OPPOSITION TO REAGAN ECONOMIC POLICIES

The United States is at a critical point in its economic history. Past policies have brought about high inflation, high unemployment, and slow or negligible growth. A continuation of those policies provides no future for America.

President Ronald Reagan is pursuing a "Program for Economic Recovery" which is based on the latest fad, supply-side economics. This approach relies on increasing the supply, or quantity, of labor and capital entering the economy by enacting large federal spending cuts and tax cuts. Reagan's plan is based on untested economic theories and is likely to be highly inflationary, without helping any of the deep, underlying economic ills facing our nation. The Reagan policies will cut essential public services to those who need them most and shift fiscal responsibility for major public functions to already financially hard-pressed state and local governments.

Education program cuts will cause many handicapped, disadvantaged, non-English speaking, and other children in need of special educational services to go unserved or underserved. Teachers will lose their jobs. Some will require public assistance.

Student assistance program cuts will deny the benefits of a college education to many worthy students and cause financial hardship for our nation's colleges and universities.

Medicaid and health program cuts will deny benefits to those in need of essential health services. An increasing share of the health cost burden will shift to patients and health care institutions. Many nurses and other health professionals will lose their jobs. Some will require public assistance.

Urban aid, economic development, social welfare, and subsidized housing program cuts will accelerate the decline of our nation's cities by exacerbating housing shortages, increasing unemployment, causing more decline in public services, and placing additional burdens on already under funded educational, health, and social welfare institutions.

Other program cuts will cause increases in local and state taxes and user fees and in the costs of living for many families. They will also result in inflationary rises in unemployment and public assistance costs.

The tax cuts favored by the Reagan administration will not accomplish what they are supposed to do.

The greatest share of the individual tax cuts will favor the wealthy and provide token tax relief for low and middle income families. The net effect will be to aid the wealthy and create new inflation.

The business tax cuts are not targeted to increase production or investment. They will simply increase corporate profits and provide little or no stimulus to the economy.

Combined with Social Security increases, the tax cuts will provide a net benefit for those earning above $30,000 per year and a tax increase for those earning less than $30,000 per year.

The bulk of the extra income provided through tax cuts will be used for consumption rather than saving and will do little to increase investment.

A more positive and reasonable approach is needed. The AFL-CIO has advocated:

• reduction of high interest rates which choke the national economy, prevent expansion, drive inflation upward, and contribute to increased federal deficits.

• reduction of unemployment through provision of training and job opportunities.

• use of an effective combination of targeted taxing and expenditure programs to reverse the damage caused by inflation and unemployment.

That program is a sound one for placing the national economy on the road to recovery.

RESOLVED, that the American Federation of Teachers continue its opposition to the ill-conceived Reagan economic program of massive budget cuts combined with income tax cuts; and

RESOLVED, that the AFT support the AFL-ClO's economic program designed to reduce interest rates, reduce inflation, reduce unemployment, and encourage economic growth; and

RESOLVED, that the AFT work to restore major cuts made in federal programs in education, health, and social welfare areas which will place an undue burden on lower and middle income Americans and retard critically needed human capital development.