Transcript: Remarks by National Economic Council Director Gene Sperling on Obama’s FY2014 budget
Edited by Jenny Jiang
Transcript of remarks by Gene Sperling, Director of the White House National Economic Council, on President Barack Obama’s FY2014 budget. The press briefing was held on April 10, 2013.
I just want to go in a little further as to why the President’s budget plan today hits the right balance, not just in terms of revenues and entitlement savings but the right balance in terms of an economic strategy that strengthens jobs and recovery in the short-term while strengthening our long-term job creation and competitiveness.
To do that, a budget needs to hit a fiscal sweet spot, which is that it needs to at one time – an economic plan at one time needs to create confidence that you are dealing with your long-term fiscal challenges, as Jeff’s described. That gives confidence to people deciding where to make long-term investment and job creation decisions that the United States is the place that is managing its long-term fiscal challenges.
You also need to make sure you are taking measures that are strengthening the recovery and job growth, particularly when you’re still coming back from the worst financial crisis since the Great Depression.
And third, you need to make sure you are making room for the things that fundamentally make us competitive and will encourage more location of high-wage jobs in the United States in the future.
And the key thing is that these work best together.
A strong plan to jump-start job growth will not be as effective if people doubt whether you’re dealing with your long-term fiscal future.
A strong fiscal deficit plan that has contraction and austerity at a time when your recovery is still seeking to get its full momentum can be counter-productive not just for jobs and growth but counter-productive for even your fiscal forecast.
And strategy that forgets that we are competing against tough competitors around the world for where jobs and long-term investment decisions are going to be made and what those components are that make us a magnet for job creation, and if you forget that, you also fail.
So hitting the fiscal sweet spot means having an economic strategy as the President has that deals with all of these together.
Jeff has described very well how our plan adds another $1.8 trillion in deficit reduction – brings us under 2% of deficit’s percentage of GDP, extends the solvency of Medicare by 4 years.
But let me just do the other two components quickly, and then turn it over to my companion, Cecilia.
One, this plan is good for jobs right now because first of all it would take away the contractionary, anti-jobs nature of the sequester, which independent experts estimate will cost this economy from 500,000 to 750,000 jobs.
But it also makes sure that as we are doing this long-term deficit reduction plan that there is, as the President said, measures to jump-start job growth right now. And so this aspect does include key aspects from the American Jobs Act that do not have any long-term impacts on our deficit but can make sure as part of this comprehensive plan that we’re giving momentum to the recovery now.
So in addition to taking away the contraction and the job costing nature of the sequester, this still has – and I’ll just put in 3 buckets – a strong infrastructure component that is accelerated.
Even in the offer that the President gave Speaker [John] Boehner there is $50 billion accelerated of infrastructure, most of it in the President’s Fix It First initiative. In addition, the infrastructure bank measures like TIFFIA that are designed to leverage private sector capital.
Secondly, there are measure that are designed to help those communities and individuals who’ve been most hard-hit. Things like one-time $15 billion for Project Rebuild to help deal with the worst blight from the housing crisis in our country today. Or a project that Cecilia and I’ve worked together called Pathways to Work, which gives people funds to help private sector encourage those who have been the longest unemployed or the most disadvantaged to get back in the private sector jobs.
Third, components that are about training, getting people back to work. There’s a one-time tax credit for small businesses for increasing their wages in jobs this year to accelerate hiring. There’s the Veteran’s Job Corp proposal. There’s measures to encourage the re-hiring of teachers and first responders. These make most sense as part of a long-term package where this is jump-starting jobs, in a context where 10-year plan that is bringing down the deficit.
And then secondly, this plan does include – even within the deficit reduction, even within the tight budgets – things that the President believe are critical for our competitiveness, and that is, for example, a focus on manufacturing, includes our Manufacturing and Innovation Institute, which we’ve already piloted.
It includes expanding and making permanent the R&E [research and experimentation] tax credit.
It includes helping small businesses by having a $500,000 expensing provision made permanent for small businesses. It includes a long-term commitment to infrastructure and to a strong reauthorization of our highway bill.
It includes a commitment on skills. Again, our community college to careers proposal. But also a proposal that would consolidate our two major programs for displaced workers and put them together in one plan with greater accountability, with focus on results, and a focus on helping everybody regardless of how they’ve lost their job. A proposal here would mean that 1.2 million instead of 500,000 people would get intensive re-employment assistance at this critical time in our economy.
So we realize that as we are jump-starting jobs, as we are putting in long-term deficit reduction, we are also looking at what is going to make us most competitive. These are the measures together with things like corporate tax reform that could lower rates, reduce loopholes and expenditures, and still take on abuses and tax havens across this country can also be good for jobs. So this is another key part.
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