Bush administration policies are threatening the nation's economic future 

Many eyes were on the U.S. Department of Labor in early January for the latest reading on jobs and the economy. There was a lot riding on the December employment numbers - the Bush administration had pushed through a massive $750 billion tax cut bill in 2003, largely on White House promises that the cuts would add more than a half-million jobs by year's end (510,000 jobs, to be exact) and another 1.4 million jobs by the end of 2004. The Labor Department's year-end figures provided a benchmark (call it "adequate yearly progress" for the economy) for gauging how well the administration's promises lived up to the lobbying hype behind yet another massive tax cut.

The good news was that the Labor Department was able to report job gains in December: an anemic jump of 1,000 jobs nationwide. The bad news was that the administration's 2003 job-growth-through-tax-cuts projections came up short - 306,000 jobs short.

Job growth never reached even a third of the promised rate, the Economic Policy Institute reports. And if you took the administration's promise as meaning there would be more jobs at year's end than when the tax cut bill was pushed through in July 2003, then we're more than 1.8 million jobs off the mark set by the White House, EPI observes.

"The grim facts of the economic recovery - continued joblessness and rising healthcare costs in particular - cast a long shadow," notes a new AFT report, Another Long Winter: The State Fiscal Crisis in Its Third Year. "They mean that demand for public services will continue to rise and states will have diminished resources to meet them. Moreover, the Bush administration's inefficient efforts to stimulate the economy, by borrowing in order to fund tax breaks for the wealthiest among us, threaten both our fiscal and economic future.

"The likely result is further pain for state and local government."
 

CUTTING 'TIL IT HURTS

That pain is manifest in hundreds of ways, say AFT members: in their work lives, in the family pocketbook and in the lives of the people they serve.

The University of Illinois has cut hundreds of faculty and administrative staff positions to deal with a 14 percent (or $131.5 million) budget cut over the 2002-04 funding period. At the same time, the university's enrollment on three campuses and online has swollen by 70,000 students. While the system this year used a 5 percent tuition increase to help close the revenue gap, even the undergraduates complain that 5 percent is not enough. In a survey last spring, the majority supported an 8 percent increase if the extra money could go directly into instruction - especially into retaining good faculty and not cutting back on discussion sections associated with lectures. Instead, they're paying more tuition but getting less for their money: 800 classes have been eliminated, classes are more crowded and less help is available from faculty.

The university cut 200 teaching assistants in September, according to the Graduate Employees Organization/AFT, which is in the midst of bargaining a first contract for the 2,500 graduate employees it represents on the Champaign-Urbana campus. Some of the remaining positions have been scaled back to grading assistants, who receive 30 percent appointments as opposed to the 50 percent appointments of teaching assistants.

The result, says GEO staffer Sanjay Garla, is that departments are "restructuring the way they conduct teaching," a trend that many worry will become permanent.

For example, Julilly Kohler-Hausmann is a first-year grading assistant in the history department. She has no direct contact with the 120 students whose seven- to eight-page papers she grades.

She ticks off what's missing in this relationship: no opportunity to review the lecture's important points, to answer questions, to discuss in small groups - to help students learn.

"For me, that is the biggest tragedy," she says. "As a grader, I can't tell the difference between a student who is struggling but is too shy or intimidated to ask questions and the one who is blowing off the class. You give different considerations to students based on where they are coming from."

Hurting students is one issue. Erosion of essential benefits is another. GEO member Mary Holbrock has seen the medicine she relies on to manage a chronic health condition disappear from her health coverage as the price has gone up. New prescriptions require readjustments and can cause side effects that interfere with her work, says the applied linguistics doctoral candidate. She has gone so far as to haunt city clinics in search of samples, or to buy her medications in Canada. She is hoping a contract settlement will address the issue.

The University of Wisconsin system has had to deal with a $250 million reduction in state support during the 2003-05 biennium. Large tuition hikes (18 percent in the first year, 15 percent in the second) have closed $150 million of the gap. Still, Kathy Lynn Rohde, a second-year master's student studying unions and collective bargaining, was shocked to discover that her program has been discontinued. The Teaching Assistants Association/AFT member is enrolled in the Industrial Relations Research Institute. Founded in 1947 and one of the oldest programs of its kind in the country, the institute has seen its budget cut to zero. Rohde is guaranteed to finish her degree, but Ph.D. candidates have been told they need to finish elsewhere, she says.
 

PUSHING ON A STRING

Trying to spark an economic recovery through tax cuts is a little like shoveling with a rake or pushing on a string. It's a lot of effort with very little return. Undoubtedly, tax cuts can fatten the bottom lines of corporations - in the past quarter, many companies reported record profit growth even though they did virtually nothing to ramp up business or hire new workers. And tax cuts also can be a tremendous windfall for people who really didn't need the extra cash and have no intention of using it to buy more goods and services.

"A lot of the tax cuts for the wealthiest just went to overseas investments and vacations in Bimini. And some of it is under the mattress, doing nothing to boost the recovery," explains Ed Muir assistant director of AFT research and information services and co-author of Another Long Winter. "Money that would otherwise be spent on improving schools, building roads or other investments that give a big bang for the buck when it comes to jump-starting the economy is sitting in a bank. Or the pickup is very narrow," Muir explains. "A telling sign is that Christmas sales at Tiffany's were up but at stores like Sears, where most of us shop, they were down. We needed a stimulus for all Americans."

That doesn't mean that tax cuts don't matter - quite the contrary. As Another Long Winter illustrates, this massive transfer of wealth has a direct impact on the ability of government at all levels to do its job. "Policies set in Washington, D.C., have hindered overall economic recovery, hamstrung states' abilities to collect adequate revenue, jeopardized federal support for state services, and placed additional burdens on state and local government.

"In every part of the fiscal crisis examined [in the report], there is either something the federal government has done to exacerbate the situation, or something it has failed to do to ameliorate it."

The National Conference of State Legislatures estimates that unfunded mandates in three major categories are costing states and localities somewhere between $23 billion and $82 billion a year. The categories are education - both special education and the No Child Left Behind Act - election reform and homeland security.

Massachusetts provides a good illustration. The state has struggled to meet rising demand for healthcare, economic assistance and public services in a punk economy, while at the same time meet new mandates out of Washington, such as homeland security and provisions in the No Child Left Behind law. At the same time, federal tax changes have meant a potential revenue loss of $846 million for the state.

These budget pressures prompted Gov. Mitt Romney in late 2002 to cut $12 million from an early literacy program, $10 million in school readiness funding and $3 million from school breakfast programs. For the 2004 fiscal year, $150 million was axed in basic state aid to school districts, along with funding for nutrition, early literacy and kindergarten.

Another casualty was a program to help struggling students pass the state's high school exam, which suffered a $40 million cut in the fiscal 2004 year - a major hit to a program that has helped boost exam pass rates as well as helping 23 percent more Massachusetts students meet proficient or advanced standards in English since 1998.

"Cutting the programs that helped obtain these results when the federal government is increasing the stakes and the scrutiny for school performance seems self-defeating," Another Long Winter observes.

Students who do set their sights on college find their state university system is both costly and diminished in quality. The state has cut higher education by $109 million since 2001 and there is talk about a slash of $150 million next year. Meanwhile, the cost of tuition and fees has soared while financial aid has declined. Retiring faculty are not replaced, average class size has exploded and hundreds of courses have been canceled.

As a report of the Massachusetts Taxpayers Foundation recently pointed out, where higher education made up 6.5 percent of the state budget in 1988, now it is just 3.5 percent. The state invests more in its prison system than in its public higher education system. For the current year, it budgeted $830 million to house a daily average prison population of 22,000, but budgeted only $816 million to educate the 175,000 students in state colleges.

California is another state where federal policies are wreaking havoc with the state budget. The total of lost revenue due to federal tax changes, Muir estimates, is $1.3 billion in 2004. The state is facing a $14 billion deficit and an economy clunking toward recovery. A deficit for 2005 seems likely.

In December, the new governor released a budget that was mostly bad news for lower- and middle-income families in the state, but threw a bone to the colleges.

The governor's proposal cuts both the University of California system and the California State University system, but provides a 4.4 percent increase to the community colleges of $211 million. UC would be cut by 8 percent, or $372 million; CSU would suffer a 9 percent - or $240 million - cut. Part of the rationale for the community college increase was to help the colleges deal with the spillover that will occur due to tuition increases.

What those working in the community colleges have observed, however, is that tuition increases result in thousands turning away from any postsecondary education. Last year, the California community college budget was cut by 1.7 percent and the colleges increased their fees from $9 to $18 per credit hour. The colleges lost about 90,000 students, says the California Federation of Teachers, and another 65,000 students who had been expected to enroll did not show up. Gov. Arnold Schwarzenegger would bump the college tuition again, to $26 per credit hour, a 44 percent increase.

In addition to the direct impact of tuition increases on students, the state education budget cuts have taken a toll on those who work in the system. In December, the San Francisco Community College District Federation of Teachers held forums to let faculty voice their concerns about the effect of the cuts on working conditions and educational quality, says local president Allan Fisher. Faculty testified that larger classes, reductions in supplies and access to equipment, and increased workload associated with fewer full-time faculty doing the work of the departments have sapped morale and intensified stress.

Faculty also worry about what's happening to the students the colleges are designed to serve. Says Mona Field, a political science professor at Glendale Community College, "I have extra-large classes, and many students seem genuinely concerned about being able to complete their two-year transfer program in anything remotely resembling that time span." In fact, she adds, "the real issue is how many we have to turn away who can't get the classes and whose progress is being severely delayed by the class cutbacks."

In every sector of education, the California Federation of Teachers is fighting against losing ground. "California schools are laying off faculty and staff, increasing class sizes and reducing access to higher education," says CFT President Mary Bergan. "California's high standards and curriculum, and materials tied to those standards, were beginning to show results. Cuts in funding now threaten to undo that progress. We are concerned about the budget's potential impact on other state programs, and would prefer that California ease its budget crisis by increasing revenues instead."

Another Long Winter: The State Fiscal Crisis in its Third Year  is available as a PDF file online at www.aft.org/pubs-reports/pubemps/AnotherLongWinter.pdf.