Today, the Economic Policy Institute released an update to Investing in America’s Economy, a budget plan that prioritizes recovery while also putting the country on a sustainable budget path.
This plan was developed as part of the Solutions Initiative and funded by the Peter G. Peterson Foundation.
The Peterson Foundation convened organizations with a variety of perspectives to develop plans addressing our nation’s fiscal challenges. The American Enterprise Institute, Bipartisan Policy Center, Center for American Progress, Economic Policy Institute, The Heritage Foundation, and Roosevelt Institute Campus Network each received grants. All organizations had discretion and independence to develop their own goals and propose comprehensive solutions. The Peterson Foundation’s involvement with this project does not represent endorsement of any plan. The final plans developed by all six organizations will be presented as part of the Peterson Foundation’s second annual Fiscal Summit in May 2011.
A statement from EPI’s Research and Policy Director John Irons on EPI’s participation in the Peter G. Peterson Foundation’s Solutions Initiative.
Today the Economic Policy Institute is participating in the Peter G. Peterson Foundation’s 2011 Fiscal Summit, as part of its Solutions Initiative. Participating in the Solutions Initiative has given Our Fiscal Security—a partnership of Demos, the Economic Policy Institute and The Century Foundation—an opportunity to share our policy ideas and philosophy on how to promote strong economic and job growth while achieving sustainable budgets.
Last November, OFS published Investing in America’s Economy: A Budget Blueprint for Economic Recovery and Fiscal Responsibility. This budget blueprint offers a path for a sustainable federal budget policy that promotes strong job growth and strengthens the middle class. EPI has adapted Investing in America’s Economy for the Solutions Initiative in a way that leaves its guiding principles unchanged.
Recognizing that our nation faces an ongoing crisis, with unemployment near nine percent and widespread economic insecurity, we believe a comprehensive approach to America’s future must focus on immediate job creation while also setting a sustainable debt path.
Our budget finances front-loaded-but-sustained investments to create jobs and promote growth; modernizes the tax code (by targeting revenue increases at high-income individuals and limiting the value of tax expenditures); protects the middle class; and strengthens health, income, and retirement security. We also adopt recommendations from the bipartisan Sustainable Defense Task Force to limit defense spending.
Our plan reaches primary budget balance in 2017—after the economy has recovered from the Great Recession—and stabilizes debt at safe levels (around 80 percent of the economy) over the next 25 years.
Fiscal responsibility does not require immediate spending cuts, as many claim, or an abandonment of efforts to strengthen the recovery. In fact, a weak economy remains the biggest threat to the fiscal health of the country.
An overview of the OFS plan’s adaptation for the Peter G. Peterson Foundation’s Solutions Initiative [PDF]
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In November 2010, Demos, EPI and The Century Foundation produced a budget blueprint for economic recovery and fiscal responsibility. The blueprint prioritizes a strong economic recovery because widespread job creation and robust economic growth are essential to successful deficit reduction. Investing in America’s Future is a project of Demos, EPI and The Century Foundation. More information is available at www.ourfiscalsecurity.org.
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Press Release [PDF]
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Executive Summary
The full Executive Summary is available in the PDF above or as a separate PDF here.
Today, the United States faces grave economic problems. Some arose from the recession that began in 2007. Others are part of a long-term trend toward inequality and insecurity that pre-dated the immediate crisis. Currently, nearly one in 10 workers is unemployed. Millions of families that have jobs have exhausted their savings and are living paycheck to paycheck. Worried about job security and incomes, families have cut back on spending, putting further downward pressure on the economic recovery. Even very low interest rates have not induced banks to lend or businesses to invest because of a lack of overall demand.
In this context, the country is having a serious national debate about the best path to restore economic growth and shared prosperity – and the relationship of that core economic challenge to the need for better fiscal balance. The issues include the timing and composition of spending and taxing decisions. If we choose the right path, we can accelerate recovery. But the wrong approach could deepen the slump, inflict more economic pain on families, and make it more difficult to restore fiscal balance.
The federal budget is more than a bunch of numbers in a ledger in an office in Washington D.C. The federal budget represents one of the most concrete and measurable embodiments of the nation’s values and priorities. As a nation, the American people value hard work and responsibility. We know that we must all work hard to succeed, and we trust that our fellow citizens – our family and friends, our neighbors, and communities – will do so as well. We ask much of each other: that we be informed voters, that we are responsible consumers and business leaders, and that we pay our fair share of taxes. It is all part of the nation’s social compact. Budgetary decisions help to secure that social compact: they can offer solutions to national problems, create economic security for those in need, and expand opportunities for millions.
