AFL-CIO president: We need a second stimulus program

McClatchy NewspapersSeptember 2, 2010 

WASHINGTON — With the Labor Day weekend approaching, union leaders and U.S. business interests expressed concerns Thursday about the fragility of the nation's economic recovery. They offered drastically different remedies for fixing the country's woes, however.

AFL-CIO President Richard Trumka, speaking at a breakfast meeting, said Congress needed to approve a second stimulus program for the economy and allow former President George W. Bush's tax cuts to expire at the end of this year as scheduled.

"Our fear (is) that people in government will begin to pull back too quickly, and threaten the recovery," Trumka said. "They have begun to pull back too quickly, not necessarily voluntarily, but because of the (partisanship) that we see up in the House, so the recovery right now is in jeopardy."

Officials of the U.S. Chamber of Commerce offered a different take at the group's pre-Labor Day weekend economic briefing, warning that increased regulation from Washington, letting the Bush tax cuts lapse and allowing proposed changes in the law that would make it easier for unions to organize workers would spell disaster for the economy and trigger further unemployment.

"Unfortunately for millions of Americans, the agenda currently being pursued by Washington has made it tougher for employers to hire new workers," said Randy Johnson, the chamber's senior vice president for labor, immigration and employee benefits. "It's hard to create jobs and drive the economy forward when you're worried about a blizzard of new rules and regulations built upon an already complex regime of employment laws."

The differing views came a day before August's unemployment figures and payroll numbers were to be released. The nation's unemployment rate has been stuck at 9.5 percent since June and has hovered over 9 percent since May 2009.

Private-sector employment has grown by 630,000 jobs since its low point last December. The figure excludes government payroll. The growth in private-sector hiring has been consistent, but it remains well below the levels that are needed to reduce the jobless rate significantly.

A second stimulus would help improve the unemployment picture, Trumka said.

"You have an economy that needs priming, and every economist out there will tell you that," he said. "We would like to see that."

The prospects of that happening are shaky, however. Democratic leaders want a vote on extending middle-class tax cuts before the November elections, but at the moment it appears unlikely that the Senate will have the 60 votes needed to end debate and vote on the measure.

Republican challengers and incumbents have made Washington spending and the federal budget deficit campaign talking points. They are touting tax cuts as a way to spur the business sector to do more hiring and more spending, a position that the chamber of commerce embraces.

"The most important thing Washington can do for the economy is to take action immediately to prevent massive tax increases on America's consumers and businesses," said Martin Regalia, the chamber's chief economist. "Providing certainty for employers will go a long way toward restoring our economy and creating jobs for the American people."

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