Economy Archive
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Chad Stone, Chief Economist, on November Employment Report
December 5, 2008
Today’s devastating jobs report confirms that the economy is in a serious recession. Good policy in the months ahead is vital to limit the damage, but even so this recession is likely to be the longest, and possibly one of the deepest, since World War II. Today’s report also … -
Recession Could Cause Large Increases in Poverty and Push Millions into Deep Poverty
November 24, 2008
[T]he current downturn is likely to cause significant increases both in the number of Americans who are poor and the number living in "deep poverty," with incomes below half of the poverty line...There are a series of steps that federal and state policymakers could take to soften the recession’s harshest impacts and limit the extent of the increases in deep poverty, destitution, and homelessness.
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Podcast: How Will the Economic Downturn Affect Poverty? Can Today's Safety Net Cope?
November 24, 2008
This podcast discusses the findings of an analysis, which: examines the impact of recent recessions on poverty and deep poverty (incomes below half of the poverty line); discusses recent changes in the safety net that could weaken its ability to address the increase in need during this downturn; and outlines steps Congress can take as part of an upcoming economic recovery … -
State Revenues Plummet
Updated November 12, 2008
Newly available data compiled by the Rockefeller Institute of Government show conclusively that state revenue dropped sharply in the July-September 2008 quarter, creating large, additional state budget shortfalls.[1] All indications are that revenue collections will worsen further in coming months. Of the 42 states for which … -
Statement by Chad Stone, Chief Economist, on the October Employment Report
November 7, 2008
The weakness in the economy showed up with a vengeance in today’s employment report. As unemployment continues to rise, the percentage of Americans with a job is at its lowest level since 1993 and more than one in five of the unemployed has been looking for work for at least 27 weeks. … -
Video: Testimony of Iris J. Lav on "Economic Recovery: Options and Challenges"
October 20, 2008
Hearing Titled: “Economic Recovery: Options and Challenges” There are 29 states that closed shortfalls of $48 billion in enacting their fiscal year 2009 budgets (for the year beginning July 1, 2008 in most states). The shortfalls equaled 9 percent of these states’ general fund (operating) budgets. Since fiscal year 2009 budgets … -
Video: Nicholas Johnson, Director of the Center's State Fiscal Project, speaks about state budget problems, and answers questions from call-ins on C-SPAN's Washington Journal Program
October 18, 2008
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Job Growth Has Slowed Significantly in 2006
Revised October 13, 2008
New Labor Department data released today show that employment growth slowed markedly in September, providing further evidence that the labor market has weakened in 2006. Looking at this year to date, two key findings emerge. Average job growth in 2006 has been notably slower than in either 2005 or 2004. Employment has grown at an average annual … -
Video: Chad Stone, Chief Economist, on Economic Stimulus, Fox 5 News DC
October 13, 2008
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States Face Two Immediate Financial Issues: Short-Term Borrowing and Big Budget Deficits
Updated October 10, 2008
States face two distinct financial problems right now. First, California and Massachusetts officials last week raised concerns about their states’ ability to access credit markets for short-term borrowing. Second, most states have been facing budget deficits that have forced, or … -
Statement by Chad Stone, Chief Economist, on the September Employment Report
October 3, 2008
Today’s employment report is a reminder that the economy’s troubles run deeper than the financial market distress that is monopolizing the headlines. Enacting the financial rescue plan before the House today is vital to reduce the risk of financial meltdown and an ensuing economic contraction more severe than any since the 1930s. But … -
Video: Nicholas Johnson, Director of the Center's State Fiscal Project, speaks about state budget on CNN's Lou Dobbs
October 3, 2008
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Statement on Senate-Passed Financial Rescue Legislation by Robert Greenstein and Chad Stone
October 2, 2008
The House should quickly approve the financial rescue plan that the Senate approved in strong bipartisan fashion yesterday. Further delay would leave the U.S. economy increasingly vulnerable to a contraction more severe than any since the 1930s — one that could trigger large increases … -
House Stimulus Plan Effectively Targets Fiscal Relief to States
September 26, 2008
The House Leadership’s new stimulus proposal includes more than $14 billion in fiscal relief for states. This is designed to help states avert budget cuts and tax increases that they otherwise will have to institute to balance their budgets but that will make the economic downturn worse by withdrawing demand from the … -
Key Components of House and Senate Economic Recovery Packages Would Boost the Economy and Provide Needed Relief to Struggling Families
September 26, 2008
Congress is properly focused on designing an appropriate measure to address very serious problems in the financial markets, which many experts persuasively argue is essential to help avert a meltdown in the financial markets and a potentially severe recession. The problems in the financial sector, however, are not the only ones the … -
Bonus Depreciation Tax Cut Unlikely To Provide Effective Economic Stimulus
September 10, 2008
Stimulus legislation enacted in February included a provision that increased the tax deduction which businesses can claim when they purchase certain types of equipment and place it in service during the 2008 tax year. Suggestions are being made that this “bonus depreciation” provision — a form of accelerated … -
Statement by Chad Stone, Chief Economist, on the August Employment Report
September 5, 2008
Today’s extremely disappointing employment report shows that the economy remains mired in a slump and still waiting for something to jump start a sustainable recovery. Consumer spending supported by the stimulus payments that Congress enacted earlier this year helped keep the economy growing … -
Statement by Chad Stone, Chief Economist, on the July Employment Report
August 1, 2008
Today’s disappointing employment report lends greater urgency to lawmakers’ efforts to craft a second round of effective economic stimulus legislation that Congress can enact quickly when it returns in September. Consumer spending supported by the stimulus payments that Congress … -
House-Passed Housing Tax Package Improves Significantly on Senate Version: But Addressing the Foreclosure Crisis Will Require Other Measures
Revised June 17, 2008
On April 10, the Senate passed a bill comprised largely of housing-related tax cuts. [1] Six weeks later, the House passed its own housing legislation including its own package of housing-related tax measures. Some of the provisions in House-passed housing tax package have merit, and the House-passed tax package represents a … -
The Unemployment Rate Is Already High Enough to Warrant Extended Benefits
Revised June 16, 2008
On June 6, the U.S. Department of Labor reported that the unemployment rate had risen sharply, to 5.5 percent. Legislation is moving on Capitol Hill to provide additional weeks of unemployment insurance (UI) benefits to people whose regular benefits run out before they can find a new job. (The House passed such legislation June 12.) … -
Statement by Chad Stone, Chief Economist, on the May Employment Report
June 6, 2008
Today’s disappointing employment report should lead the White House to reconsider its opposition to extending unemployment insurance benefits for workers who have been unable find a new job. A temporary extended benefits program for workers who exhaust their regular unemployment insurance … -
Statement by Robert Greenstein on the House Supplemental Funding Bill
May 15, 2008
The House supplemental funding bill makes important changes to domestic policy by temporarily extending unemployment benefits and imposing a moratorium on harmful Medicaid regulations. The unemployment measure would provide, on a temporary basis, an extra 13 weeks of jobless benefits to workers … -
Senate Housing Legislation Highly Disappointing: Less Than One-Fourth of Cost of Senate Bill Goes for Provisions That Will Actually Help Address the Foreclosure Crisis
Revised May 12, 2008
On April 10, the Senate passed legislation that its supporters say will help struggling families hold on to their homes and assist the communities hit hardest by the foreclosure crisis. Measures that would help achieve these goals, however, account for less than one-fourth of the bill’s cost. The remainder of the cost comes … -
Statement by Chad Stone, Chief Economist, on the April Employment Report
May 2, 2008
Today’s employment report provides no comfort to those who want to work but can’t find a job, especially those who have exhausted their regular unemployment insurance benefits or soon will. Congress should quickly enact temporary extended unemployment benefits both to support the … -
Statement by Chad Stone, Chief Economist, on the March Employment Report
April 4, 2008
Today’s disappointing employment report makes one thing clear: Congress should quickly enact temporary extended unemployment insurance benefits, both to support the slumping economy and to provide needed assistance to workers who have been looking for work for more than half a year and have … -
Policy Points: Four Helpful Hints for States Dealing With Deficits
March 12, 2008
States, facing their worst fiscal problems in five years, should consider the following four policy options when dealing with deficits: (1) protect their revenues from the effects of federal tax changes, (2) tap their "rainy day funds," (3) don't rule out revenue increases, and (4) avoid "stimulus" tax cuts. At least 25 states, including several of the … -
Statement by Chad Stone, Chief Economist, on the February Employment Report
March 7, 2008
Today’s employment report adds to the mounting evidence that the economy is too weak to avoid more unemployment and shrinking job opportunities in the months ahead. Rather than wait too long, as it has in similar situations in the past, Congress should quickly enact temporary extended … -
Economic Data Can be Used to Target State Fiscal Relief Effectively
March 3, 2008
States are experiencing major budget problems; more than half faced or are projecting deficits for the 2009 fiscal year. To meet their balanced budget requirements, many states have had to raise taxes and/or cut expenditures for services such as health care and education — actions that deepen the nation’s economic problems and offset some of … -
Fiscal Stimulus at the State Level?
February 29, 2008
Policymakers in many states are proposing tax cuts or rebates that they hope will “stimulate” their economies. Such proposals have been issued by governors and/or leading legislators in Alabama, Arizona, Connecticut, Florida, Illinois, Pennsylvania, and Wisconsin, among others. The proposals vary, but many are modeled at … -
New Federal Law Could Worsen State Budget Problems
Revised February 28, 2008
The federal “economic stimulus” package enacted on February 13 not only cuts federal taxes, but also threatens to reduce many states’ corporate and personal income tax revenue this year and next year. The potential revenue loss comes at a particularly problematic time for states, because about half the states … -
Net Operating Loss Measure under Consideration In Senate Has Low Bang-For-The-Buck As Stimulus: No Justification for Waiving PAYGO for the Provision
February 26, 2008
According to news accounts, the Senate will soon consider a housing stimulus package (S. 2636), introduced by Senator Reid earlier this month.[1] While the package primarily targets the housing market, it also includes a measure dealing with business net operating losses. A business experiences a “net operating … -
Is It Raining Yet? Yes, and It’s Time for Many States To Use Their Rainy Day Funds
February 21, 2008
Executive Summary After they emerged from the fiscal crisis earlier in the decade, many states began preparing for the next economic downturn by setting aside “rainy day funds,” or reserve accounts designed for use when revenues decline or expenditures increase unexpectedly because of downturns, natural disasters, or other events. A rainy day fund serves … -
Using Income Taxes to Address State Budget Shortfalls
February 21, 2008
States are on the brink of their worst fiscal problems since the 2001 recession. At least half the states are anticipating budget shortfalls for next year (fiscal year 2009). For those states that have estimated the size of the gap, estimated deficits range from $34 billion to $38 billion in total. Among affected states, … -
Policy Points: Despite Some Problems, Senate Finance Committee Measure More Effective as Stimulus Than House Bill
February 1, 2008
Some have charged that the Senate, by failing to simply rubber-stamp the House-approved stimulus package, is delaying the injection of stimulus into the economy. This charge is incorrect. Some also have criticized the specific stimulus measures approved by the Senate Finance Committee.… -
Senate Rebate Proposal Targets More Funds to Low-Income Households, Boosting Stimulus Impact: Lifting Income Cap Reduces Bang-for-the-Buck, But Changes Are an Improvement Overall
Revised February 1, 2008
The stimulus legislation that was adopted by the Senate Finance Committee on Wednesday would make several changes to the House-passed stimulus package, including significant changes to the tax rebate proposal that on balance would make the rebate more effective as stimulus. While retaining the House rebate’s basic structure, the Finance … -
Statement by Chad Stone, Chief Economist, on the January Employment Report
February 1, 2008
Today’s employment report provides fresh evidence both that the economy is slowing and that Congress should include a temporary extension of unemployment insurance benefits in its fiscal stimulus package. The percentage of the unemployed who have been looking for a job for more than half … -
Senate Action Will Not Delay Rebates
January 31, 2008
The facts are clear: Senate action on the stimulus package will not delay the rebates by a single day. The earliest that the IRS can begin to send out rebates is mid-May. No matter how fast Congress enacts the stimulus package, the IRS cannot start issuing the rebates any sooner because it must first process the 2007 … -
Senate Proposal to Add Unemployment Insurance Benefits Improves Effectiveness of Stimulus Bill
January 31, 2008
The economic stimulus package approved by the Senate Finance Committee contains an important improvement to the package the House passed January 29 — the addition of temporary extended unemployment insurance (UI) benefits. The Finance bill would make 13 weeks of additional UI benefits available to all jobless Americans who … -
Repatriation Measure Unlikely to Stimulate the U.S. Economy or Boost U.S. Investment — But Will Promote Investment in Tax Havens and Undermine the Corporate Income Tax
January 30, 2008
When the Senate Finance Committee considers stimulus legislation today, Senator John Ensign is expected to offer an amendment dealing with repatriated foreign earnings. Modeled on a provision included in the 2004 American Jobs Creation Act, Senator Ensign’s amendment would create a tax holiday during which repatriated … -
Dispelling Confusion on Food Stamps, Tax Rebates, and the Stimulus Package: Speaker's Statement on Food Stamps at National Press Club Was Mistaken
January 26, 2008
House Speaker Nancy Pelosi made tough choices in the stimulus package, securing a tax rebate that includes most low-income working families while dropping provisions for temporary increases in unemployment and food stamp benefits. Unfortunately, in defending those choices at the National Press Club on Friday, she mistakenly provided an inaccurate description … -
An Analysis Of The Rebate Proposal In The Announced Stimulus Deal
January 25, 2008
The centerpiece of the stimulus deal announced yesterday by House Speaker Nancy Pelosi, House Minority Leader John Boehner, and Treasury Secretary Henry Paulson is a proposal to send rebate checks to 117 million U.S. households. The structure of the proposed rebate, while not ideal from a stimulus standpoint, is far superior to the … -
Statement by Robert Greenstein: Reported Stimulus Package Would Provide Little Immediate Boost Due to Removal of Most Effective Provisions
January 24, 2008
Changes reportedly made last night in the stimulus package would reduce its effectiveness as stimulus. Although the package includes a reasonably designed tax rebate, the two most targeted and economically effective measures under consideration — a temporary extension of unemployment benefits and a temporary boost in food stamp … -
Tax Policy Center Estimates Show Fewer Than 60 Percent of Working Households Would Benefit In Full From President’s Proposed Rebate
January 22, 2008
The centerpiece of the President’s economic stimulus proposal reportedly is a tax rebate that would be provided by temporarily reducing the 10 percent income tax rate to zero. The plan has been described as featuring a rebate of $800 for individuals and $1,600 for couples. This description, however, is misleading. Only those … -
Zandi Analysis Finds Rebates More Effective As Stimulus If They Include Lower-Income Workers
January 22, 2008
A new analysis by Mark Zandi, chief economist of Moody’s Economy.com, examines the effectiveness of various stimulus options that policymakers are now discussing. Zandi’s findings, which cover both tax and spending options, include the following: A temporary increase in food stamp benefits is the most effective stimulus measure on the … -
29 States Faced Total Budget Shortfall of at Least $48 Billion in 2009
January 15, 2008
For the most up-to-date information on state budget shortfalls, please view our newer analysis: "State Budget Problems Worsen: 13 States Face New Shortfalls" At least 29 states plus the District of Columbia, including several of the nation’s largest states, faced … -
The Four Pieces of Effective Fiscal Stimulus
January 14, 2008
Recent evidence that the economy has weakened significantly has sparked discussion of possible fiscal stimulus measures. To be effective, such measures must be timely, targeted, and temporary. Timely measures are those that, once triggered, stimulate new spending quickly so that … -
Principles for Fiscal Stimulus Economic Policy in a Weakening Economy
Revised January 11, 2008
The weak December jobs report that the Labor Department issued January 4 is the latest evidence the economy has weakened significantly and is now growing quite slowly. A number of economists continue to believe this slow growth will continue into 2008, but that the economy will avoid slipping into a recession.[1] Some … -
Statement by Chad Stone, Chief Economist, on the December Unemployment Report
January 4, 2008
Today’s report shows that the economy is entering 2008 with a weakening labor market. Employers expanded their payrolls by a meager 18,000 jobs in December, private payrolls actually shrank by 13,000 jobs, and the unemployment rate rose from 4.7 to 5.0 percent. These data are very …
