Commentary | Budget, Taxes, and Public Investment

Opposing view: Focus on jobs, not deficits

Originally appeared as an editorial in USA Today

The White House has proposed substantial specific savings under both its 2012 budget and its recently announced budget framework. President Obama‘s budget specified $2.2 trillion in deficit reduction, and his recently announced framework put forth the goal of $4 trillion in deficit reduction over 12 years.

Furthermore, last year’s health care reform was the single-largest deficit-reducing piece of legislation in over a decade, cutting deficits by more than $1.5 trillion over the next 20 years, and his budget framework further builds on those cost-saving measures.

Obama’s efforts might, in fact, be too focused on near-term deficit reduction and not enough on job growth. Cutting spending at this point serves only to suck demand out of the economy, costing jobs right at the moment when the economy is trying to regain its footing. And his proposal to reduce domestic discretionary spending over a decade, to just over half of the average level it was during the Reagan administration, threatens public investments in education and infrastructure, which are key to long-run economic growth and global competitiveness.

But it is clear that the president’s proposals, taken together, achieve real savings through spending cuts and revenue increases, and at the same time implement process reforms to ensure future Congresses remain faithful to a sustainable long-run fiscal trajectory. What is important to keep in mind with these proposals is not how specific they are, but the vision that exists behind them.

For example, the balanced budget amendment endorsed by 47 senators, and the spending cap sponsored by Sens. Bob Corker, R-Tenn., and Claire McCaskill, D-Mo., would increasingly shift costs and risk onto middle-class households and threaten economic growth through drastic cuts to public investments, while at the same time pushing more spending into the tax code.

By contrast, the president’s proposed health care reforms and revenue increases recognize that the only real deficit reduction that is both fiscally and politically sustainable over time is one that protects the health and retirement security of the struggling American middle class. The proposals that fall short of this standard are the ones that do not take America’s future seriously.

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