LCCR and Coalition on Human Needs Letter Asking for Support of the Senate Finance Stimulus Package
Recipient: U.S. Senate
Support the Senate Finance Stimulus Package
February 6, 2008
On behalf of the Leadership Conference on Civil Rights (LCCR), the nationýs oldest, largest, and most diverse coalition of civil and human rights organizations with nearly 200 organizations, and the Coalition on Human Needs, an alliance of over 110 religious, service provider, labor, and other organizations advocating for the needs of low-income and vulnerable people, we are writing in support of the Economic Stimulus Act of 2008 as reported out of the Senate Finance Committee. While we are disappointed that this legislation does not address the burgeoning state and local fiscal crisis, it is nonetheless a balanced package that includes important provisions including extended unemployment benefits, which are badly needed by many American workers who have lost their jobs.
Economists across the political spectrum agree with Federal Reserve Chair Ben Bernanke, who testified, ýThere is good evidence that cash that goes to low- and moderate-income people is more likely to be spent in the near term.ý Extended unemployment insurance, increased food stamps, home energy assistance, and tax rebates for people with incomes too low to owe federal income taxes are among the most efficient stimuli, because the recipients will use the income to pay bills and purchase necessities. Economists also believe that federal aid to states will prevent the downturn from worsening by minimizing cuts in services such as Medicaid, child support enforcement, and education, and by reducing the need for state or local tax increases.
Unemployment Insurance is critical to the recovery. The legacy of the slow recovery from the last recession is that it takes longer for workers to regain employment after losing their jobs. In December of 2007, the average unemployed worker was jobless for 16.5 weeks, compared with 12.8 weeks at the start of the previous recession in March 2001. Some racial groups are more likely to be unemployed longer. In 2006, the average duration of joblessness for unemployed whites over age 16 was 15.6 weeks; for African Americans it was 20.4 weeks; for Asians, 21.3 weeks. Similarly, older unemployed men and women stay out of work longer. Women and men aged 55-64 remained jobless 22.2 weeks and 23.8 weeks respectively in 2006. If unemployment benefits are not extended, the National Employment Law Project estimates that nearly 1.3 million unemployed people will exhaust their state benefits between this month and June 2008. Extending benefits and providing federal funds to increase them $50 a week will channel urgently needed dollars to disproportionately low-income groups, and will reach people quickly.
LCCR also strongly urges the inclusion of a food stamp expansion. A short-term increase in Food Stamp benefits will generate $1.73 in new economic activity for each dollar invested, according to economist Mark Zandi of Moodyýs economy.com. Close to 27 million people use Food Stamps, of whom 88 percent are poor. A 10 percent increase in maximum Food Stamp benefits would result in an increase of $44 per month for a mother earning the minimum wage with two children, according to the Center on Budget and Policy Priorities. Food Stamps are particularly effective as a stimulus because the increase can be added to the debit cards used by recipients within about 30 days of enactment ý far faster than the distribution of tax rebates.
LCCR also strongly supports the amendment that may be offered by Senator Rockefeller, which provides $12 billion in state fiscal relief split between an increase in the federal match for Medicaid (FMAP) and targeted grants to states. The fiscal condition of many states is already showing sign of serious strain. Already at least 25 states face a budget shortfall in Fiscal Year 2009 and more promise to follow. An increase in FMAP not only provides states immediate fiscal relief, but the benefits also help ensure the continuation of health insurance coverage to children and the poor. The Rockefeller amendment helps children and families, and it was used effectively in 2003 when fiscal relief legislation included an increased match for Medicaid.
If the stimulus package is to work quickly, it needs to reach as many low- and moderate- income people as possible. Tax rebates, even ones equitably distributed as in the House plan, will not reach older people or people with disabilities who lack earnings. Food Stamps, home energy assistance through LIHEAP, and state aid will reach them, resulting both in money returned swiftly to the economy and reduced health crises that would otherwise burden individuals and states.
Finally, LCCR urges you to reject the insertion of anti-immigrant provisions in stimulus legislation. Such language will inevitably create barriers to serving eligible needy people. This is a time when preventing a recession should be uppermost; divisions that distract from that goal do not serve the national interest.
Enacting a balanced stimulus plan of direct expenditures and limited, targeted tax rebates will simultaneously provide effectiveness and equity. We urge you to support and work for speedy enactment of such a plan. If you have any questions, please feel free to contact Deborah Weinstein at 202.223.2352, x31 or Nancy Zirkin at 202.263.2880.
Wade Henderson, President and CEO, Leadership Conference on Civil Rights
Nancy Zirkin, Executive Vice President/ VP for Policy, Leadership Conference on Civil Rights
Deborah Weinstein,Executive Director, Coalition on Human Needs