FACT SHEET | June 19, 2008

Middle-Class Life Under Bush: Less Affordable and Less Secure

For millions of hard-working, middle-class families, life under the Bush presidency has grown less affordable and less secure.President Bush's record of fiscal incompetence and mismanagement and Republicans' close ties with special interests have helped lead to both lower wages and skyrocketing costs for basic necessities like gas, health care, and college tuition. As an alarming indicator of how bad things have gotten, in March, consumer confidence hit a five-year low and the Expectations Index dropped to a 35-year low, a level not seen since the Oil Embargo and Watergate. Since then, these two measures have continued to decline. (The Conference Board, 5/27/08)Unfortunately, instead of producing solutions to the problems facing the middle class, Bush Republicans have ignored them and pushed for policies that would make matters even worse.


In addition to tightening the squeeze on families, Bush Republican policies have made our entire nation less financially secure.Republicans increased our debt to over $9 trillion and have insisted on spending billions of dollars every year on budget-busting tax breaks for special interests and multi-millionaires. The Bush Administration also continues to compromise our economic security by increasing our reliance on foreign investment from China, Japan, and Dubai.


Middle-class families, and our nation, deserve better.Democrats are committed to protecting middle-class taxpayers, expanding educational opportunities, improving health and healthcare, providing more affordable and sustainable sources of energy, ensuring better pay and protections for working Americans, and restoring fiscal responsibility. Under Democratic leadership, the Senate has already passed the Economic Stimulus Act of 2008- legislation that will boost the economy by offering timely, targeted, and temporary measures to provide rebate checks to eligible single, married, and elderly Americans, provide tax relief for American businesses, and help families avoid foreclosure by expanding financing opportunities. In addition, the College Cost Reduction and Access Actwill make college more affordable and accessible and the bipartisan America COMPETES Act,whichmakes important investments in our students and teachers, have been signed into law. For the second year in a row, Democrats have approved a balanced budget to restore fiscal responsibility and help promote the type of economic growth that provided so many benefits to middle-class families during the 1990s.


For more information, please see DPC documents entitled Democrats are Committed to Making the American Dream Affordable Again, available hereandDemocrats Continue to Strengthen the Economy and the American Middle Class, available here.


Middle-Class Families Squeezed By Skyrocketing Costs


Health care premiums have increased 78 percent. The cost of family health insurance has skyrocketed 78 percent since 2001.[1]This is compared to a 19 percent increase in wages and a 17 percent increase in overall inflation.[2] The average premium for a family of four topped $12,000 in 2007, with the average family contribution of over $3,200.[3]When premium growth outpaces increases in wages and inflation, workers typically have to spend a greater portion of their income each year in order to maintain coverage.[4] From 2001 to 2007, the amount families pay out of pocket for their share of premiums has increased by approximately $1,500.[5]



Rising health care costs also jeopardize employer-sponsored coverage. When the cost of premiums increases, employers have more difficulty providing health coverage, and their workers have more difficulty affording their share of the cost. With the increased cost of premiums during the Bush Administration, there has been an erosion of employment-based health benefits. The percentage of individuals with employment-based health benefits decreased from 68.4 percent in 2000 to 62.2 percent in 2006.[6] A significant cause of the increase in the number of uninsured Americans is this decline in the number of people receiving health coverage through their employer.[7] The number of uninsured Americans has increased every year since President Bush took office, from 39.8 million in 2000 to a record high of 47 million in 2006.[8] In 2006, the number of uninsured children grew by 710,000 to reach 9.4 million.[9] This is the second year in a row that the number of children without health insurance has increased.


Gas prices are at an historic high. Prices at the gas pump have jumped 178 percentfrom$1.47 per gallon the week President Bush took office in January 2001[10]to an all-time high of $4.08 in the latest week of energy price data.[11]The price for a barrel of oil has increased 309.4 percent during the Bush Administration from $30.63 in January 2001 to $125.40 in May 2008.[12]The average household with children will spend about $5,402on transportation fuel costs in 2008, an increase of 184 percent or $3,499over 2001 costs.[13]



College education costs have risen by over 60 percent.Average tuition, fees, room and board costs at four-year private universities have increased by $10,067,from $22,240 in the 2000-2001 academic year to $32,307 in the 2007-2008 academic year.[14]Tuition, fees, room and board charges at four-year public colleges jumped from $8,439 for the 2000-2001 academic year to $13,589 for the 2007-2008 academic year - an increase of $5,150, or 61percent.[15]



The cost of a college education is rising faster than family income, but key federal tuition assistance programs such as the Pell Grant program have failed to keep pace with the rising cost of college. While the maximum Pell Grant covered 51 percent of the cost of tuition, fees, room, and board at a public four-year college during the 1986-1987 school year, it covered only about one-third of those costs in the 2005-2006 school year.[16]


Housing affordability remains pervasive problem.According to the Washington Post, "the scarcity of affordable housing is a deepening national crisis, and not just for inner-city families on welfare. The problem has climbed the income ladder and moved to the suburbs, where service workers cram their families into overcrowded apartments, college graduates have to crash with their parents, and firefighters, police officers and teachers can't afford to live in the communities they serve."[17]


The Joint Center for Housing Studies of Harvard University has predicted that housing affordability will continue to be a "pervasive problem."[18]Current data indicates that the percentage of median income spent on mortgage payments has risen from 18.6 percent in January 2001 to 19.3 percent in April 2008.[19]In addition, between 2004 and 2005, the number of households with housing cost burdens in excess of 30 percent climbed by 2.3 million, hitting a record 37.3 million in 2005."[20]According to the Center, "five years of stagnating or declining incomes have added to housing affordability problems"[21]and "the need to address housing affordability problems is intensifying as the pressures grow more acute and spread up the income scale."[22]Indeed, the Center for Housing Policy recently concluded that "[d]espite the housing slump, most middle income workers still don't earn enough to buy a median-priced home in their hometowns." Although home prices are coming down, "home costs were still too high for typical working people in most markets." Even when home ownership is possible, "[p]eople are having to stretch their wages from paycheck to paycheck, make sacrifices or move farther out [from their jobs] to afford housing."[23]


Meanwhile, there has been an alarming increase in foreclosures as subprime borrowers' loans reset to higher rates.[24]The number of homes facing foreclosure more than doubled in the first quarter of 2008 from a year earlier, "as weakening property values and tighter lending forced many homeowners to give up their homes."[25]In addition, "[f]oreclosurefilings last month were up nearly 50 percent compared with a year earlier...According to the RealtyTrac report, 'one in every 483 U.S. households received a foreclosure filing in May, the highest number since RealtyTrac started the report in 2005 and the second straight monthly record.'"[26]


A new report by the Pew Center estimates that one in 33 current U.S. homeowners will experience foreclosure in the next two years as a direct result of the subprime loans made in 2005 and 2006.[27]According to the Center for Responsible Lending , this is the failure of one out of every five (19 percent) subprime mortgages made in recent years, resulting in a projected 2.4 million foreclosures on homes purchased with subprime loans made during 1998-2006.[28]And the Wall Street Journa noted that "[t]he surprisingly high number of subprime loans among more credit-worthy borrowers shows how far such mortgages have spread into the economy - including middle-class and wealthy communities where they once were scarce."[29]


Subprime borrowers are not the only victims of this crisis. Even homeowners with strong credit, who are in safe, fixed-rate loans are suffering from the reduction in property values and home equity wealth that result from foreclosures within their neighborhood.[30]Entire communities, especially those that are already vulnerable to economic disruptions, are at significant risk. Moreover, the resulting credit crisis in the mortgage markets is making safe, affordable mortgages less available for aspiring homeowners or borrowers in need of a refinancing alternative. As a result, the American dream of owning a home is becoming less and less of a reality for millions of Americans and their families.


Middle-Class Families Squeezed By Declining Income and Fewer Job Opportunities


While families work harder, their wages continue to decline. Middle-class families are working harder and earning less today than they were at the start of the Bush Administration. Median household income, adjusted for inflation, has declined $982 from $50,566 in 2000 to $49,584 in 2006.[31]



During the last seven years under President Bush, the government's measure of take-home pay (median weekly earnings) increased by a mere 0.3 percent (adjusted for inflation), compared with 7.7 percent growth between 1989 and 2000 (the last comparable business cycle).[32]In April, "the government reported that average earnings slipped in March after accounting for the rising costs of food and fuel - the sixth consecutive month that pay failed to keep pace with inflation."[33]


Meanwhile, employment compensation has lagged behind productivity gains. While the productivity of the American worker (output per hour) rose by 20.3 percent between the fourth quarter of 2000 and the first quarter of 2008, average hourly compensation (wages plus benefits, adjusted for inflation) increased by only 9.7 percent during this period.[34]



Between the fourth quarter of 2007 and first quarter of 2008, productivity in the non-farm business sector further improved by 2.4 percent, but real hourly compensation increased by only 0.4 percent.[35]In sum, Americans are working harder - and more productively - but are not receiving proportionally increased rewards for their hard work.


This is counter to historical trends: "Economic theory holds that when output per worker rises, so should wages, and hence living standards. In practice, that's what transpired so impressively in the United States during much of the last century. But recent data suggests that for many workers, the elixir has lost its potency...many observers contend that the link between productivity and pay is broken. Employees are working harder and smarter, they charge, but are reaping no reward for the extra effort."[36]


So who has benefited from these productivity gains? The New York Times reported that: "an outsized share of productivity growth, which expands the nation's total income, is going to Americans at the top of the income scale. In 2005...the top 1 percent of Americans - whose average annual income was $1.1 million - took in 21.8 percent of the nation's income, their largest share since 1929."[37]According to the Wall Street Journal, "[s]ince the end of the recession of 2001, a lot of the growth in GDP per person - that is, productivity - has gone to profits, not wages."[38]Economists at the National Bureau of Economic Research concluded that: "[t]o the extent that the productivity growth 'explosion' of 2001-2004 was achieved by cost-cutting, layoffs, and abnormally slow employment growth...the historical link between productivity growth and higher living standards falls apart. Not only have the bottom 90 percent of American workers failed to keep up with productivity growth, many have been harmed by it."[39]


Earnings for workers with college degrees declining.TheNew York Timeshas observed that "a college degree does not ensure a bigger share of the economic pie for many graduates."[40]In addition, the Los Angeles Times reported that: "[w]age stagnation, long the bane of blue-collar workers, is now hitting people with bachelor's degrees for the first time in 30 years. Earnings for workers with four-year degrees fell 5.2 percent from 2000 to 2004 when adjusted for inflation, according to White House economists...Not since the 1970s have workers with bachelor's degrees seen a prolonged slump in earnings during a time of economic growth...trends for people with master's and other advanced degrees...have found that their inflation-adjusted wages were essentially flat between 2000 and 2004."[41]And, according to U.S. Census data, "the number of college graduates earning below the poverty line has more than doubled in the past 15 years to almost 6 million people."[42]


Job creation among the worst since Hoover Administration. A growing economy should be good news for those seeking jobs. But over the course of his term in office, President Bush is in a statistical dead heat with his father for the worst overall job creation record since Herbert Hoover more than 70 years ago.




Overall non-farm payroll employment has increased by just 5.28 million since President Bush took office in January 2001 compared with 22.7 million during the Clinton presidency.[43]Overall employment growth has averaged just 60,000 jobs per month under President Bush (or 0.5 percent per year)[44]- not even half of the 150,000 jobs needed each month to keep up with population growth. It was not uncommon to see monthly job gains of 300,000 and even 400,000 during economic expansions during the Clinton Administration.[45]


Private sector job creation has been especially poor during the Bush presidency, with only 3.7 million new non-governmental jobs created since 2001, an increase of only 0.4 percent per year.[46]



The Washington Timescompared the slow job creation growth rate of private sector jobs under the "Bush era" with the 23 percent increase in private sector jobs during the Clinton presidency (an increase of more than 21 million new jobs).[47]The manufacturing sector, often the source of jobs with good pay and benefits, has lost 3.54 million jobs since the start of the Bush Administration.[48]Given the turbulence and uncertainty in the economy today, the pace of job creation is an ominous sign for future job creation for America's middle-class families.


The unemployment rate has increased 31 percent and long-term joblessness has nearly doubled. In part because of this failure to create a sufficient number of jobs, the national unemployment rate stands at 5.5 percent[49], 0.1.3 percentage points, or 31 percent, higher than the 4.2 percent rate when President Bush took office. This represents 8.5 million people who are officially counted as unemployed - over one million more people than were unemployed in January 2001.


Unfortunately, once they lose their job, America's workers also are staying unemployed longer.[50]Nearly one in five (19.3 percent) had been unemployed for more than 26 weeks, an increase of 70.8 percent since President Bush took office (from 676,000 in January 2001 to 1,557,000 in May2008).[51]And this doesn't even count the Americans who have been discouraged from looking for work (to be counted as unemployed by the government, a person must be actively looking for work), but does count those who want to work full-time but can only find a part-time job. And "[t]he problem is ensnaring a broader swath of workers than before. Once concentrated among manufacturing workers and those with little work history, education or skills, long-term unemployment is growing most rapidly among white-collar and college-educated workers with long work experience."[52]


Bush's deficit-financed tax cuts have widened the income gap between millionaires and middle-class workers.Recently released data from the Internal Revenue Service indicates that the wealthiest one percent of Americans (with an average income of $1,316,000) earned 21.2 percent of all income while the bottom 50 percent earned only 12.8 percent of all income in 2005. A Wall Street Journal article entitled "Income-Inequality Gap Widens" observed that "[t]he richest Americans' share of national income has hit a postwar record, surpassing the highs reached in the 1990s bull market, and underlining the divergence of economic fortunes blamed for fueling anxiety among American workers."[53]


The Wall Street Journal has attributed the widening income gap to President Bush's tax policies: "[I]t appears that the highest-salaried workers - executives, managers and professionals - are widening their lead on the typical worker...The Bush tax cuts appear to have widened the income gap, according to many analyses."[54]The New York Times observed that IRS data "showed that over one-quarter of the investment tax cut savings went to just 11,433 taxpayers, (those who made $10 million or more) saving them almost $1.9 million each."[55]The Times also reported that a White House spokesman said that"the fact that nearly all of the growth in incomes was among those in the upper reaches of the income ladder and that the majority of investment tax breaks went to those making more than $1 million 'is not a very interesting story.'"[56]The St. Louis Post Dispatch summed it up: "The Bush tax cuts for the wealthy have thrown the federal budget deeper into deficit while doing little for ordinary Americans."[57]


In fact, President Bush's capital gains and dividends tax cuts will cost $2.349 trillion billion over ten years,[58]with most of the benefits going to the richest one percent of Americans.[59]In an analysis by the Tax Policy Center, economists found that the immediate effect of the Bush tax cuts has been "skewed in favor of those with high incomes," benefiting the most wealthy households the most.[60]In 2006, for example, "families making more than $1 million a year saw their after-tax income increase by 6 percent because of the tax cuts, while families making $40,000 to $75,000 saw after-tax income rise by about 2.5 percent."[61]


More American families and children face severe financial problems. In 2006, 36.5 million Americans were living in poverty,[62]an increase of 4.9 million over the 2000 level, the year before President Bush took office.[63]



The average annual increase in the poverty rate during President Bush's first term is second only to that during George H.W. Bush's administration and contrasts sharply with the declines in the Clinton and Kennedy-Johnson Administrations.[64]



Poverty has hit America's children particularly hard. According to the latest Census report, almost one out of every six American children lives in poverty.[65]The number of children living in poverty increased 10.06 percent during the Bush Administration.[66]


Middle-Class Families Squeezed By Record Levels of Debt


Bush Republicans turned record budget surpluses into record deficits. President Bush inherited a unified budget surplus of $236 billion from President Clinton, the largest surplus in American history.[67]Budget surpluses were expected to continue for another ten years when President Bush took office in January 2001.[68]By 2002, however, the unified federal budget had returned to a deficit of $160 billion and has since reached historic highs.[69]Last year, the budget deficit was $163 billion, or 1.2 percent of GDP.[70]


Bush Republicans, addicted to borrowing, increased the national debt by over $3 trillion. President Bush is the most fiscally irresponsible American president, having presided over the largest explosion of debt in our nation's history. Every year since taking office, President Bush requested that Congress increase the statutory debt limit, resulting in a $3.2 trillion, or 57 percent, increase.[71]At the end of 2007, the federal debt was $9.0 trillion,[72]or nearly $30,000 for every man, woman, and child in America.[73]The public debt currently stands at $9.4 trillion.[74]



Enormous trade deficit is undermining U.S. competitiveness.In 2007, the annual U.S. trade deficit was $708.5 billion - twice the size of the trade deficit in 2000, the year before George Bush took office.[75]For April 2008, the Commerce Department reported a monthly trade deficit of $60.9 billion - when George Bush took office in January 2001, the monthly trade deficit stood at $33.3 billion.[76]As troubling, our trade in Advanced Technology Products, a strong indicator of U.S. competitiveness, which was in surplus as recently as 2001, experienced an annual deficit of more than $53 billion in 2007, and a monthly deficit of $3.34 billion in February 2008.[77]


Debt owed to foreigners climbs to record levels. In order to finance record budget deficits, the United States has had to borrow at unprecedented rates from foreigners. As of September 2007, the United States had accumulated $1.4 trillion more in debt to foreigners than this country had accumulated in its first 224 years.[78]By contrast, during the last three years of the Clinton Administration, the United States paid off more than $200 billion in debt to foreigners.[79]



Record government and personal debt levels threaten economic future. Record federal deficits and debt create record interest costs for Americans. In 2006, interest costs on the federal debt amounted to $405.9 billion and this figure will grow to $645 billion by 2017.[80]Personal debt levels have also reached a modern record. The Washington Post noted that "[f]lat wages and rising debt nationally have converged to leave millions of middle-class households feeling acutely vulnerable to bumps in their financial planning."[81]According to the Federal Reserve, last year the ratio of financial obligations to disposable personal income reached an all-time high since the data was first collected in 1980.[82]The ratio, which accounts for mortgage, consumer, and other obligations, has remained high. In the fourth quarter of 2007, 19.35 percent of disposable income was spent on debt.[83]Meanwhile, "American consumers are holding debt in growing numbers and in larger amounts than ever,"[84]and "[m]ore Americans have fallen behind on consumer loans than any time in nearly 16 years ,as credit problems once concentrated in mortgages spread into other forms of debt."[85]


Average student loan debt soared to more than $19,000. Interest rates for Stafford student loans have risen substantially over the past three years, from 3.4 percent to 7.14 percent for outstanding loans and 6.8 percent on new loans.[86]As a result, loan payments will be considerably higher for students taking out new loans and for those who did not consolidate loans in recent years. Without adequate federal grants funding, students and their parents must rely more on student loans to finance their college educations. According to the Institute for College Access and Success, more than 60 percent of college seniors graduate with debt, with an average $19,200 in debt per graduate.[87]And, according to the Institute for Public Policy and Higher Education, 31 percent of the median family income is needed to pay for one year at a four-year public college after financial aid.[88]


Erosion of employer-provided pensions threatens Americans' retirement security.Workers' retirement planning once took place primarily within the context of the employment relationship: workers committed a certain number of years to the company and the company committed to providing retirement income. This is no longer the case. The movement from defined benefit to defined contribution plans has meant that workers are increasingly responsible for ensuring adequate income during their retirements - it has also meant that these workers solely bear the investment risks.


Workers should be able to count on retirement promises made by their employers. An analysis by the Pension Benefit Guaranty Corporation (PBGC), the federal entity created by Congress to protect employee pensions, determined that nearly ten percent of pension plans halted benefit accruals in 2003 alone, the latest year for which complete data is available. According to PBGC Executive Director Bradley Belt, anecdotal evidence suggests that this number has been even higher since then. A study by the Employee Benefit Research Institute (EBRI) found that, in the past two years, over one-third of surveyed companies froze their pensions and another one-third will be looking to close or freeze their pensions in the next two years.[89]EBRI showed that the percentage of workers who said they were "very confident about having enough money for retirement" decreased from 27 percent to 19 percent - the sharpest one-year drop in 18 years.[90]


Moreover, recent investor surveys and research indicates that there is a troubling racial disparity in the participation rates in 401(k) plans and retiree savings, suggesting that "the decline of pensions may disproportionately affect blacks" and other people of color.[91]One company found that "race was a more powerful predictor of an employee's retirement plan activity than age, gender, work experience or income."[92]This can also be true for blue-collar workers, who are at greater financial risk as a result of the shift in their retirement from defined benefit to defined contribution.


Even individuals who invest their retirement savings may not experience sufficient growth to retire comfortably. Someone who invested in a recommended 401(k) account indexed to the S&P 500 the day before President Bush was sworn into office in 2001 would have lost money (after accounting for inflation) if they withdrew those funds this month. The New York Times observed that "the simple price return [on the S&P 500] so far in this decade is the worst since the 1930s, when the Great Depression occurred. But the inflation-adjusted figure for total return is actually worse than the 1930s."[93]When adjusted for inflation,[94]the S&P 500 has actually declined by 15.57 percent between January 19, 2001 and June 17, 2008.[95]A columnist recently expressed concern that "...the most widely-watched domestic market benchmark [the S&P 500] is back below where it was in February 2000...Baby Boomers [who are] planning to dip soon into their life savings are quickly running out of time to recoup their losses."[96]The Los Angeles Times summed it up: "As Americans increasingly link their well-being to financial markets, the possibility of recession and a slump on Wall Street has taken on new meaning for the middle class, including baby boomers who are approaching retirement age."[97]The result? "[M]any aging Americans are delaying retirement, electing labor over leisure in uncertain times."[98]



[1]The average annual premium cost for family health coverage in 2007 is $12,106, compared with $7,063 in 2000. Kaiser Family Foundation, 2001 Employer Health Benefits Survey Report, available here; 2007 Employer Health Benefits Survey Report, available here.

[2]The Henry J. Kaiser Family Foundation and Health Research Education Trust, September 2007.


[4]The Henry J. Kaiser Family Foundation, August 2007.

[5]The Henry J. Kaiser Family Foundation and Health Research Education Trust, September 2007.

[6]Employee Benefit Research Institute, October 2007.


[8]U.S. Census Bureau, Income, Poverty, and Health Insurance Coverage in the United States: 2006 (August 2007), Figure 6, available here; U.S. Census Bureau, Health Insurance Coverage: 2001, Table B.3, availablehere.

[9]Kaiser Commission on Medicaid and the Uninsured, September 2007.

[10]Energy Information Administration, Petroleum Navigator, available here.

[11]Energy Information Administration,Household Vehicle Energy Use: Latest Data and Trends (2005), available here; Weekly Retail Gasoline and Diesel Prices (updated June 16, 2008), available here.

[12]Energy Information Administration, Spot Prices for Crude Oil (updated June 8, 2008), available here.

[13]Calculations based on data available from Energy Information Administration, Household Vehicle Energy Use: Latest Data and Trends; Short Term Energy Outlook (November 2007), available here, Household Vehicles Energy Use: Data Tables, Table A2 (released November 2005), available here.

[14]The College Board, Trends in College Pricing 2007, available here.


[16]Analysis of Department of Education data contained in U.S. Senate Committee on Health, Education, Labor, and Pensions, "A New Commitment to Students and Families: Opening the Door to College for All" at 2.

[17]Michael Grunwald, "The Housing Crisis Goes Suburban," Washington Post at B01 (August 27, 2006).

[18]Joint Center for Housing Studies of Harvard University, The State of the Nation's Housing 2007 at 19 (June 11, 2007), availablehere.

[19]National Association of Realtors, Housing Affordability Index data.

[20]Joint Center for Housing Studies of Harvard University, The State of the Nation's Housing 2007 (June 11, 2007) at 1, availablehere. Housing cost burdens measure the share of income devoted to housing, including rent or mortgage payments, utilities, property insurance, and property taxes. Traditionally, housing is considered affordable if it accounts for less than 30 percent of income. Housing cost burdens of between 30 and 50 percent are considered moderate, while those of 50 percent or more are severe." U.S. Department of Housing and Urban Development, The Homeownership Experience of Low-Income and Minority Families (February 2006) at 30, available here.

[21]Joint Center for Housing Studies of Harvard University, The State of the Nation's Housing 2007 (June 11, 2007) at 26, availablehere.

[22]Id.at 30.

[23]Les Christie, "Most Middle Class Still Can't Buy a House," CNNMoney.com (January 31, 2008), available here.

[24]See e.g. Joint Economic Committee, "Sheltering Neighborhoods from the Subprime Foreclosure Storm" (June 22, 2007), available here.

[25]Alex Veiga, Homes Facing Foreclosure More than Doubled in Q1, Associated Press (April 29, 2008).

[26] Alan Zibel, "Foreclosure Filings Continue to Rise Homeowners Need More Help, Critics Say" Washington Post; D03. (June 6, 2008).

[27] Pew Charitable Trusts ,Defaulting on the Dream (April 16, 2008), available here.

[28]Center for Responsible Lending, "Subprime Lending: A Net Drain on Homeownership," CRL Issue Paper No. 14 (March 2, 2007), available here.

[29]Rick Brooks and Ruth Simon, Subprime Debacle Traps Even Very Credit-Worthy, Wall Street Journal at A1 (December 3, 2007).

[30]"The fall in home prices has cut into Americans' home equity and forced many to grapple with mortgages now worth more than the house itself." Michael M. Grynbaum, Consumer Confidence Slips as Home Prices Drop, New York Times (April 29, 2008).

[31]U.S. Census Bureau, Income 2000, available here; Income, Poverty, and Health Insurance Coverage in the United States: 2006 (August 2007), Figure 1 (in 2007 dollars), available here.

[33]Peter Goodman, Workers Get Fewer Hours, Deepening the Downturn, New York Times(April 18, 2008).

[34]Joint Economic Committee analysis of Bureau of Labor Statistics (June 6, 2008), available here.

[35]U.S. Department of Labor, Bureau of Labor Statistics, Productivity and Costs, available here.

[36]Edward Teach, "A Productive Debate," CFO Magazine (December 31, 2006), available here.

[37]Editorial,"Economic Life After College," New York Times at A18 (June 11, 2007).

[38]Greg Ip, "Wages Fail to Keep Pace With Productivity Increases, Aggravating Income Inequality," Wall Street Journal at A2 (March 27, 2006).

[39]Ian Dew-Becker and Robert J. Gordon, Where Did the Productivity Growth Go? Inflation Dynamics and the Distribution of Income (December 2005) at 62, available here.

[40]Editorial,"Economic Life After College," New York Times at A18 (June 11, 2007).

[41]Molly Hennessy-Fiske, "That Raise Might Take 4 Years to Earn as Well: Those with bachelor's degrees are finding their incomes stagnate despite a growing economy," Los Angeles Times at A1 (July 24, 2006).

[42]AP, "College degree may not be enough to protect against poverty" (April 29, 2007).

[43]U.S. Department of Labor, Bureau of Labor Statistics, Employment, Hours, and Earnings from the Current Employment Statistics survey (National), Table B-1. Employees on nonfarm payrolls by industry sector and selected industry detail (preliminary) (June 6, 2008), available here.

[44]Id. See also Editorial, "Job Figures in Context," Washington Times (July 23, 2007), available here.

[45]See e.g., Speech of Gary H. Stern,President, Federal Reserve Bank of Minneapolis, Perspectives on the Economy (March 29, 2007), available here.

[46]U.S. Department of Labor, Bureau of Labor Statistics, Employment, Hours, and Earnings from the Current Employment Statistics survey (National), Table B-1. Employees on nonfarm payrolls by industry sector and selected industry detail (preliminary) (May 2, 2008), available here.

[47]Id. See also Editorial, "Job Figures in Context," Washington Times (July 23, 2007), available here.

[48]U.S. Department of Labor, Bureau of Labor Statistics, Industry at a Glance, available here.


[50]Conor Dougherty, "How Job Report May Be Masking Labor Pains," Wall Street Journal at C1 (September 7, 2007).

[51]U.S. Department of Labor, Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey, Table A-12, available here.

[52]Michael A. Fletcher, "Highly Skilled and Out of Work: Long-Term Joblessness Spreads in Middle Class," Washington Post at A01 (January 21, 2008).

[53]Greg Ip, "Income-Inequality Gap Widens," Wall Street Journal(October 12, 2007).

[54]Greg Ip, "Wages Fail to Keep Pace With Productivity Increases, Aggravating Income Inequality," Wall Street Journal at A.2 (March 27, 2006).

[55]David Cay Johnson, "2005 Incomes, on Average, Still Below 2000 Peak," New York Times(August 21, 2007).


[57]St. Louis Post Dispatch, "Falling Behind Dad" (May 30, 2007).

[58]Citizens for Tax Justice, The Bush Tax Cuts: The Latest CTJ Data (March 2007) at 2, available here.

[59]Id. [based on income group].

[60]Greg Leiserson and Jeffrey Rohaly, "The Distribution of the 2001-2006 Tax Cuts: Updated Projections, November 2006," The Tax Policy Center (November 15, 2006), available here.

[61]Michael Abramowitz and Lori Montgomery, "Bush Addresses Income Inequality," The Washington Post at A04 (February 1, 2007), citing "The Distribution of the 2001-2006 Tax Cuts: Updated Projections," supra.


[63]U.S. Census Bureau, CPS 2000 Annual Social and Economic Supplement, POV01 (December 11, 2001), available here.

[64]Joint Economic Committee analysis of data maintained by the Bureau of the Census and U.S. Department of Commerce from 1959-1995.

[65]U.S. Census Bureau, Income, Poverty, and Health Insurance Coverage in the United States: 2006 (August 2007), available here.

[66]U.S. Census Bureau, CPS 2000 Annual Social and Economic Supplement, POV02 (December 11, 2001), available here.

[67]President Bush's Budget for Fiscal Year 2002, A Blueprint for New Beginnings at 201(February 28, 2001), available here.

[68]Id.at 7.

[69]Office of Management and Budget, Budget of the United States Government, FY2009 Historical Tables (February 4, 2008) available here.

[70]Joint Statement of the Department of Treasury and Office of Management and Budget on Budget Results for Fiscal Year 2007 (October 11, 2007), available here.

[71]Philip D. Winters, "The Debt Limit: The Ongoing Need for Increases," Congressional Research Service Pub. No. RL31967 (updated March 21, 2006).

[72]President's Budget; U.S. Department of the Treasury, "The Debt to the Penny and Who Holds It," available here.

[73]Associated Press, "U.S. debt: $30,000 per American" (December 3, 2007), available here; U.S. Department of Treasury, The Debt to the Penny and Who Holds It, available here.

[74]President's Budget; U.S. Department of the Treasury, "The Debt to the Penny and Who Holds It," (updated April 25, 2008) available here.

[75]U.S. Department of Commerce, Bureau of Economic Analysis, U.S. International Trade in Goods and Services Foreign Trade Statistics, U.S. Trade in Goods and Services - Balance of Payments (BOP) Basis, available here.

[76]U.S. Department of Commerce, Bureau of the Census and the Bureau of Economic Analysis, U.S. International Trade in Goods and Services: January 2008 (March 11, 2008), available here and U.S. International Trade in Goods and Services: January 2001 (March 20, 2001), available here.

[77]U.S. Census Bureau, Foreign Trade Statistics, Advanced Technology Product Data, available here.

[78]U.S. Department of Treasury, Major Foreign Holders of Treasury Securities (updated January 16, 2008), available here and here.


[80]Congressional Budget Office (August 2007).

[81]Jeffrey H.Birnbaum and Chris Cillizza, "'Mortgage Moms' May Star in Midterm Vote; With Wages Stagnant and Debt Growing, Democrats See an Opportunity," Washington Post at A01 (September 5, 2006).

[82]The Federal Reserve, Household Debt Service and Financial Obligations Ratios (updated March 11, 2008), available here.


[84]Increasing consumer Debt Level Raises Bankruptcy Filings, St. Louis Fed Reports, BNA Daily Report for Executives (April 9, 2008).

[85]Jonathan Stempel, Late Payments on Consumer Loans at 16-year high, USA Today (April 3, 2008).

[86]David P. Smole, "Stafford Loan Interest Rate Reduction: Background and Issues," Congressional Research Service Pub. No. RS22568 (July 20, 2007).

[87]The Institute for College Access and Success (2006), based on an analysis of data from the Department of Education, National Postsecondary Student Aid Study (2004) cited in "A New Commitment to Students and Families: Opening the Door to College for All" prepared by the U.S. Senate Committee on Health, Education, Labor, & Pensions (July 2007) at 12.

[88]The Institute for Public Policy and Higher Education, Measuring Up 2006: The National Report Card on Higher Education cited in "A New Commitment to Students and Families: Opening the Door to College for All" prepared by the U.S. Senate Committee on Health, Education, Labor, & Pensions (July 2007) at 11.

[89]Jack VanDerhei, Retirement Income Adequacy after PPA and FAS 158: Part One - Plan Sponsors' Reactions, Employee Benefit Research Institute (July 2007), available here.

[90]Nancy Trejos, Bleaker Hopes for a Good Retirement, Washington Post at D01 (April 8, 2008).

[91]Daniel Sorid, "Blacks Retirement Security at Risk," AP (October 11):


•"Exelon Corp., the country's largest operator of nuclear power plants, discovered this year that about 15 out of every 100 black employees did not participate in its 401(k) plan, compared with around 10 of every 100 whites. It also found that one in three black employees contributed less than 5 percent of their pay to the plan, compared to just 14 percent of whites."

•"A survey by Charles Schwab Corp. and Ariel Mutual Funds concludes that four in 10 African Americans with household incomes of $50,000 or more have no money in stocks, compared to just one quarter of whites."

•"Ariel's survey also found blacks who enrolled in retirement plans save a median $173 a month while whites save $252."

•"A separate survey of retirees found whites are nearly twice as likely to have $100,000 or more saved than blacks, even when education, peak income level and other factors are held constant."



[93]Floyd Norris, Not the Decade to Shopping with a Wallet Full of Stocks, New York Times(September 8, 2007).

[94]U.S. Department of Labor, Bureau of Labor Statistics, CPI Inflation Calculator, available here.

[95]The closing price of the S&P 500 on January 19, 2001 was $1,342.54, or $1,600.13 in 2008 dollars. On June 17, 2008, the price close was $1,350.93. See Yahoo! Finance, S&P 500 Index, Historical Prices, available here.

[96]Mike Ivey, "Not watching is best market advice," The Capital Times (January 22, 2008), available here.

[97]Jonathan Peterson and Walter Hamilton, "High anxiety for 401(k) investors," Los Angeles Times(January 30, 2008), available here.

[98]Jennifer Levitz, Americans Delay Retirement as Housing, Stocks Swoon, Wall Street Journail (April 1, 2008).





  • Erika Moritsugu (224-3232)


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