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Statement On the President’s Budget For Fiscal Year 2012

President Obama today released his administration’s proposed budget for fiscal year 2012.  The president’s top economic priority should be job creation, but the proposed budget does too little and turns too quickly toward deficit reduction. The economic context –unemployment at or above 9% for 21 months, unemployment that is expected to remain elevated for years – demands a stronger response. 

See also:

An analysis of the budget cuts

An analysis of the public investments

An analysis of tax policies

The president’s budget does contain some needed investments that would spur job creation in the short-term and economic growth in the long-run. For example, the president’s commitment to expanding wireless broadband, high-speed rail, and energy-efficiency research and deployment would provide additional jobs and stimulate broader economic activity.

Unfortunately, the funding increases in these and other areas, while welcome, are insufficient to put a major dent in unemployment. Furthermore, the overall freeze in domestic discretionary spending all but ensures that the fight to create jobs and ensure future economic growth will be limited.

The president’s budget, though severely flawed, is far better than alternatives supported by many in Congress – a low bar, indeed. Proposals to blindly reduce spending by $100 billion annually or to automatically cap the overall level of spending would be enacted at a severe cost to jobs and economic growth well into the future.

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