WASHINGTON–(ENEWSPF)–February 1, 2010. House Budget Committee Chairman John Spratt (D-SC) made the following statement today on the President’s budget for Fiscal Year 2011.
“Our economy began backsliding into recession in December 2007, one full year before President Obama took office. Within weeks after President Obama was inaugurated, his Administration and Congress approved a large recovery bill to get the economy moving.
“The Recovery Act added to a deficit already swollen by recession and the Bush Administration’s budgets and bail-outs. But according to the Congressional Budget Office, in the second half of 2009, the Recovery Act raised real GDP by 1.3% to 3.5%.
“In the last quarter of 2008, the economy shrank by 5.4% and 741,000 workers lost their jobs in January 2009 alone. In the last quarter of 2009, the economy grew by 5.7%, and job losses averaged 69,000 a month.
“The Obama Administration has realized from the start that it will be impossible to bring the deficit down unless the economy is up. The budget the President is sending Congress today puts a priority on those objectives. It keeps one eye on the economy and the other on the deficit.
“We have brought the economy back from the brink, but too many Americans are still feeling the recession and not the recovery, and no one can be satisfied when unemployment nationwide averages 10% and in many places is worse.
“The President’s budget keeps an eye on the bottom-line. The deficit is cut by half, from $1.556 trillion in 2010 (10.6% 0f GDP) to $727 billion (4.2% of GDP) in 2013. The budget continues to bring the deficit down, until it reaches 3.9% of GDP in 2014. The President also proposes a bipartisan fiscal commission to develop proposals to bring the deficit down further.
“At the same time, the President’s budget funds additional initiatives to spur job creation – such as tax credits for small businesses that hire new workers. And the emphasis is on Main Street rather than Wall Street. The budget freezes non-security discretionary spending overall, but singles out priorities like education for funding increases well above a freeze.
“A three-year freeze on non-security discretionary spending and a bipartisan fiscal commission are concrete commitments on the President’s part to bringing down the deficit, even if additional steps will be needed.
“We proved in the 1990s that it is possible to reduce deficits responsibly, but it cannot happen without concerted effort. Later this week, the House of Representatives will take a step in the right direction by voting to reinstate a statutory Pay-As-You-Go system modeled on the rules that helped turn record deficits into record surpluses in the 1990s.
“On both the budget and the economy, there are hard choices ahead of us, but the budget sent up by the President today marks one more step toward moving the economy up while bringing the deficit down.”