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EconomicPolicyInstitute March 30, 2012

On Wednesday, the Economic Policy Institute released The Budget for All: A technical report on the Congressional Progressive Caucus budget for fiscal year 2013, a comprehensive explanation of the composition and impact of the Congressional Progressive Caucus (CPC) budget alternative for fiscal year 2013. EPI federal budget policy analysts Andrew Fieldhouse and Rebecca Thiess provided the technical support for the budget, which was released by the CPC earlier this week.

The Budget for All addresses our most pressing immediate issue, the ongoing jobs crisis, by financing $2.9 trillion in job-creation measures and public investments over 11 years (relative to current law). It would also strengthen economic security programs, realign spending by the Department of Defense to domestic priorities, and finance government responsibly over the long run with progressive revenue sources that place our nation on a sustainable fiscal trajectory. Finally, it would make no cuts to social insurance programs and responsibly phase out the costly and regressive Bush-era income tax cuts for filers in the top four tax brackets, while protecting working families.

“The Budget for All proves that there is a sensible, credible alternative to the draconian vision Rep. Paul Ryan presents in his budget, and it stands in stark contrast to the policies outlined in that document,” said Thiess.

“This budget demonstrates that we can pursue job creation and robust investments while promoting fiscal sustainability. It suggests that those demanding austerity and the dismantling of government are exploiting the economic downturn to promote an agenda that aids the wealthy on the backs of the 99 percent,” added Fieldhouse.

EPI President Lawrence Mishel extolled the scope and vision of the Budget for All in a separate commentary released Wednesday. The Budget for All “offers a stark contrast and credible alternative to the misguided budget proposed by House Budget Committee Chairman Paul Ryan,” wrote Mishel. It “demonstrates that it is possible to be ‘fiscally responsible’ and provide sound economic stewardship, protect the middle class, and provide upward mobility,” he added.

EPI’s analyses of the Congressional Progressive Caucus’ Budget for All and the House Republican budget have already received national media attention, appearing in the New York Times, Huffington Post, and Think Progress.

  • From the New York Times’ “You’re the Boss” blog: “House Republicans, led by Representative Paul D. Ryan, introduce a budget proposal that includes cutting personal income taxes. Here are the highlights. One tax expert says it’s ‘smoke and mirrors’ and would increase the deficit. … [EPI’s] Ethan Pollack says the proposal would cost jobs.”
  • And Think Progress: The House Republican budget “increases deficits and drives up the national debt…despite the gigantic spending cuts that Ryan has in mind, which would eviscerate the social safety net and non-defense discretionary spending (even while the budget increases defense spending). As the Economic Policy Institute noted today, the plan Republicans adopted would drive discretionary spending down to its lowest level in more than 50 years.”

Ryan’s budget would cut domestic discretionary spending to record-low levels

The non-defense discretionary portion of the federal budget includes security spending; safety net programs; most of the funding for the enforcement of consumer protection, environmental protection, and financial regulation; and practically all of the federal government’s civilian public investments. The current level of domestic discretionary spending is 4 percent of GDP, about equal to the historical average since the early 1960s. This week’s Economic Snapshot illustrates that Wisconsin Rep. Paul Ryan’s budget implements massive cuts to the domestic discretionary budget, bringing it to 2.1 percent of GDP, the lowest level in more than 50 years.

Institutions that support U.S. jobs should be strengthened, not gutted

Robert Scott, EPI director of trade and manufacturing policy, and Owen Herrnstadt, International Association of Machinists and Aerospace Workers director of trade and globalization, co-authored a guest commentary for the Huffington Post explaining the need to continue funding the U.S. Export-Import Bank, which will reach its borrowing capacity on May 31.The U.S. Export-Import Bank helps finance the export of U.S. goods and services that support jobs here at home and is one of the few federal institutions that exist to make it easier for U.S. exporters to compete in foreign markets.

While many agree that the Bank should be funded, some conservative critics oppose increasing its borrowing limit, claiming its financing distorts markets. Scott and Herrnstadt contend that if these criticisms are heeded and the U.S. refuses to renew the Ex-Im Bank and increase its borrowing cap, U.S. export sales will go to other countries. Another opponent, Delta Air Lines, claims that the Ex-Im Bank financing for aircraft sales puts it at a disadvantage relative to foreign airlines. Scott and Herrnstadt explain why this claim misses the mark.

Given the fragile economy and the need to create millions of manufacturing jobs, it makes more sense to finance Delta’s purchase of domestic aircraft than to unilaterally disarm and let foreign firms have a sales advantage.

EPI welcomes four new board members

EPI is proud to announce four new members to its Board of Directors. The new members include Rep. Keith Ellison (D-Minn.), Donna Lenhoff (Senior Civil Rights Advisor at Office of Federal Contract Compliance Programs, Department of Labor), Wilma Liebman (former Chair of the National Labor Relations Board), and Roger Smith (CEO and President of American Income Life). EPI is thrilled to continue working for America’s families with the help and guidance of such esteemed leaders.

EPI in the news

EPI immigration policy analyst Daniel Costa’s research on the many problems with guest-worker programs continues to be a critical resource for government officials and reporters, appearing in In These Times, InformationWeek, and ComputerWorld.

  • In a recent letter to United States Citizenship and Immigration Services Director Alejandro Mayorkas, Costa, along with EPI research associate Ron Hira, called into question many multinational corporations’ appeal to hasten the process of attaining L-1 visas for their workers. The letter explained the negative impacts the L-1B visa can have on the U.S. labor market and on the wages and employment prospects of U.S. workers in high-tech occupations. Costa told ComputerWorld’s Patrick Thibodeau and Sharon Machlis that the misuse of the L-visa program is currently legally permissible, and is “operating at the expense of American workers.”
  • To In These Times’ Michelle Chen, Costa explained how the lax oversight of the J-visa programs has led to the exploitation of many workers, specifically young workers in the Summer Work Travel (SWT) program.Chen writes: “Normally, workers in other temporary labor programs are at least on paper guaranteed a prevailing wage, to keep migrant labor from undermining wages and worker protections. But Daniel Costa of the Economic Policy Institute told In These Times, ‘The SWT program has none of those requirements at all – which although [they] are minimal and inadequate – are at least lip service to the interest of protecting wages from being depressed, and in terms of letting unemployed U.S. workers have the first opportunity to take an unskilled job.’”
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