June 7 ushers in the 10th anniversary of Bush’s tax cuts, and history clearly shows that they were disastrous economic policy. In a new Policy Memo, Tenth Anniversary of the Bush-Era Tax Cuts: A decade later, the Bush tax cuts remain expensive, ineffective, and unfair, EPI policy analysts Andrew Fieldhouse and Ethan Pollack provide a comprehensive look at the effect of the Bush tax cuts on the U.S. economy.
“Since enacted, the Bush tax cuts have exacerbated the trend of widening income inequality, accompanied the worst economic expansion since World War II, and turned budget surpluses into deficits,” the authors wrote.
The paper enumerates the worst results of the tax cuts, which include: widening income inequality by disproportionately benefiting the wealthy and ignoring low-income families; helping destroy budget surpluses; and significantly adding to the national debt. If made permanent, these tax cuts would still fail to generate strong employment and wage growth, and they would cost many more trillions of dollars, crowding out other budget priorities.
Cumulative benefits of the new EPA rules far outweigh costs
In Tallying Up the Impact of New EPA Rules, EPI Director of Regulatory Policy Research Isaac Shapiro addresses criticisms concerning the combined effect of President Obama’s EPA regulations. In the paper, Shapiro provides the only comprehensive tally of the new major EPA rules and finds that the regulations would have great public health benefits with minimal costs to the overall economy.
“The results of this uniquely comprehensive study clearly show how modest the costs of these regulations are relative to the size of the economy. When you factor in the extended period over which they will take effect, these rules will not stifle economic or job growth,” said Shapiro.
The combined annual benefits from all the major EPA regulations finalized so far under the Obama administration exceed their costs by at least $32 billion and perhaps by as much as $142 billion a year. These costs represent only 0.1 percent of the economy and are far outweighed by the enormous benefits in terms of lives saved and illnesses avoided. The EPI paper also includes an analysis of the administration’s proposed major rules, and the results are similarly striking. The combined annual benefits from the four proposed rules examined in the report exceed their costs by a range of $160 billion to $440 billion a year. When the finalized and proposed rules are combined, they still equal a tiny sliver (0.3 percent) of the overall economy.
“The regulations finalized and proposed by the Obama administration are likely to be of tremendous value to the nation, producing a wide range of significant health benefits,” said Shapiro. For example, the proposed air toxics rule, which regulates the amount of hazardous pollutants emitted, will save an estimated 6,800–17,000 lives ayear.
Government regulations save lives on the job
In this week’s Economic Snapshot, Government regulations save lives on the job, EPI Vice President Ross Eisenbrey finds that many thousands of lives have been saved by government regulations. The Occupational Safety and Health Act of 1970 and the agencies the Act created—the Occupational Safety and Health Administration (OSHA) and the National Institute for Occupational Safety and Health— have made on-the-job fatalities far less frequent than they used to be.
“In 1970, with a workforce of about 83 million, an estimated 14,000 workers were killed on the job, averaging about 38 deaths a day,” wrote Eisenbrey.
Today every occupational sector now operates more safely than before the Act’s passage. In 2009, there were 4,340 on the job fatalities, or 11.9 deaths per day. This decrease is all the more impressive when one considers today’s workforce is almost twice as large as in 1970. Nevertheless, more work can and should be done to make these incidents even rarer.
“While still far too many deaths, the improvement is a remarkable achievement that saves thousands of families from tragedy, grief, and financial loss,” said Eisenbrey.
EPI in the News
Washington Post writer Ezra Klein quoted EPI President Lawrence Mishel in his article, GOP Jobs Plan: Old ideas, fancy new clip art. Speaking about the fallacies behind failed GOP policies, Mishel said: “If lower taxes and less regulation was such good policy, then George W. Bush’s economy would have been a lot better. But under Bush, Republicans cut taxes on business and on investors and high-income people, and they didn’t add many regulations, and that business cycle was the first one in the postwar period where the income for a typical working-class family was lower at the end than at the beginning.”
“The very bad labor market would be enough to freeze wages on its own, but now unions are under siege and workers may be willing to take contracts that aren’t as good,” EPI economist Heidi Shierholz told the LA Times in a story on the labor markets effect on job wages.