The Economy (CNN News - Lou Dobbs)

DOBBS: Today, the Senate heard testimony on how our middle class is bearing the brunt of this slowing economy. Imagine that, they needed experts.

Kitty Pilgrim has our report.


KITTY PILGRIM, CNN CORRESPONDENT (voice-over): A year of congressional hearings and, still, nothing has been done.

SEN. BERNIE SANDERS (I), VERMONT: The title of this hearing is "The Squeeze of the Middle Class," I don't think it's a squeeze, I think it's a collapse.

PILGRIM: In the last seven years, costs of the average family are up more than $4,000 a year for basics like food, gas, housing and health insurance. The cost of the average commute is up more than $2,000. Harvard Law professor Elizabeth Warren who's an informal adviser to Senator Obama's presidential campaign, compiled the data and she says the annual budget gap for middle class Americans is now $5,830 a year.

PROF. ELIZABETH WARREN, HARVARD LAW SCHOOL: Families are not laying down the credit cards because it's fun. They're laying down the credit cards because it's the only way to put food on the table.

PILGRIM: Warren's figures show median household income has dropped by $1,175 since the year 2000, even while the economy was growing.

SEN. CHARLES SCHUMER (D), JOINT ECON. CMTE. CHMN.: Middle class families are the engine of our economy, but their earning power and economic security has declined significantly in the last seven years.

PILGRIM: Some see the solution in a second stimulus plan that would include funding for infrastructure to generate jobs.

REP. CAROLYN MALONEY (D), JOINT ECONOMIC CMTE.: The president should work with Congress to enact a second stimulus package of aid to the states and infrastructure investment, to get the economy back on track.

PILGRIM: But the Senate dropped that debate until September.


PILGRIM: Meanwhile, legislation to help American families facing foreclosure is crawling through Congress. The House voted to pass the housing bill late today. Now it goes to the Senate, but it could be months before Americans see any relief because of that bill.

DOBBS: Well I applaud the idea of investing in infrastructure, whether you call it a stimulus package or not. It certainly would be one that -- it would be wise and prudent and even enlightened for the next generation of Americans because that infrastructure investment has been all but absent for the course of the past quarter century.

Thank you very much, Kitty Pilgrim. Appreciate it.