Online NewsHour Vote 2004 | Issues


	President Bush has pledged to spur job growth by speeding up his tax cuts passed by Congress in 2001 and by offering companies tax incentives to expand their payrolls. The centerpiece of the president's job plan is the Jobs and Growth Act of 2003 that took effect in July 2003. The Bush campaign Web site says that the Jobs and Growth Act encourages "job-creating investment in America's businesses by providing dividend and capital gains tax relief." The act also provides incentives for small businesses to add to their payrolls by increasing the tax expense limit from $25,000 to $100,000. "This law reflects a common sense economic principle: The best way to have more jobs is to help the people who create new jobs, and those are the small business owners of America," the president said upon signing the tax relief package. The president hailed his tax cuts for helping expand the U.S. job market, noting the progress made despite the 2001 economic recession, corporate scandals, the Sept. 11 terror attacks, and the wars in Iraq and Afghanistan. With the economy growing at its fastest clip in 20 years, 1.4 million jobs were created in the past nine months, according the Bush campaign Web site. The Bush campaign also points out the "notable recovery" in the manufacturing sector, with a reported 91,000 new jobs since January. "The tax relief we passed is working. ... This economy is strong, it is getting stronger," President Bush told an audience at Marshall Community and Technical College in Huntington, W.Va. on April 2. The president is urging Congress to make the tax cuts permanent. On top of tax credits aimed at job growth, President Bush in April announced his plan to revamp the nation's federal job training programs. The president said his proposal would double the number of workers undergoing federally funded job training -- from 200,000 to 400,000 -- by giving states more control, so governors could distribute funds to programs "which actually are training people" for "jobs which exist." Mr. Bush also plans to increase funding to community colleges, where most of the job training takes place. As part of the job training overhaul, President Bush would create "innovation training accounts" to provide job training money directly to individuals who meet eligibility requirements. Additionally, the president has called on Congress to pass legislation to limit malpractice lawsuits, which he says compels companies to move jobs overseas with less stringent malpractice laws. At the same time, President Bush vows to open foreign markets to more U.S. products and services and to create more level trading conditions. Opening foreign markets for U.S. exports will help promote job creation in industries, including those hurt by outsourcing, according to the White House Web site. The president in March 2004 underscored this policy, saying: "economic isolationism is bad economic policy, and it will cost people jobs." To bolster job growth, Mr. Bush proposes: - making tax cuts of his 2003 Jobs and Growth Act permanent; - reforming tort laws to limit corporate liability and unwarranted malpractice lawsuits; and - overhauling and modernizing federal jobs-training programs so U.S. workers can better compete against foreign labor markets.



	Bush 2004: The President's Economic Security Agenda

	The White House: Jobs & Economic Growth


	Sen. John Kerry, D-Mass., has pledged to create 10 million new jobs in the United States in his first term as president, and to restore the 3 million jobs that he says were lost under the Bush administration in the first 500 days of his administration. "America cannot afford four more years of a president who is the first to lose jobs since Herbert Hoover in the Great Depression," Kerry said at a March 26 rally in Detroit. The centerpiece of Kerry's job growth plan involves his New Jobs Tax Credit. This tax reform calls for eliminating tax breaks for businesses to relocate U.S. jobs to foreign countries, and lowering taxes for 99 percent of businesses to promote domestic job creation. Kerry proposes to end tax benefits that he says encourages outsourcing and rewards U.S. companies for moving jobs overseas. The approximate $12 billion in savings from ending those tax cuts would be reinvested into incentives for businesses to create new jobs within the United States, according to Kerry's economic plan. "I will invest the savings from reform in new incentives to create new, good paying jobs here and to lower corporate taxes by 5 percent to make all our companies more competitive," Kerry said April 7. Kerry says the outsourced high-wage jobs have been replaced by more lower-paying and low-skilled jobs at home. In a June 15 speech in New Jersey, Kerry emphasized the job growth shift to lower-wage jobs during the Bush administration, pledging to improve living standards for the middle class. Kerry also seeks to promote job creation among small businesses through similar tax credits, as well as credits to cover employers' payroll tax costs for new hires. Saying the skyrocketing costs of health insurance has slowed the pace of hiring full-time employees, Kerry says he would reduce costs of health premiums for U.S. businesses and give tax relief to companies offering their employees "quality health care coverage." To boost job growth, Kerry has proposed: - eliminating corporate tax breaks that encourage companies to hire low cost overseas firms and workers to perform jobs previously held by Americans; - creating a New Jobs Tax Credit paid for by a "one-year tax holiday to help companies reinvest their foreign earnings in the U.S." The tax credit would cover small businesses as well as all new jobs in manufacturing, software, service and other industries hurt by outsourcing; and - creating a College Opportunity Tax Credit to help make higher education more affordable to all Americans. The plan calls for a tax credit for every year of college on the first $4,000 of tuition. As part of Kerry's job growth plan, this education tax credit will "help America's workforce gain skills for the jobs of the future."



	Kerry 2004: Restoring Jobs & Rebuilding Our Economy

	Vote by Issue Democratic Primary Quiz: John Kerry on the Issues

Jobs have become a major issue on the 2004 campaign trail, with both Kerry and Bush drawing on selective economic data to champion their job growth plan.

While the Bush administration is heralding the fastest economic growth rates in 20 years, marked by new jobs and rising consumer spending, Kerry has focused on net losses of quality jobs during the last four years.

A 'Jobless' Recovery
Although unemployment has risen overall during the last three years of the Bush administration, the economy has added a net 1.2 million jobs this year so far, according to the Bureau of Labor Statistics -- of those 1.2 million jobs, nearly 250,000 represent full-time payroll positions.

Though the economic recovery officially began in the fall of 2001, the job market has lagged behind. For instance, employment growth in August 2003 was the lowest for a recovery since the government started keeping such statistics in 1939.
These trends illustrate the economy's "jobless recovery," a term describing a pattern in which businesses do not hire new workers despite improving productivity levels.

Until 2004, the unemployment rate during the Bush administration has gradually risen from a low of 4.2 percent in January 2001 and hovered around 5.8 percent through much of 2002, according to BLS data. During the first three years of the Bush administration, the nation lost almost 1.9 million jobs, based on annual averages compiled by the U.S. Bureau of Labor Statistics.

The unemployment rate peaked to 6.3 percent in June 2003, marking its highest level since 1994, during the administration of Pres. George H.W. Bush.
But, more recent economic data suggests job growth is picking up pace, with eight consecutive months of employment increases since May.

At the same time, however, these job gains have been relatively small for an economic recovery, and the unemployment rate in May has basically remained constant over the previous four months at rates of 5.7 percent and 5.6 percent.

Outsourcing
Both candidates are aggressively campaigning in states -- such as Ohio, Illinois, Michigan and Pennsylvania -- where blue-collar industries, notably the manufacturing sector, have been hit hardest by outsourcing of jobs to foreign nations.

Of the 2.5 million net jobs lost since the recession officially began in March 2001, 2 million of them have been in manufacturing, according to a June 23, 2003 NewsHour report.

In the last year, however, the manufacturing unemployment rate has improved, falling from its average 6.5 percent in May 2003 to an average of 5.6 percent in May 2004.

Despite such recent data showing job expansion, the AFL-CIO federation of labor unions in February endorsed Kerry, urging their 13 million members to vote for the Massachusetts senator.

As of June, the AFL-CIO earmarked a record $44 million on get-out-the-vote efforts to defeat President Bush, concentrating on 17 battleground states.




	U.S. Bureau of Labor Statistics

	The Bureau of Labor Statistics is the principal fact-finding agency for the Federal Government in the broad field of labor economics and statistics. The BLS Web site tracks key labor and economic indicators such as the unemployment rate and the Consumer Price Index

Employment has consistently ranked as a major concern of American voters, and in recent elections not being aggressive enough on this issue has been fatal for candidates.
Many pundits compare the economic challenges facing President Bush to those his father, Pres. George H.W. Bush, confronted in the 1992 election.

Amid the 1990-91 economic recession, Pres. George H.W. Bush was saddled with a steadily rising unemployment rate throughout his administration, peaking to 7.8 percent in July 1992 from the 5.5 percent average when he entered office in 1988.

Economists from the Labor Department often refer to that period as a "jobless recession," since other economic indicators, such as productivity, picked up in 1992 while the labor market continued to deteriorate.

That year, Pres. George H.W. Bush lost to Democrat presidential candidate Bill Clinton, who summed up his campaign message succinctly: "It's the economy, stupid."

During President Clinton's two terms in the White House, the country experienced unprecedented job growth, thanks in part to the booming high-tech, Internet and other service industries.

In time for the next election, the average unemployment rate had dropped from 6.1 percent in 1994 to 5.4 percent in 1996. Clinton won a second term, with exit polls suggesting the robust economy played a big role in his reelection.

By the time Mr. Clinton left office in January 2001, unemployment had dipped as low as 3.9 percent. But even as the final days of Mr. Clinton's term dwindled, economic problems appeared on the horizon.

A few months into Pres. George W. Bush's term, the exuberant growth began to shift downward and employment began slipping. The nation's slowing economy then took a tailspin with the sudden collapse of the overpriced Internet and high technology stocks, the continued decline of the manufacturing sector, and the Sept. 11 terrorist attacks.

Additionally, America's service companies -- notably in the high-tech industry -- increasingly began to outsource jobs to foreign countries.
While "offshoring" has affected blue-collar workers in America's factories for years, the trend has been magnified during this presidential election year with the recent exodus of white-collar jobs, particularly in the services and the high-tech sectors.

Forrester Research in May estimated that 3.4 million white-collar service jobs, representing $136 billion in wages, will move abroad in the next 11 years.
But many economists, including Federal Reserve Chairman Alan Greenspan, and business organizations argue outsourcing is actually healthy for the U.S. economy and will help generate new jobs at home. Greenspan, among other economists, have cautioned against trying to interfere against outsourcing U.S. jobs to countries where wages are lower.

Greenspan on March 11 described "a new round of protectionist steps being proposed" as "alleged cures [that] would make matters worse rather than better. They would do little to create jobs; and if foreigners were to retaliate, we would surely lose jobs."

-- By Liz Harper, Online NewsHour




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