For Immediate Release
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The Progressive Caucus Budget is the Road Map to a More Equal Economy
WASHINGTON - An EPI Policy Center analysis of the Congressional Progressive Caucus’s The People’s Budget: A Roadmap for the Resistance, a budget alternative for fiscal year 2018, shows that the budget would raise incomes and put the United States on a path to a fairer, more equal economy. The fiscal boost provided by the People’s Budget would increase GDP by 2 percent and create 2.4 million jobs over the first two years of its implementation, as long as the Federal Reserve didn’t increase interest rates in response. It would bring us to 4 percent unemployment while boosting long-run productivity growth through public investment. The budget would increase near-term deficits to boost job creation, but reduce the deficit in 2019 and beyond.
”Increased public investment in infrastructure, child care, and green manufacturing would create jobs and lead to a more equal economy.” said EPI budget analyst Hunter Blair. “The People’s Budget offers a child care and early childhood education solution that will not only ease family life in this country, but will also boost the wages of child care workers. Because this budget invests about one trillion dollars in child care, lower income families will have the same opportunities as wealthier families.”
Blair noted that the CPC budget always has included a bold proposal to boost infrastructure spending and that is true again in this year’s People’s Budget, which increases infrastructure investment to around two trillion dollars.
The EPI Policy Center analysis finds that The People’s Budget would have significant, measurable, and positive impacts. Specifically, it would:
Finally complete the economic recovery. The People’s Budget would increase economic and employment growth, boosting GDP by 2 percent and employment by 2.4 million jobs in the near term. This would both close the Congressional Budget Office (CBO) estimate of the output gap and (if the Fed accommodated) achieve genuine full employment, with the unemployment rate falling to 4 percent.
Make necessary public investments. The budget finances roughly $281 billion in job creation and public investment measures in calendar year 2017 alone and roughly $710 billion over calendar years 2017–2018, which would rapidly reduce labor market slack and restore the economy to full health. Further, the budget continues strong public investments even after full employment is achieved, which would help reverse recent declines in productivity growth.
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Provide affordable child care. The budget ensures families are able to afford high-quality child care and early education for their children. Families would not have to pay more than 10 percent of their income for child care. The budget also addresses the unacceptably low wages childcare workers receive by creating a payment structure to ensure these workers a living wage.
Facilitate economic opportunity for all. By expanding tax credits and other programs for low- and middle-wage workers, boosting public employment, and offering incentives for employers to create new jobs, The People’s Budget aims to boost economic opportunity for all segments of the population, including those left out of the current recovery.
Strengthen the social safety net. The People’s Budget expands and extends emergency unemployment benefits and increases funding for education, training, employment, and social services as well as income security programs and proposes benefit enhancements, not cuts, in social insurance protections.
Smartly cut spending. The budget focuses on modern security needs by repealing sequestration cuts and spending caps that affect the Defense Department, but replacing them with similarly sized funding reductions that are less front-loaded and will allow more thoughtful cuts.
Increase tax progressivity and adequacy. The budget pushes back against income inequality by adding higher marginal tax rates for millionaires and billionaires, equalizing the tax treatment of capital income and labor income, restoring a more progressive estate tax, eliminating inefficient corporate tax loopholes, levying a tax on systemically important financial institutions, and enacting a financial transactions tax, among other tax policies.
Reduce the deficit in the medium term. The budget increases near-term deficits to boost job creation, but reduces the deficit in fiscal 2018 and beyond relative to CBO’s current law baseline. In later years the budget reduces the ratio of debt to GDP when the economy is at full employment.
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The Economic Policy Institute, a nonprofit Washington D.C. think tank, was created in 1986 to broaden the discussion about economic policy to include the interests of low- and middle-income workers. Today, with global competition expanding, wage inequality rising, and the methods and nature of work changing in fundamental ways, it is as crucial as ever that people who work for a living have a voice in the economic discourse.