Today, the Congressional Progressive Caucus released The People’s Budget: A Raise for America, a budget alternative for fiscal year 2016. If adopted, the budget would spur job creation, boost public investment, strengthen the middle and working classes, restore fairness to the tax code, protect social insurance programs, and ensure fiscal sustainability.
According to an Economic Policy Institute Policy Center analysis by EPI economist Thomas Hungerford, The People’s Budget would boost GDP by 3.9 percent and create 4.7 million jobs in the year after its implementation. It would bring us to full employment by the end of 2017, while boosting long-run productivity growth through public investment. The budget increases near-term deficits to boost job creation, but reduces the deficit beginning in fiscal year 2017, relative to CBO’s current law baseline. The budget would achieve primary budget balance and sustainable budget deficits below 2 percent of GDP in FY2017 and beyond.
“The People’s Budget reverses the past few years of extraordinarily sharp cuts to federal spending, which have held us back from a full recovery,” said Hungerford. “It is a forward-looking, evidence-based document that would set us on track to a full, durable recovery from the Great Recession.”
Key provisions of The People’s Budget include:
- Roughly $528 billion in job creation and public investment measures in 2015 alone, and roughly $1.34 trillion between 2015 and 2017, which will rapidly reduce labor market slack and restore the economy to full health
- Near-term economic stimulus measures that would create 4.7 million jobs in 2015 and would boost employment moving forward, relative to the current baseline
- Boosting economic opportunity for all segments of the population by expanding tax credits and other programs for middle- and working-class workers, increasing public employment, and incentivizing employers to create new jobs
- Repealing sequestration cuts and spending caps that affect the Defense Department, but replacing them with similarly sized funding reductions that allow for more measured and efficient savings to be realized
- Restoring adequate revenue and pushing back against income inequality through 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