This week, the House and Senate passed the Fiscal Year 2010 Budget Resolution, setting key national priorities and approving an economic blueprint for job creation and recovery from recession. The budget represents the strong conviction that America can remain globally competitive only if it reforms its costly health care system, builds its clean energy economy and energy independence, and creates the best-prepared workforce in the world. The resolution passed this week makes important steps toward all of those goals, while putting us on the path to a fiscally sound future by cutting our deficit by nearly two-thirds by 2013 and even further by 2014, to 3.0 percent of GDP.
Just as significantly, the adoption of a budget resolution this week shows Democrats’ commitment to restoring the budget process. Under Democratic leadership, a budget resolution has been passed every single year – three years in a row. This is a feat only once accomplished this decade by our Republican colleagues. By having regular budgets, we are clearly setting forward our priorities and making the hard choices necessary to begin moving our nation’s finances back to balance.
Investments for the Future
The budget makes needed investments in areas critical to our nation’s long-term economic growth: health care reform, clean energy, and education. Only by investing in these areas will our nation be equipped to face the challenges of today and ensure a more prosperous tomorrow. The budget builds on the job-creating American Recovery and Reinvestment Act with essential investments that will grow our economy and create jobs in a number of key sectors.
Healthcare Reform —Family premiums have more than doubled since 2000, and over the past five years, our total health care spending has increased at more than twice the rate of inflation, consuming more of our economy and our budget each year. The budget makes a significant down-payment on healthcare reform, beginning the process of reducing costs, expanding coverage to America’s 45 million uninsured, and improving quality, while preserving the choices patients have of doctors and health care plans. The budget also allows health care reform to pass under the process of budget reconciliation, which guarantees a fair up-or-down vote—not as an option of first resort, but as a fallback only if partisanship blocks progress on this vital priority.
Clean Energy — The budget strengthens America’s clean energy economy and increases our energy independence and security. It reflects the investments made in the American Recovery and Reinvestment Act, which included $39 billion in funding and $20 billion in tax incentives for projects including a modernized electric grid, renewable energy generation, energy efficiency, and clean energy jobs. The budget also increases funding for energy programs by 10%, expanding cutting-edge research in new energy technologies.
Education — The Recovery Act made significant investments in education by providing about $100 billion for the Department of Education, additional funding for Head Start, and a new tax credit to help cover college costs. The budget builds on that base with further support for early childhood education, high standards and the tools to achieve them for elementary and secondary school students, and efforts to help more Americans obtain a college degree. To help more Americans attend college, the budget provides enough funding to raise the maximum Pell Grant award to the highest level in its history.
Fiscal Responsibility and More Realistic Budgeting
After the Bush Administration turned a $5.6 trillion projected surplus into record deficits, this budget puts us back on a fiscally sustainable path. It cuts the deficit from 10.5% of GDP in 2009 to 3.5% of GDP in 2013—by nearly two-thirds. It accomplishes these savings by restraining spending, paying for its investments, and supporting oversight that saves taxpayer money. Most importantly, the budget includes a commitment to statutory PAYGO, the principle that our government must pay for what it buys, which was instrumental in building surpluses under the Clinton Administration.
Budget reconciliation is a commonly used part of the budget process that is designed to facilitate implementation of the policies in the budget resolution, particularly those that involve tough choices to enforce fiscal discipline. As the bipartisan Concord Coalition points out, “The budget reconciliation process was used in 1997, 1999, 2000, 2001, 2003, and 2005 to reduce taxes (as opposed to deficit reduction). Moreover, a case can be made that health care reform—that includes spending restraints and squeezes inefficiencies out of the system—is integral to reigning in the rapid growth of health care costs which is a major driver of deficits.” Reconciliation is included in the budget as an option of last resort, to ensure that the policies Americans voted for in November have a fair chance to be considered.
The budget’s priorities are the priorities Americans called for in 2008. Enacting those priorities will put us back on the right track, as we work to emerge from this recession as a stronger country with a healthier fiscal future.