Obama's plan to cut the deficit
President Barack Obama's fiscal 2014 budget is a concrete plan to create jobs and cut the deficit. We do not need to choose between these two priorities. The president's balanced, compromise plan proves we can do both.
The plan's guiding principle is reigniting America's engine of economic growth. To make America once again a magnet for jobs, the budget invests in high-tech manufacturing, clean energy, and infrastructure, laying the foundation for more rapid business growth and ensuring that the jobs of the future are created in America. To give workers skills to compete in the global economy, it invests in education and job training, including a Preschool for All initiative to ensure children are prepared to succeed. To ensure hard work leads to a decent living, it raises the minimum hourly wage to $9 so an honest day's work pays more.
The Obama budget does all of these things as part of a comprehensive plan that cuts the deficit and puts the nation on a sound fiscal course. Every new initiative is fully paid for, adding not a single dime to the deficit.
To be clear, we have already made important progress in cutting the deficit. Over the past few years, Democrats and Republicans have cut the deficit by more than $2.5 trillion. This progress puts us more than halfway toward the goal of $4 trillion in deficit reduction that economists say is needed to put us on a fiscally sustainable path.
Now we need to finish the job. That is why the president stands by the compromise offer he made during "fiscal cliff" negotiations this past December. These proposals would achieve $1.8 trillion in additional deficit reduction over the next 10 years, bringing total deficit reduction to $4.3 trillion while replacing the damaging, arbitrary cuts of the sequester.
This deficit reduction is comprised of more than $2 of spending cuts for every $1 of new revenue from closing tax loopholes and reducing tax breaks for the wealthiest. And it takes further steps to address the largest driver of long-term deficits rising health care costs by including $400 billion in health savings that crack down on waste and fraud and strengthen Medicare for years to come.
By including this compromise offer, the president is demonstrating his willingness to make tough choices to find common ground and further reduce the deficit. This offer includes some difficult cuts that he would not propose on their own, such as an adjustment to inflation indexing requested by Republicans. But there can be no sacred cows for either party.
Importantly, the budget's deficit reduction proposals are designed to accelerate the recovery by replacing the damaging sequester and making smart investments in jobs, while protecting the most vulnerable adhering to two key principles laid out in the bipartisan Bowles-Simpson Commission proposal.
The House and Senate have now both passed budget proposals. By returning to the regular order process that members of Congress say they want, we are hopeful that a bipartisan agreement can be reached.
Our country continues to face significant fiscal and economic challenges. But they are surmountable. By working together, we have already made progress in reducing the deficit and restoring economic growth and job creation.
The president's budget provides a specific and responsible plan for continuing this progress. It shows how we can live within our means while further growing the economy, strengthening the middle class and securing the nation's future.
Jeff Zientz is the acting director of the U.S. Office of Management and Budget.