News Release

ECONOMISTS, LABOR LEADERS: ECONOMY NEEDS SUBSTANTIAL, STRATEGIC, SUSTAINED $900B OR MORE BOOST OVER TWO YEARS

Experts Outline Details for a Bold Economic Recovery Package to Help Turn Around Longest Downturn since Great Depression

WASHINGTON – The economy needs at least a $900 billion boost over the next two years, according to a detailed economic recovery plan released today by more than a hundred economists and dozens of labor and public interest leaders who represent more than 20 million Americans.

With payrolls plunging, retail sales dropping and manufacturing contracting, the Campaign for America’s Future today released a statement signed by 127 economists, 27 major labor leaders and 59 public interest organizations, outlining a “substantial, strategic, and sustained” program for economic recovery. The statement, released on a conference call with reporters today, calls for a floor of $450 billion a year for the next two years. Given the severity of the recent financial crisis, they argue that $450 billion a year over two years should be considered the “floor” of any plan.

The plan stresses that investments be made in areas vital to the economy – in energy efficiency and renewable energy, in modernizing our collapsing infrastructure and in expanding pre-kindergarten and college affordability. It urges aid to states and localities to avoid devastating layoffs, and assistance to the low wage workers most impacted by the downturn.

Campaign for America’s Future co-director Robert Borosage said these investments should be made as soon as possible and not only continue for two years, but be sustained with needed investments afterwards.

“Congress must know by now that the time for delay, for half-measures, for one-off rebates is over. We need a substantial, strategic and sustained plan to get this economy going,” said Borosage. “President Obama has the moment, the mandate, and the majority to drive fundamental reform over this next period. It is vital that citizen leaders not sit by passively, but help define the course and clear the way.”

University of Texas professor and economist James Galbraith joined Borosage on today’s call. Galbraith said these investments will have a greater return on investment in generating jobs and growth than tax cuts, and should be the centerpiece of a strategic recovery plan.

“Economic recovery in an existential crisis like this means actually building a new economy,” said Galbraith. “For that, we need investment—to restore our roads, rails, transit, broadband, and water systems, to build parks and museums and libraries, to protect the environment.”

United Steelworkers president and AFL-CIO executive council chair Leo Gerard also joined Borosage on today’s call. Gerard said signers of today’s statement will mobilize a major educational effort to encourage Congress to act rapidly to create a plan ready for President-elect Barack Obama to sign on day one, noting that “substantial action to get the real economy going is long overdue.”

Breakdown of the investments outlined in the economic plan (investment area -- first year, second year. Figures in billions):

--Green investments -- 50, 50
--Infrastructure -- 75, 150
--Aid to states -- 50, 75
--Education -- 40, 40
--Research and development -- 5, 10
--Health care -- 15, 55
--Unemployment insurance and COBRA subsidy -- 15, 15
--Food stamps -- 15, 15
--Poverty reduction -- 40, 40
--Middle-class tax cut -- 145, -
--Total over two years -- 900

More than 127 economists, 27 major labor leaders and 59 public interest organizations signed the Campaign for America’s Future’s economic plan. Signers include:

--John Sweeney, president, AFL-CIO
--Andrew Stern, president, SEIU
--Gerald McEntee, international president, AFSCME
--Anna Burger, chair, Change to Win
--Ron Gettelfinger, president, UAW
--Dennis van Roekel, president, NEA
--Leo Gerard, international president, USW
--Mike Wessell, senior advisor, Alliance for American Manufacturing
--Robert Borosage, co-director, Campaign for America's Future
--David Bonior, chair, American Rights at Work
--James Galbraith, economist
--Robert Johnson, economist
--Heidi Hartmann, President, Institute for Women’s Policy Research
--Jane D'Arista, Financial Markets Center
--Robert Kuttner, co-editor, The American Prospect and Demos senior fellow
--Julie Matthaei, Professor of Economics, Wellesley College
--Jeff Faux, economist, Economic Policy Institute
--Dean Baker, economist, Center for Economic and Policy Research
--Carl Pope, director, Sierra Club