WHEREAS:

Over the last three and one-half years the Reagan Administration has succeeded in implementing a disastrous economic program composed of:

• Excessive and unfair tax cuts,
• A sharp increase in military spending,
• Major cutbacks in human service programs, and
• Excessive reliance on monetary policy; and

WHEREAS:

The tax program of the Reagan Administration is highly inequitable, favoring the rich over the poor, big corporations over small business. Under President Reagan's personal income tax cut, a household earning $80,000 or over will get an average tax break of $9,430 by 1985, while those earning $10,000 to $20,000 will have gained only $320 — an amount that has largely been offset by higher Social Security taxes and increased state and local taxes and user fees that have been enacted to compensate for reduced federal funding for state and local services. The business tax cut is no better, The largest 1700 (or 0.2%) of the businesses in America are getting over 80 percent of the gains from Reagan's Accelerated Cost Recovery System (ACRS) business tax cut. ACRS has done little or nothing to boost investment, but it allowed corporations in 1983 to deduct $31 billion more from their taxes than would have been justified by the economic depreciation of assets; and

WHEREAS:

The Administration's tax program has undermined the federal revenue base, The loss of federal tax revenue from policy changes made by this Administration has risen from $40 billion in FY1982 to $111 billion in 1985 to a projected $215 billion in FY1989; and

WHEREAS:

President Reagan's Fiscal Year 1985 budget will bring military spending increases to 115 percent; he has more than doubled the defense budget since he took office. Over that period, military costs have increased 60 percent in inflation-adjusted dollars. If Reagan's policies continue, defense expenditures will increase another 25 percent in inflation-adjusted dollars between 1985 and 1989. This rapid military buildup will inevitably produce large cost overruns and unnecessarily high inflation in procurement costs. It will also drain capital investment and engineering talent from non-defense industries, such as auto and steel, which badly need to modernize. Excessive defense expenditures are self defeating; they weaken our nation's economy — the bedrock on which any effective national defense must rest; and

WHEREAS:

The massive military buildup, as well as the tax cuts, have come at the expense of critical domestic programs. Under pressure from the Administration, the Congress has cut federal spending on social programs by a cumulative $59 billion through 1984, and the Administration's FY1985 budget would bring that total to an $88 billion loss from pre-Reagan funding levels. The big funding cuts for key programs like education, CETA, AFDC, Food Stamps, Mass Transit, Medicaid, Medicare, and Social Security threaten the well-being of millions of Americans. Despite Reagan's campaign promise of equitable across-the-board cuts, the poor and the elderly are the principal victims of this attack on the network of social welfare programs that have been established over the last fifty years; and

WHEREAS:

The Administration's excessive reliance on monetary policy-restraint in the rate of growth of the money supply-as the primary tool to curb inflation, combined with unprecedented federal borrowing to finance the huge deficit engendered by the tax cut and military spending, has kept interest rates at unreasonably and unnecessarily high levels. The high interest rates:

• impede borrowing by the private sector for economic expansion,
• hold down consumer demand for housing, automobiles and other durable goods,
• threaten the solvency of small businesses, and
• maintain the value of the dollar at levels that choke off exports and encourage a flood of imported goods; and

WHEREAS:

As AFSCME predicted would happen, the Administration's misguided policies grounded the U.S. economy on the shoals of high interest rates and widespread unemployment. The recovery has been uneven, and has failed to address many basic problems caused by the recession. The continuation of the Reaganomics policies of unfair tax cuts, accelerating defense spending, huge deficits, high interest rates and inadequate social spending threatens to plunge the economy back into recession in the near future.

WHEREAS:

Reaganomics had totally ignored, and in most cases worsened, the critical structural problems of our economy. These include growing structural unemployment, in which larger and larger proportions of the population have no hope for a decent, stable job, structural industry changes, which have wiped out a large portion of mid-skill, mid-wage jobs, and structural poverty, in which growing proportions of the population are falling below the poverty level.

THEREFORE BE IT RESOLVED:

That AFSCME recognize and expose Reaganomics as an unfair and ineffectual way of dealing with the problems of inflation and unemployment. AFSCME will continue to fight to reverse this Administration's economic policies.

BE IT FURTHER RESOLVED:

That AFSCME believes that the U.S. can and must immediately start to move towards the Humphrey-Hawkins Act goals of full-employment with price stability. Towards this end, we support:

• Implementation of a comprehensive overhaul of the federal tax system to close the loopholes which allow corporations and wealthy individuals to avoid paying their fair share of the tax burden. The Bradley-Gephardt Fair Tax Act is an important step in this direction.
• Lower interest rates, with direction of credit towards productive investments rather than speculation and corporate mergers.
• A reversal of the recent spending cuts, together with new funding for essential federal initiatives such as welfare reform, national health insurance, job-creation, and development of the nation's public infrastructure.
• The implementation of an effective and multi-faceted anti-inflation program. This would include initiatives to restrain price increases in the necessities — food, energy, health care, and housing — as well as a standby comprehensive mandatory policy covering prices, profits and interest rates.
• Reductions in the military budget with guaranteed retraining for those workers affected by the reduction.

SUBMITTED BY:

International Executive Board

Carolyn Samson, President
Norman Snyder, Secretary
Local 707, Council 14
St. Paul, Minnesota