Washington, D.C. — Today, following the release of President Barack Obama’s proposed budget for fiscal year 2015, the Center for American Progress released a report detailing how the president’s budget moves away from the misguided focus on austerity and debt and instead sets an agenda that will promote economic growth and opportunity.
“President Obama’s budget focuses the political conversation on growing the economy and creating jobs. It invests in infrastructure, education, and research and heeds the calls of conservatives and progressives to expand the Earned Income Tax Credit,” said Harry Stein, Associate Director of Fiscal Policy at the Center for American Progress and author of the report. “After years of misguided austerity policies, the president’s budget is shifting the debate to put the economy first.”
Despite mounting evidence that austerity-driven policies are destructive for the economy, a single-minded focus on debt reduction has dominated budget debates in recent years. In 2013, the Center for American Progress called for resetting the fiscal debate, arguing that our economic challenges were more pressing than our fiscal issues. Federal debt projections had greatly improved over the past few years, while the economic outlook had grown worse. Countries around the world that embraced austerity policies saw disappointing economic results—including the United States—and the academic arguments for austerity fell apart upon closer inspection.
Meanwhile, the political gridlock created by debates over long-term debt shifted focus away from the economy and led directly to economically destructive policies. As highlighted in the report, Congress was not alone in this misguided approach; the White House also allowed unsuccessful negotiations on long-term debt to overtake their economic agenda during the debt limit standoff in 2011.
However, the budget proposed today by President Obama helps to reset the fiscal debate by placing a greater emphasis on job creation and expanding economic opportunity over debt reduction. Several key components of the president’s budget—including expanding the Earned Income Tax Credit; increasing the nation’s commitment to critical economic sectors such as research, job training, and education; and upgrading the country’s sorely neglected infrastructure—are an investment in working Americans that will pay dividends for years to come.
Although the president’s ability to set economic policy is severely limited by Congress, which has repeatedly blocked many of his initiatives, President Obama’s new budget will shift the political conversation toward our most urgent national problem: creating jobs and growing the economy.