama and Biden will also fight to ensure
that public contracts are awarded to companies that are committed to American workers.
Reward Companies that Support American Workers: Barack Obama introduced the Patriot Employer Act of 2007 with
Senators Richard Durbin (D-IL) and Sherrod Brown (D-OH) to reward companies that create good jobs with good benefits for
American workers. The legislation would provide a tax credit to companies that maintain or increase the number of full-time
workers in America relative to those outside the US; maintain their corporate headquarters in America if it has ever been in
America; pay decent wages; prepare workers for retirement; provide health insurance; and support employees who serve in
Invest in the Manufacturing Sector and Create 5 Million New Green Jobs
Invest in our Next Generation Innovators and Job Creators: Obama and Biden will create an Advanced Manufacturing
Fund to identify and invest in the most compelling advanced manufacturing strategies. The Fund will have a peer-review
selection and award process based on the Michigan 21st Century Jobs Fund, a state-level initiative that has awarded over
$125 million to Michigan businesses with the most innovative proposals to create new products and new jobs in the state.
Double Funding for the Manufacturing Extension Partnership: The Manufacturing Extension Partnership (MEP) works
with manufacturers across the country to improve efficiency, implement new technology and strengthen company growth.
This highly-successful program has engaged in more than 350,000 projects across the country and in 2006 alone, helped
create and protect over 50,000 jobs. But despite this success, funding for MEP has been slashed by the Bush administration.
Barack Obama and Joe Biden will double funding for the MEP so its training centers can continue to bolster the
competitiveness of U.S. manufacturers.
Invest In A Clean Energy Economy And Create 5 Million New Green Jobs: Obama and Biden will invest $150 billion
over 10 years to advance the next generation of biofuels and fuel infrastructure, accelerate the commercialization of plug-in
hybrids, promote development of commercial scale renewable energy, invest in low emissions coal plants, and begin
transition to a new digital electricity grid. The plan will also invest in America's highly-skilled manufacturing workforce and
manufacturing centers to ensure that American workers have the skills and tools they need to pioneer the first wave of green
technologies that will be in high demand throughout the world.
Create New Job Training Programs for Clean Technologies: The Obama-Biden plan will increase funding for federal
workforce training programs and direct these programs to incorporate green technologies training, such as advanced
manufacturing and weatherization training, into their efforts to help Americans find and retain stable, high-paying jobs.
Obama and Biden will also create an energy-focused youth jobs program to invest in disconnected and disadvantaged
Boost the Renewable Energy Sector and Create New Jobs: The Obama-Biden plan will create new federal policies, and
expand existing ones, that have been proven to create new American jobs. Obama and Biden will create a federal
Renewable Portfolio Standard (RPS) that will require 25 percent of American electricity be derived from renewable sources
by 2025, which has the potential to create hundreds of thousands of new jobs on its own. Obama and Biden will also extend
the Production Tax Credit, a credit used successfully by American farmers and investors to increase renewable energy
production and create new local jobs.
New Jobs Through National Infrastructure Investment
Barack Obama and Joe Biden believe that it is critically important for the United States to rebuild its national transportation
infrastructure – its highways, bridges, roads, ports, air, and train systems – to strengthen user safety, bolster our long-term
competitiveness and ensure our economy continues to grow.
Create a National Infrastructure Reinvestment Bank: Barack Obama and Joe Biden will address the infrastructure
challenge by creating a National Infrastructure Reinvestment Bank to expand and enhance, not supplant, existing federal
transportation investments. This independent entity will be directed to invest in our nation’s most challenging transportation
infrastructure needs. The Bank will receive an infusion of federal money, $60 billion over 10 years, to provide financing to
transportation infrastructure projects across the nation. These projects will create up to two million new direct and indirect
jobs and stimulate approximately $35 billion per year in new economic activity.
Technology, Innovation and Creating Jobs
Barack Obama and Joe Biden will increase federal support for research, technology and innovation for companies and universities so
that American families can lead the world in creating new advanced jobs and products.
Invest in the Sciences: Barack Obama and Joe Biden support doubling federal funding for basic research and changing the
posture of our federal government from being one of the most anti-science administrations in American history to one that
embraces science and technology. This will foster home-grown innovation, help ensure the competitiveness of US
technology-based businesses, and ensure that 21st century jobs can and will grow in America.
Make the Research and Development Tax Credit Permanent: Barack Obama and Joe Biden want investments in a skilled
research and development workforce and technology infrastructure to be supported here in America so that American
workers and communities will benefit. Obama and Biden want to make the Research and Development tax credit permanent
so that firms can rely on it when making decisions to invest in domestic R&D over multi-year timeframes.
Deploy Next-Generation Broadband: Barack Obama and Joe Biden believe we can get broadband to every community in
America through a combination of reform of the Universal Service Fund, better use of the nation's wireless spectrum,
promotion of next-generation facilities, technologies and applications, and new tax and loan incentives.
Support Small Business
Provide Tax Relief for Small Businesses and Start Up Companies: Barack Obama and Joe Biden will eliminate all
capital gains taxes on start-up and small businesses to encourage innovation and job creation. Obama and Biden will also
support small business owners by providing a $500 “Making Work Pay” tax credit to almost every worker in America. Self-
employed small business owners pay both the employee and the employer side of the payroll tax, and this measure will
reduce the burdens of this double taxation.
Create a National Network of Public-Private Business Incubators: Barack Obama and Joe Biden will support
entrepreneurship and spur job growth by creating a national network of public-private business incubators. Business
incubators facilitate the critical work of entrepreneurs in creating start-up companies. Obama and Biden will invest $250
million per year to increase the number and size of incubators in disadvantaged communities throughout the country.
Obama and Biden will strengthen the ability of workers to organize unions. He will fight for passage of the Employee Free Choice Act.
Obama and Biden will ensure that his labor appointees support workers' rights and will work to ban the permanent replacement of
striking workers. Obama and Biden will also increase the minimum wage and index it to inflation to ensure it rises every year.
Ensure Freedom to Unionize: Obama and Biden believe that workers should have the freedom to choose whether to join a
union without harassment or intimidation from their employers. Obama cosponsored and is strong advocate for the
Employee Free Choice Act, a bipartisan effort to assure that workers can exercise their right to organize. He will continue to
fight for EFCA's passage and sign it into law.
Fight Attacks on Workers' Right to Organize: Obama has fought the Bush National Labor Relations Board (NLRB) efforts
to strip workers of their right to organize. He is a cosponsor of legislation to overturn the NLRB's "Kentucky River" decisions
classifying hundreds of thousands of nurses, construction, and professional workers as "supervisors" who are not protected
by federal labor laws.
Protect Striking Workers: Obama and Biden support the right of workers to bargain collectively and strike if necessary.
They will work to ban the permanent replacement of striking workers, so workers can stand up for themselves without
worrying about losing their livelihoods.
Raise the Minimum Wage: Barack Obama and Joe Biden will raise the minimum wage, index it to inflation and increase the
Earned Income Tax Credit to make sure that full-time workers earn a living wage that allows them to raise their families and
pay for basic needs.