President Barack Obama’s top economic adviser pushed Congress to approve “win-win” solutions that would further economic growth at a UW-Madison lecture Monday night.
Jason Furman, chairman of Obama’s Council of Economic Advisers, said Congress should invest in infrastructure at today’s low borrowing rates, reform the tax code, approve an immigration reform bill projected to cut the deficit and agree on long-term debt reduction, instead of implementing short-term cuts like sequestration that impede economic growth.
“The biggest challenge is not figuring [solutions] out, but figuring out how to get them done in Washington the way it functions today and working together with Congress to actually follow through on them,” Furman said.
Furman criticized states, including Wisconsin, who have turned down the Medicaid expansion that would “cover families for free” until 2016. He also touted projections that Obama’s health care law would reduce the deficit by slowing health care costs and making reforms in health care that cut federal spending and increase revenues.
The budget deficit shrank from 9.8 percent of GDP in 2009 to 4.1 percent of GDP last year, the fastest decline since WWII and one that has created a “real challenge” for economic growth, he said. He added the long-term debt challenge is manageable thanks to Affordable Care Act deficit reduction, recent spending cuts and the revenue increases that came from returning high-income tax rates to 1990s levels.
Although he said there is much work left to do, Furman highlighted the 7.8 million jobs the private sector has created in 44 straight months of job growth and the cut in the unemployment rate to the current 7.3 percent rate, although he said that is still “higher than it should be.” He credited much of the progress to the 2009 stimulus package that prevented a “second Great Depression.”
Furman also cited research that the United States has recovered at a much faster pace than other countries from the financial crisis.
“But grading on a curve, understandably, provides little comfort for Americans struggling to find a job, worried about their family’s income or having a hard time paying their mortgage,” Furman said. “That’s why we’re not putting a ‘mission accomplished’ banner up and are working so hard to continue that progress.”
To address “staggering” inequality, he said, the federal government must protect social programs from cuts, including the nearly $40 billion in food stamps cuts the House passed. He also said the benefits from a modest increase in the minimum wage, such as higher productivity, would outweigh the higher costs of hiring.
Furman spoke at the Wisconsin Institutes for Discovery and was introduced by UW- Madison Chancellor Rebecca Blank, who until recently was the former acting U.S. commerce secretary and worked with Furman during the Clinton administration.
— By Polo Rocha