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The State of the Nation: Jobs, Trade, Health Care, Housing, Retirement Security

Author: Dennis Kucinich
January 20, 2004
Council on Foreign Relations

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Rep. Dennis Kucinich, D-OH
January 20, 2004
Bedford, New Hampshire

Thank you very much everyone and it’s a pleasure to be here in Bedford, New Hampshire to talk about the state of our nation and to discuss with you the concerns which people all over this country have for jobs, trade, heath care, housing and retirement security.

Our nation is in a perilous condition due to fear, war, tax cuts to wealthy Americans and trade policies which lead to widespread unemployment in manufacturing and high tech industries. The rising cost of health care threatens the financial stability of all Americans. The retirement security of tens of millions of Americans is in doubt. Social security is under attack with yet another privatization scheme.

National economic trends are discouraging. The official unemployment rate for all of 2003 was 6% but this figure masks the number of people who have not been able to find work and who have given up looking for work and are no longer recorded in the totals. Tax cuts produced only a fraction of the jobs promised. The economy would have to create 375,000 new jobs per month in order to keep this administration from having the worst job creation record of any administration since the beginning of the Great Depression. There are 2.4 million more people unemployed now than when the Administration took office. In less than 3 years a projected ten year surplus of 5.6 trillion has turned into a projected deficit of 3.6 trillion.

The official poverty rate is up from 11.7% in 2001 to 12.1% in 2002. Nearly 34.6 million Americans live in poverty. About 1.7 million more than in 2001.

In New Hampshire, for example, 11,255 workers have become unemployed since this Administration took office and 22,000 manufacturing jobs have been lost.

It is urgent that we immediately institute a job creation program patterned after the WPA of the Administration of President Franklin D. Roosevelt. America has hundreds of billions of dollars of infrastructure needs. We must rebuild our roads, our bridges, water systems, sewer systems, libraries; build new schools and colleges and new sustainable energy systems. What I’m proposing is a $500 billion program. It would be funded in this way: The Federal Reserve holds a large amount of treasury securities, and a certain portion of those securities would be transferred to a newly created Federal Bank of Infrastructure Modernization. The money would be loaned to the states at zero interest. The states would pay the principal back, which would replenish funds in the bank. The zero interest loan program, through the creation of a Federal Bank of Infrastructure Modernization, would cut the cost of projects in half for states, thereby eliminating interest expense, or through the elimination of interest expense.

Every state and local government would have access to $185 per capita per year for ten years for infrastructure improvements. We can put millions of Americans back to work with just this one program. Millions of Americans. And we can create good paying jobs with a living wage.

Now, it is clear that the tax cuts to the top have not improved the economy. They must be cancelled [applause]. They must be cancelled because they have created a system that favors the wealthy over middle class working people. The tax cuts have complicated the tax code with loopholes and have caused massive deficits.

We must stop the shift in wealth which is occurring in this country, it’s occurring through our tax code, and we must also stop the loss of jobs which is occurring through our trade policies.

Since July of the year 2000, America has lost three million manufacturing jobs in textile, steel, automotive, aerospace, shipping and other industries. A $500 billion trade deficit is looming as a long-term threat to our national economic security.

Each job loss represents a family dream deferred or destroyed. Each job loss represents a house whose mortgage may be in jeopardy. A family that may lose its health benefits. A young person who may lose his or her chance for an education. A retirement security that will be jeopardized or lost. A neighborhood that may lose long time residents. A family that may break up under the circumstances of tremendous economic pressure.

We must recognize that current trading structures created by global corporations have worked against the interests of the American people. NAFTA is directly responsible for the loss of over 550,000 good paying jobs. The World Trade Organization facilitates a loss of jobs in this country due to creating circumstances which makes it much easier for global corporations to move to low wage climates where there are no workers rights, human rights or environmental quality principles. As a matter of fact it could be said that these trade structures were created specifically to preclude the protection of workers rights. We must recognize the responsibility which we have as a nation to make sure that we have a productive capacity, a strong ability to manufacture things. And we must recognize our responsibility to also protect high tech jobs which have been the basis of America’s leadership in so many areas of economic endeavor. For that reason and in recognition of the severe pressure that has been put on our economy as a result of NAFTA and the WTO, as President I will recommend to the people of this country and will initiate action to cancel NAFTA and the WTO [applause] and to return to bilateral trade, which will be conditioned on workers rights, human rights and environmental quality principles [applause].

Our trade structures and our tax code are both creating conditions where the rich are getting richer and the poor are getting poorer. And this administration’s policies are creating conditions where a transfer of wealth is occurring also as a result of an unnecessary war that’s being driven by fear [applause].

In the last State of the Union address, the president of the United States outlined a grim scenario of the threat which Iraq was said to have posed to the United States of America. Today we know the truth. Today we know that Iraq did not have weapons of mass destruction. Today we also know that Iraq had nothing to do with 9-11, with al Qaeda's role in 9-11, with the anthrax attack upon this country, that Iraq had neither the intention nor capability of attacking the United States, that in fact Iraq was not trying to acquire uranium from Niger, and that in fact the attack on Iraq represented a colossal blunder by this Administration which has led to the loss of over 500 of the young men and women who have served this country, which has led to the loss of the lives of countless innocent Iraqi civilians. And which has led to the depletion of our national resources.

The war in Iraq has already cost this country $155 billion. This Administration has submitted a budget for this fiscal year, which recommends reductions in spending for job creation, healthcare, education, housing and other areas. At the same time it is expanding a Pentagon budget. And the expansion of the pentagon budget is happening simultaneously with the administration’s prosecution of the war in Iraq. Both the prosecution of the war in Iraq and the expansion of the Pentagon budget have been driven by fear. This administration has tried to capitalize on the fear by expanding the United States presence in Iraq and setting this country on a collision course between the people of Iraq and our own US troops.

In recognition of the fact that it was wrong for the United States to go into Iraq because there was no basis to do so, we now have to address the question of the United States' continued presence in Iraq. The United States' continued presence in Iraq will dearly cost this country in terms of the lives of those who serve and in terms of the tax dollars used to pay for this adventure. We must recognize that policies of unilateralism and preemption have caused this country to go down a path which has separated us from the world community.

How much better it would have been if the Administration had permitted UN inspectors to do their job [applause]. And as we understand that the use of UN inspectors to continue looking for weapons of mass destruction would have resulted in the discovery that no such weapons existed, we now can begin to consider how urgent it is that the United States take steps to reconnect with the world community [applause].

So I am recommending the following course of action that the United States as they are approaching the United Nations provide a new approach which will enable us to work with the UN and work with the people of Iraq to achieve the stabilization of Iraq, first through the United States handing over to the UN the responsibilities for all the oil assets in Iraq [applause] and that the UN will handle those on a temporary basis on behalf of the Iraqi people until the Iraqi people are self governing. Second, that the United States hand over to the UN the contract process in Iraq [applause] and in doing so remove the taint that has been attended to that process. We must recognize that the world community has great skepticism about our nation's leaders who have seen fit to give no-bid contracts to those with political connections to create conditions where political insiders who have contributed to the Administration would be able to get contracts. To create conditions where large contracts are given and then subcontracted at pennies on the dollar and to create conditions where the people of Iraq remain largely in a condition of severe unemployment while billions of dollars are floating around Baghdad. This has led to attacks on troops while the frustration of the Iraqi people keeps building. And this condition of holding on to control of the contracts will only make of our troops more frequent targets.

We must go to the UN and create a reconnection with the world community by renouncing policies which call for the privatization of the economic resources of Iraq [applause]. In doing so we will abide by the Geneva and The Hague Conventions, which make it very clear that no nation has the right to invade another nation, steal its assets and then sell them off. The American people do not stand for that kind of conduct, and I would say that by and large the American people are unaware that the Administration on September 19th made a decision to set forth the privatization of the top 200 economic activities in Iraq. The wealth of Iraq belongs to the Iraqi people. It is not to be carted off as some kind of plunder of war, and so I am calling for the United States to renounce the attempted privatization and to leave the fate of the Iraqi economy up to a duly elected Iraqi Government.

Yesterday, while Americans took time out to celebrate the life of Dr. Martin Luther King, 100,000 people marched through the streets of Iraq demanding the right to have free and fair elections. It was a peaceful and non-violent demonstration by Sunni and Shi'ite Muslims alike, who were insisting that they be accorded the right to self-determination which, after all, is what this administration says they’re interested in. And so, it is urgent that we turn this process also over to the United Nations so that the United Nations can help work with the Iraqi people to develop a constitution and to set elections which will be the cause of political stability in Iraq.

We should work to stabilize Iraq and the way that we can help do it is to help to fund a UN peacekeeping mission which would allow UN troops to come in, and to bring our troops home [applause]. And in doing so we recognize that the only way the United Nations would ever be interested in taking on this task, would be because the United States is shifting its position of a desire to control the oil, the contracts to privatize, and to run the government of Iraq indirectly. So that shift of position will enable the United Nations to have a cause to go to its member nations and in doing so bring UN troops in, and bring United States troops home.

In consideration of that, we have an obligation to help fund such a peacekeeping mission. We have an obligation to rebuild what was destroyed in the US invasion [applause]. We have an obligation to provide reparations to the families of innocent, civilian non-combatants who perished in the conflict [applause]. There is a way to resolve this question of the United States' presence in Iraq. It’s important for the American people to know that the Administration plans on a long-term occupation. If we are there for years, the casualties will go into the thousands, the cost to the American economy over half a trillion if not facing a trillion dollars.

By working with the world community, we can reconnect with our aspirations for safety and security here at home [applause]. This is how we’ll be safer. And we have an obligation to make this country safe and we have a responsibility as a government to make sure that people will be safe, and it is through working with the world community through the United Nations and bringing to justice those who have practiced or would create terror and addressing the conditions that give rise to terrorism [applause] and as we do that, we can take a new direction here at home and take the strong measures that are needed to repair the hopes of Americans for physical and economic security.

Back here at home, forty three million Americans do not have health insurance, including 125,000 residents of New Hampshire. Seventy percent of the uninsured live in a family with at least one full-time worker. So, even if you have a job it does not necessarily mean that you are going to be spared the distress of a lack of insurance. Health insurance premiums have increased over 50% in the past three years, and over the past three years, senior citizens’ total spending on prescription drugs have increased by about 50%. American seniors will spend $1.8 trillion on prescription drugs over the next ten years. Everyone knows Americans pay more for prescription drugs than people in other countries, including Canada, which is why so many Americans have gone to Canada in order to buy prescription drugs. The Administration’s Medicare plan will increase the profits of drug companies and undermine Medicare through eliminating cost containment measures. And not everyone receives those meager benefits. In New Hampshire, for example, 18,300 seniors are worse off under this new plan.

It is time, my fellow Americans, for a universal, single payer, not-for-profit system [applause]. This is a system that is called extended Medicare for All. Now such an approach is contemplated in HR 676, a bill I have cosponsored in the House of Representatives, which will phase in a full-coverage plan over a ten-year period.

This approach to health care emphasizes patient choice and puts doctors and patients in control of the system, not insurance companies. [applause]

The fact is that the American people are already paying for a universal standard of care, but they’re not getting it. Over $1.6 trillion, about 15% of our gross domestic product, is spent for health care. This amount, the $1.6 trillion, would be sufficient today to provide full health coverage for all medically necessary procedures, plus care for vision, dental, mental health, long-term care and a prescription drug benefit. It could all be covered if all the health care dollars went for health care. [laughter] Unfortunately, hundreds of billions of that $1.6 trillion goes for the benefits and for the activities of a private, for profit health care system. Consider what you actually pay for when you pay your health care premiums. You pay for corporate profits, for stock options, for executive salaries, for advertising and marketing and lobbying. And you pay for the cost of private sector administration which is 15% - 30%, compared to Medicare’s 3%. Executives of health insurance corporations routinely make millions a year while their agents routinely refuse doctors’ requests for tests and procedures for their patients. Premiums, co-pays and deductibles are soaring while a few profit at the expense of the many and while health insurance companies are busy with expensive acquisitions which allow them to achieve increasing market dominance.

In New Hampshire, for example, Anthem raised premiums substantially after it acquired Blue Cross and Blue Shield. Executives of pharmaceutical companies also make millions while charging American consumers three times what people in other countries pay for the same identical prescription.

I am offering the American people a plan which will remove private insurance companies and all their tricks from the system, along with removing their profits, excessive executive salaries, their waste and their paperwork and redirect resources to actual treatment. [applause]

Insurance companies do not make money providing health care. They make money by not providing health care. They do not treat or heal anyone; physicians and health practitioners do. A study by researchers of the Harvard Medical School and Public Citizen found that health care bureaucracies last year cost the United States almost $400 billion and that a single payer system would save at least $286 billion annually, enough to cover all the uninsured and provide a fully funded prescription drug benefit.

A not-for-profit health care system therefore will actually decrease the total health care spending while providing more treatment and services. [applause]

Funding for a not-for-profit system will come primarily from existing government health care spending, which is about $1 trillion, and a phased-in tax on employers of 7.7%, which would yield about $1 trillion. Employers who provide coverage are already paying about 8.5% on average. So employers who already provide coverage would actually be saving money and their employees would have comprehensive coverage.

The cost effectiveness of a not-for-profit, universal system of health care has been affirmed by several studies, including those by the General Accounting Office and the Congressional Budget Office. The GAO has said, "If the US were to shift to a system of universal coverage and single payer, as in Canada, the savings in administrative costs would be more than enough to offset the expense of universal coverage."

So the American people must know that they are already paying for a universal standard of care; they’re just not getting it, and as President of the United States, I would lead the way to a universal not-for-profit system of health care where this country would surely care for all of those in healthcare need and we would also lead the way in introducing principles of preventive health care and create access to complementary and alternative medicine to give the American people a full choice of health care options. [applause]

I have spoken about job security, about national security, about health security. I would like now to speak about housing security.

Twelve million households pay half of their incomes for housing. There is an urgent need for subsidized housing. Programs for the preservation of public housing, project-based Section 8 and tenant-based subsidized housing must be fully funded and expanded. This will lower the amount of family income that goes to housing, so that millions of American families can meet other basic needs for food, shelter, utilities and transportation. Because we must recognize that as the cost of affordable housing goes up more and more Americans are precluded from the housing that they need. More and more Americans are precluded from an opportunity to shelter themselves effectively. And more and more Americans are excluded from housing which is adequate to meet the needs of their family.

I believe it is time for the Department of Justice to investigate conditions where people who aspire to have home ownership are being exploited. The Justice Department must investigate, prosecute and eliminate predatory lending practices, practices which create extraordinarily high interest rates, balloon payments and inflated lender fees which people who are desperate for housing are ready to pay, but once they pay them they end up losing the very homes they aspired to purchase. And of course we know that these sharp practices are often aimed at low income communities and at communities of color where people usually lack legal recourse.

In addition to housing security, it is important that we address what will become one of the most compelling debates in this nation and that is the issue of social security.

I want the American people to know that Social Security is essentially sound. The Social Security Trust Fund, according to an analysis by the fund’s trustees, is solvent through the year 2042, without any congressional action being necessary. Social Security is projected to pay all of its promised benefits over the next four decades without any changes whatsoever. A shortfall projected to occur in the year 2042 is not a crisis. [applause]

There is a political crisis, however, looming for Social Security.

The same Administration which looked the other way while millions of investors were being defrauded by chicanery in mutual funds and by unscrupulous Wall Street operators such as Enron now wants to take your Social Security funds and invest them in the stock market. [“no!” from the audience] Right, it’s not funny. Think about it. They want to invest Social Security funds in the stock market in a plan called "private savings accounts."

Most people understand that investment in the stock market is risky. What goes up must come down. For every winner there is a loser. Social Security is the only guaranteed income for old age and for disability. It is what protects many Americans from poverty. Proponents of this scheme to invest Social Security funds in the stock market assume that the stocks will earn a 7% annual rate of return over the next 75 years. Social Security trustees are predicting the growth of the economy will slow to something like 1.45% per year over that period, meaning that it will be impossible to get a 7% rate of return on stocks in a slow growth economy.

Additionally, we must insist on a critical inspection of the actuarial assumptions for privatization.

There is no sound reason to privatize Social Security. Simply put, the money belongs to main street, not Wall Street. [applause] People work a lifetime— a lifetime— to gain a small measure of economic security through Social Security and no one’s future ought to be jeopardized just because of the greed of a few who want to fuel the growth of the market.

Social Security is solid. But the same is not true for the private pension plans of tens of millions of Americans, which are in jeopardy. Those who are holders of 401K programs understand how they have paid a heavy price for the Administration’s lack of due diligence in policing the stock market. But we’re also finding that more and more corporations are failing to fully fund their defined benefit pension plans and are using bankruptcy to cheat hardworking Americans out of their full retirement benefits while dumping pension obligations onto the taxpayer backed Pension Benefit Guarantee Corporation.

The PBGC assumed liabilities of 152 pension plans just in the last year. A $7.73 billion surplus in the PBGC in the year 2001 has turned into a deficit of $11 billion. The takeover of seven giant plans, together with the Pension Benefit Guarantee Corporation’s own faltering stock portfolio has led the Pension Benefit Guarantee Corporation to incur a $7.6 billion loss in 2003 alone, which was the largest loss in its history.

What’s more, the under-funding of pension plans is so severe that it is anticipated that $85.5 billion in pension claims are under-funded.

According to the LA Times, nearly 90% of the 343 companies in the Standard and Poors 500 that offered traditional, benefit-defined pension plans in 2002 were under funded, despite the fact that in 1999 these corporations had a total pension surplus of $251 billion. By the end of 2002 that surplus became a shortfall of over $350 billion.

The average under-funding of pensions is at least $10,000 per covered employee. The under-funding of pensions is a breach of trust. Corporate executives and board members ought to be accountable in both civil and criminal law for under-funding pensions. Pension funds must have equal standing in bankruptcy court with banks in order to protect the assets of the funds. Pension fund obligations should be attached to successor corporations so that no one would ever attempt to ever avoid paying a pension fund simply by closing one corporation and opening another. [applause]

We must recognize what the legitimate purposes of government are. The legitimate purposes of government are to protect the people, to help create economic opportunities, to make sure that the health care needs, the educational needs, the housing needs of the nation are provided for. The government of the United States has a responsibility to protect those who worked a lifetime to make sure that at the end of the long life of work that people have something that they can hold on to.

It is a great misfortune of our times that the resources of this country are now going for tax cuts to the wealthy, for a war that is totally unnecessary and unwarranted, for the expansion of a Pentagon budget which is driven by fear. We must recognize that we are being deprived of our economic freedoms by political strategies which propel fear in order to try to convince the American people that they should sacrifice all of their practical aspirations for a decent life.

When Francis Scott Key wrote the Star Spangled Banner he posed the challenge to all Americans. He raised the question “does that star spangled banner yet wave over the land of the free and the home of the brave?” He made the connection between freedom and bravery, between courage and democracy. And in doing so he sent a message for generations hence that it is courage and fearlessness that will always be the path by which America meets the needs of our people and shares the responsibilities with the nations of the world.

We are at a time in the history of our country when the people of America have a right to insist on a government they can call their own. On a government which will make sure that their jobs are protected, that their family’s health can be assured, that their children can have fully paid public education from age 3 all the way through and including college. [applause] That from the beginning of life until the twilight years that the government embraces the American people with a full understanding of its true purpose to be a vessel for social and economic justice, to be a cause for the building of community, to be a nation which holds up its highest purpose to create peace and prosperity. Thank you.