President Obama and the Democratic Congress have inherited the worst and most complex economic crisis in generations. Eight years of misguided policies and misplaced priorities have taken our economy from prosperity to recession and made life for working families less affordable and less secure. While the American people know the road to a full, sustainable recovery is long, they took the first step by tasking President Obama and the Democratic Congress with the responsibility to realign Washington’s priorities with those of the American people and getting our economy working again.
The 111th Congress took the next steps in February by passing an economic recovery package that creates jobs, cuts taxes for the middle class, and invests in the future. Though we are confident that this will boost our economy, there is far more work to be done. Next on the agenda is passing a responsible budget that will serve as the blueprint for a prosperous future.
The budget being unveiled today by Senator Conrad, Chairman of the Senate Budget Committee, will:
· Make critical investments in our future by investing in renewable energy, education, and health care;
· Cut taxes for hardworking, middle-class families; and
· Take an honest look at our budget and cut the deficit in half over four years.
As the full Senate prepares to consider the budget next week, we ask our Republican colleagues to work with us in a bipartisan manner to reject the mistaken policies and priorities that caused the economic crisis and embrace a budget that reflects the priorities of the American people and puts our nation on the path towards prosperity once again.
Investing in Our Future
Powering Our Economy with Clean Energy
Our nation has been burdened for far too long by an energy policy that has hindered economic growth and sustainable job creation, jeopardized our national security, and profoundly affected our environment. That’s why our budget supports significant investments in energy efficiency and renewable energy and takes an important first step in developing an economy-wide greenhouse gas emissions reduction program.
Specifically, our budget:
· Calls for new investments in energy efficiency and clean renewable energy. The opportunity exists for major advances in our nation’s use of energy and development of renewable energy, which can help put our economy back on track, improve our energy security, and make America the engine of innovation in the 21st Century.
· Relies on sparking American ingenuity to address our reliance on oil. Despite recent decreases in the price of oil, the nation is dangerously dependent on oil, especially foreign oil. We can reduce our reliance on oil by accelerating the development of advanced biofuels, clean alternative fuels, and building hybrid and hybrid electric vehicles.
· Supports a significant investment in clean energy technologies. With strategic investments in research and development, we can lead the world in the development of technologies and products that will create jobs and address the country’s enormous economic, environmental, and security challenges.
· Builds upon the $67 billion* in clean energy investments made in the American Recovery and Reinvestment Act. The budget supports new funding for energy efficiency, solar, biomass, wind, and geothermal energy resource development, as well as modernizing the nation’s electricity grid, and carbon capture and sequestration.
· Continues progress toward the goal of weatherizing one million homes annually. This will save energy consumers billions of dollars every year and reduce greenhouse gas emissions.
*Calculated by the Congressional Research Service, "Energy Provisions in the American Recovery and Reinvestment Act of 2009 (P.L. 111-5).
Modernizing Our Education System
A high-quality education is the key to success in today’s global marketplace. Our budget recognizes that to maintain our competitiveness in the world economy, our students need to be equipped with the tools necessary to succeed in the 21st Century. This includes learning opportunities that extend from the earliest stages of life through adulthood, when many Americans find themselves in need of retooling their skills to meet the demands of a new economy. We also understand that it is more important than ever that our students graduate from high school and continue to advance their education in college. Unfortunately, the average cost of attending a public, four-year institutions has risen dramatically since 2001, and the rising costs of education have been compounded by the economic downturn which has depleted families’ savings and threatened the possibility of higher education for many students. The budget addresses these critical needs by providing our students with the proper support and resources.
Specifically, our budget:
· Expands early childhood education. Numerous studies show that children who participate in early education programs are more likely to graduate from high school and more likely to secure a job. The budget includes new initiatives to ensure that childhood education programs continue to produce good results for children.
· Strengthens standards, supports effective teaching and invests in innovative programs. The Democratic budget recognizes that global competition requires increased skills by assisting states in increasing their standards to better prepare our students. To meet these standards, our budget will invest in programs to reward high-performing teachers, assist those in need of more effective approaches, and develop strategies to recruit, evaluate and support teachers.
· Accommodates the President’s proposal for student aid. As the cost of attending college has risen, our assistance to students and their families has not matched the need. The budget supports a $5,550 maximum Pell Grant award and accommodates the President’s student aid proposals. Changes are needed to address the reality of the increasing cost of higher education, and the need to secure funds for families struggling to keep up with the costs.
Making Quality Healthcare Affordable
Every American deserves affordable, high-quality health care. Unfortunately, families and businesses are overwhelmed by the skyrocketing costs of health care. The cost of family health insurance has dramatically increased by nearly 80 percent since 2001, compared with a 24 percent increase in overall inflation. Over the past eight years, the number of uninsured Americans has increased by 6.9 million to 45.7 million Americans without the benefits of health care coverage. As unemployment grows, more families will find themselves without affordable health care and unable to maintain coverage. Some will discover that they are unable to afford the high premiums because of pre-existing medical conditions. We understand the complex nature of our health care crisis, and this budget addresses the myriad problems with the health care system.
Specifically, our budget:
· Supports health care reform. To stabilize our economy, we must reform health care and help middle-class families and businesses struggling to pay for the rising costs of care. Our budget will facilitate health care reform legislation which will lower the cost and improve the quality of health care for every American.
· Expands access and modernizes health information technology. Investments in health information technology (IT) have the potential to save billions of dollars by reducing health care costs and improving the quality of care for all Americans. The budget will help promote the adoption of health IT so doctors can seamlessly and efficiently provide high-quality care to their patients.
· Creates more jobs for health care professionals to meet the growing needs of our aging population. Medical professionals are in high demand and short supply. This problem is likely to become worse as medical personnel reach retirement age, and the aging population demands increased care. The budget supports loan repayment programs for doctors, nurses, and dentists who decide to practice in underserved communities, and supports nursing schools to increase the number of students earning nursing degrees.
· Invests in critical research to cure cancer. Our budget will strengthen cancer research, enabling scientists to develop innovative tests, treatments and cures as they encourage prevention, early detection and effective treatments that save lives.
· Expands access to underserved communities. Some communities do not have the proper resources to promote and support healthy lives. This budget accommodates expanding access to health care services for American Indians and Alaska Natives with an emphasis on improving health outcomes and healthy communities. Investments are also made to improve access to health care in rural areas. These initiatives will encourage regional and local partnerships between health care providers, expand prevention programs, and support the modernization of health care infrastructure.
Giving the Middle-Class a Tax Cut
Middle-class families are being squeezed between prices that are rising and incomes that are not. Our budget strengthens the middle class so those individuals and their families can reap the benefits of their hard work. First and foremost, this budget cuts taxes for working families and ends the irresponsible Bush tax giveaways to multimillionaires. Our budget also makes it easier for families to send their children to college and save for retirement. And, for those families whose ingenuity and entrepreneurship fuel our economy, our budget would eliminate capital gains for small businesses.
Specifically, our budget:
· Extends the middle-class tax cuts that expire in 2010. The budget makes permanent the 2001 and 2003 tax cuts that were targeted on middle-income taxpayers, including marriage penalty relief, the 10-percent bracket, and the $1,000 child tax credit. It also extends other provisions for families with incomes under $250,000, as proposed by President Obama.
· Helps those who need it most. The budget would make permanent the expansions of the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), enacted as part of our economic recovery package. The EITC expansion increases the credit for families with three or more children and provides additional relief for low-income married couples, while the CTC expansion lowered to $3,000 the income threshold for eligibility for a refundable credit.
· Makes it easier for families to send their children to college. The budget proposes to make permanent the American Opportunity Tax Credit, which was enacted as part of our economic recovery package. This tax credit expands the Hope Credit, increasing the credit amount to $2,500 and making it available for four years; in addition, a portion of the benefit is available to those with no income tax liability.
· Boosts workers’ savings. The budgetprovides for automatic enrollment in IRAs and 401(k) programs, and expanding tax credits that reward saving for retirement. The budget proposals would expand the "saver’s credit," including making it fully refundable; and require employers that do not offer 401(k)s to offer automatic enrollment in IRAs, allowing employees to contribute through payroll tax deductions.
· Protects middle-class families from falling into the web of the Alternative Minimum Tax. The budget protects millions of middle-class families from being hit by the alternative minimum tax for the next three years, a tax originally intended to apply only to the very wealthy.
· Supports small businesses. Thefinancial crisis is threatening the viability of America’s small businesses. Even if they have healthy balance sheets and operations, family-run companies and other small firms are faced with restricted access to credit and skyrocketing health care costs. This budget provides an incentive for investment in small businesses to help create jobs and turn our economy around by providing for the elimination of all capital gains taxes on investments made in small and start-up businesses. It also calls for making permanent the current expensing rules for small businesses.
Budgeting Honestly and Responsibly
We understand that every dollar we spend belongs to the taxpayers. The American people deserve to know where their money is going so that they can hold their elected leaders accountable.
After eight years of runaway-spending based on the irresponsible policy choices of the Bush Administration, our budget will cut the deficit we inherited in half by the end of President Obama’s first term in office. In that short time, the budget deficit will go from comprising more than 12.2 percent of our GDP in 2009 to 2.9 percent in 2014. This budget is a sharp reversal of previous policies that were characterized by loose oversight and weak enforcement, rife with risk, and that resulted in unprecedented debt.
By contrast, this budget outlines savings for future generations by reducing how much we borrow to spend on the war in Iraq, reforming our health care system, getting rid of ineffective programs, and ending the irresponsible tax giveaways for multimillionaires and companies that ship jobs overseas. By moving away from the previous Administration’s use of supplemental requests, this budget will restore transparency and accountability to spending on the wars in Iraq and Afghanistan. The Democratic budget includes a war funding request that is separate, but alongside the base defense budget request, in order to ensure effective oversight of these funds and save defense resources.
The smart investments we make today will lay the foundation for future economic growth, lower the high costs of health care, help reduce our dependence on oil, create millions of clean-energy jobs that cannot be outsourced, and ensure all of our children get a world-class education so they can compete and succeed in the global economy.
After eight years of misguided spending and misplaced priorities, Democrats understand that every dollar we spend belongs to the taxpayers. With a renewed commitment to fiscal discipline, our budget will address our nation’s long-term economic challenges and usher in a new era of responsibility.