Foundation for Growth 3.13.13 (1)

7/29/2019 Foundation for Growth 3.13.13 (1)

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1TableofContents

FoundationforGrowth:

RestoringthePromiseofAmerican

Opportunity

TableofContents

TableofContents................................................................................................................................... 1

ALetterFromSenateBudgetCommitteeChairmanPattyMurray...................................... 4

FoundationforGrowth:RestoringthePromiseofAmericanOpportunity...................... 7

ALookBack:ThePathtoTodaysChallenges........................................................................... 10Budgetdeficitsintheearly90s:WetackledthischallengeresponsiblyduringtheClintonyearswhilecreatingmillionsofnewjobs.........................................................................................................................................................................................12

Thosegainswerereversedoverthefollowingeightyears............................................................................................................13

Fouryearsfightingtoturntheeconomyaround................................................................................................................................14

Wehavemadeprogress,butmiddleclassfamiliescontinuetostruggle..................................................................................15

Investinginjobs,longtermeconomicgrowth,nationalcompetitiveness,andprosperitybuiltfrom

themiddleout...................................................................................................................................... 17Oureconomictheory:Prosperityiscreatedfromthemiddleout...............................................................................................19

Replacingsequestrationinabalancedandresponsibleway.........................................................................................................21

Puttingtheeconomyfirstwithatargetedinfrastructureandjobspackage...........................................................................23

Investinginourfamilies,workers,andsmallbusinessowners...................................................................................................25

Investingineducationandaskilledworkforce........................................................................................................................................................25

Investinginsmallbusinessowners................................................................................................................................................................................34

Investinginmiddleclassfamiliestryingtobuyahome.......................................................................................................................................36

Investinginourinfrastructuretolaydownastrongfoundationforlongtermgrowth....................................................39

Investingintransportationinfrastructure.................................................................................................................................................................39

Investinginbroadband.......................................................................................................................................................................................................44

Investinginourpowergridandnationalenergyinfrastructure.....................................................................................................................46

Investinginourwaterandcommunityinfrastructure.........................................................................................................................................47

Investinginresearch,innovation,healthcare,andkeyindustriesthatwillgrowandcreatejobs...............................49

Universityresearch................................................................................................................................................................................................................49

InvestinginscienceR&D.....................................................................................................................................................................................................50

Investinginlifescienceresearch.....................................................................................................................................................................................50

InvestinginR&DattheDepartmentofDefenseandtheVA...............................................................................................................................51

Investingincleanenergyjobsand21stcenturyenergyproduction...............................................................................................................52

Investingindomesticbridgeenergyresources........................................................................................................................................................53

Investingin21stcenturymanufacturing.....................................................................................................................................................................53

Investinginexportsandinternationalcompetitiveness......................................................................................................................................54

Investinginthemiddleclassthroughtargetedandefficienttaxcuts...........................................................................................................55


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2TableofContents

Tacklingourdeficitanddebtresponsibly................................................................................. 56Bipartisanagreementondeficitreductiongoal:$4trillion............................................................................................................58

TheGoal:$4trillionindeficitreductionoverthenexttenyears.....................................................................................................................58

Whatwehavedoneinthelasttwoyears:$2.4trillion,mostlyfromspendingcuts................................................................................58

Responsibledeficitreductiontocrediblystabilizethedebtasashareoftheeconomy........................................................................60

Reducingthedeficitwhileincreasingthefairnessandefficiencyofthetaxcode.................................................................61

Whythe

revenue

discussion

is

not

over

........................................................................................................................................................................

62

Theneedfortaxreform.......................................................................................................................................................................................................64

Spendingindisguise..........................................................................................................................................................................................................64

Inefficienttaxexpendituresareadragoneconomicgrowth............................................................................................................................65

TaxexpendituresdisproportionatelybenefitthewealthiestAmericans......................................................................................................65

Reducing the deficit by limiting or reforming unfair tax breaks for the wealthy..........................................................................................66

Reducingthedeficitbyeliminatingwastefulbusinesstaxloopholes.............................................................................................................66

TaxreformprinciplesintheSenateBudget...............................................................................................................................................................67

Additionalresponsiblesavingsacrossthefederalbudget..............................................................................................................69

Reducinghealth

care

costs

responsibly

while

preserving

and

protecting

programs

for

seniors

and

families

............................

69

Reducingdefensespendingresponsibly.......................................................................................................................................................................72

Responsiblespendingcutsacrossthefederalbudget............................................................................................................................................77

Keepingthepromisesmadetoourseniors,families,andcommunities......................... 80Keepingthehealthcarepromisesmadetoseniorsandfamilies.................................................................................................81

PreservingandprotectingMedicareforseniorstodayandinthefuture....................................................................................................81

EnsuringAmericansofallageshaveaccesstoaffordablehealthinsurancecoverageandcomprehensivehealthcareservices........................................................................................................................................................................................................................................82

Womenshealthcareandeconomicopportunity...............................................................................................................................86

Womens

health

care

............................................................................................................................................................................................................

86ViolenceAgainstWomenAct(VAWA)..........................................................................................................................................................................86

Equalpayforequalwork...................................................................................................................................................................................................87

Protectingthemostvulnerablefamilies.................................................................................................................................................88

Spendingonlowincomeprogramsisdeclining......................................................................................................................................................88

Antipovertyprogramsareprotectedinbipartisandeficitreductionproposals.....................................................................................89

SNAPfundingpreventshungerformillionsofAmericansstruckbyhardtimes......................................................................................90

NutritionformotherswithyoungchildrensupportschilddevelopmentandprovidesfutureSavings..........................................91

Heatingassistanceprovidescriticalsupporttolowincomefamiliesandseniors...................................................................................91

Housingforlowincomefamilies.....................................................................................................................................................................................92

Keepingthepromisesmadetoourveterans........................................................................................................................................94

Keepingthepromiseofasecureretirement.........................................................................................................................................97

ProtectingmiddleclassfamiliesfromWallStreetrisktakingandpredatorybehavior....................................................99

Avoidingthemistakesofthepastandprotectingmiddleclassfamilies....................................................................................................100

Republicanshaveadifferentvisionforthepathforward................................................................................................................................101

TheSenateBudgetwillprotectmiddleclassfamiliesandcommunities...................................................................................................101

Maintainingourcommitmenttodomesticsecuritywhilesupportingfamilycenteredcomprehensiveimmigrationreform......................................................................................................................................................................................103


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3TableofContents

Comprehensiveimmigrationreform..........................................................................................................................................................................103

Federaleffortstoprotectandenhancethesecurityofourcommunities..................................................................................................104

Keepingpromisestofuturegenerationsbyprotectingtheenvironmentandaddressingclimatechange.............105

Protectingtheenvironment:endangeredspeciesandopenspace...............................................................................................................106

Protectingtheenvironment:cleanair,cleanwater,andrestoringimpairedresources....................................................................107

Preparingfortheimpactsofclimatechange.........................................................................................................................................................108

KeepingourpromisestoAmericasruralcommunities................................................................................................................110

Conservation..........................................................................................................................................................................................................................110

AgricultureResearch.........................................................................................................................................................................................................110

Energy......................................................................................................................................................................................................................................110

FarmBill..................................................................................................................................................................................................................................110

Supportingworkerswhiletheyfighttogetbackonthejob.......................................................................................................112

KeepingourpromisestoAmericanIndiansandAlaskaNatives...............................................................................................113


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4ALetterFromSenateBudgetCommitteeChairmanPattyMurray

ALetterFromSenateBudgetCommittee

ChairmanPattyMurrayFouryearsafterthegreatesteconomiccrisissincetheGreatDepression,thereisaseriousdivision

betweenthetwomajorpoliticalpartiesinAmericaaboutwhatgovernmentshouldbedoingtokeepoureconomyandournationalfinancesmovingintherightdirection.Oneapproach,urgedbyleadersintheRepublicanParty,wouldtakeusbacktothefailedeconomicandfiscalpoliciesthatledtotheGreatRecession.Thisisthepathoftaxcutsfortherich,deregulationofWallStreet,increasedcostsofhealthcare,moreinstabilityanduncertaintyformiddleclassfamilies,andthebreakingofpromiseswevemadetoourseniorsandfamilies.Itisanapproachpushedbythosewhobelievethatgovernmenthasnobusinesssupportingournationalcompetitivenessandbythosewhothinkthatthehighestpriorityshouldberadicallyshrinkinggovernment,notimprovingit.

TheotherapproachistheoneurgedbythevastmajorityoftheAmericanpeoplewhobelievethatweneedtobemovingforward,notbackwards.Thisistheapproachthatsaysweshouldlearnfromhistorysowearenotdoomedtorepeatit.Itisanapproachthatprioritizesfairness,opportunityforthemiddleclass,andareturntotheresponsiblefiscalandeconomicpoliciesthathaveworkedforourcountrybefore.Itisanapproachthatmaintainsthatgovernmentcantsolveeveryproblem,butthatitcanandshouldworktocreatejobs,supportthemiddleclass,andofferahanduptofamiliesthatneedsomesupportwhiletheyworktogetbackontheirfeet.TheSenateBudgetreflectsthevalues,priorities,andgoalsofthosewhosupportthissecondapproach.ItreflectsthepromiddleclassagendathattheAmericanpeoplewenttothepollsinsupportoflastelection

AndIbelieveitisastrongandresponsiblevisionforbuildingafoundationforgrowthandrestoringthepromiseofAmericanopportunity.ThehighestpriorityoftheSenateBudgetistocreatetheconditionsforjobcreation,economicgrowth,andprosperitybuiltfromthemiddleout,notthetopdown.Thisiswhatpeopleacrossthecountrysaytheywantfirstandforemost,andthisbudgetdeliversonit.Atatimewhentoomanymiddleclassfamiliesacrossthecountryarestillstruggling,andfartoomanyworkerscontinuefightingtogetbackonthejob,thelastthingoureconomyneedsrightnowisforpoliticaldysfunctionorextremeandirresponsiblebudgetpoliciestothreatenourfragilerecovery.Thisbudgetreplacessequestrationresponsiblyandinvestsinjobcreationtohelpfamiliesandtheeconomyrightaway.Ittacklesourgrowingnationaldeficitsineducation,infrastructure,andinnovationtomakesurewearelayingdownastrongfoundationforbroadbasedeconomicgrowthforyearstocome.AnditabsolutelyrejectsareturntothefailedtrickledowneconomicpoliciesthatdevastatedthemiddleclassandledustotheGreatRecession.TheSenateBudgettacklesourdeficitanddebtthewaytheAmericanpeoplehavetoldustheywantitdone:withabalancedmixofresponsiblespendingcutsandnewrevenuefromthewealthiestAmericansandbiggestcorporations.


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Tome,thisisjustcommonsense.Wehaveaseriousdeficitanddebtproblemthatweneedtotackleandwecertainlydontwanttoleaveourchildrenandgrandchildrenwithanunmanageablepileofourbills.SoIthinkthatmeansweshouldbeexaminingeverypartofthefederalbudgetforsmartandresponsiblesavings:fromhealthcarespending,todefensespending,totheloopholesanddeductionsinthetaxcodethatbenefitthewealthiestAmericansandbiggestcorporations,andmore.Democratshavebeenveryclearaboutthis;wethinkeverythingshouldbeonthetable,andwebelieve

thateveryoneshouldbeaskedtocontributetothesolution.LikethevastmajorityoftheAmericanpeople,wedontthinkdeficitreductionshouldbedonethroughspendingcutsalone,andwedontthinkitshouldcomeonlyfromnewrevenue.Itshouldbeabalancedandresponsiblemixofboth.Unfortunately,manyRepublicansinCongressdontsharethisview.Theybelievethatweshouldmakemassivecutstoeducation,healthcare,andotherinvestmentsthatbenefitthemiddleclass,seniors,andthemostvulnerablefamilies.ButtheythinkthewealthiestAmericansandbiggestcorporationsshouldntbeaskedtopaytheirfairshare.Infact,recentRepublicanproposalshaveactuallycuttaxesfortherichandaskedmiddleclassfamiliestopickupthetab,apolicypositionthatisfaroutsidethemainstreamofhowtheAmericanpeoplebelieveweshouldapproachthis.In2010,thebipartisanSimpsonBowlesCommissionlaidoutagoalofreducingthedeficitby$4trillionovertenyearsandDemocratsandRepublicansembracedthisasreasonableandresponsible.OtherbipartisangroupsincludingtheSenatesGangofSixagreed.Sincethattime,Congresshasworkedtoreducethedeficitby$2.4trillion,withmostofthatcomingfromspendingcuts.TheSenateBudgetbuildsonthissavingswithanadditional$1.85trillionindeficitreduction,foratotalof$4.25trillionindeficitreductionsincetheSimpsonBowlesCommissionreport.ThenewdeficitreductioninthisbudgetcomesfromanequalmixofresponsiblespendingcutsmadeacrossthefederalbudgetandnewrevenueraisedbyclosingloopholesandendingwastefulspendinginthetaxcodethatbenefitsthewealthiestAmericansandbiggestcorporations.Andbecausewebelievethatitmakessensetoreducethedeficitthewaywediditinthe90s,bygrowingtheeconomyandcreatingmillionsofmiddleclassjobs,thisbudgetincludesa$100billionjobsandinvestmentpackagetogetworkersbackonthejobandbeginfixingtheworstofthecrumblinginfrastructurethatisholdingbackeconomicgrowth.Inadditiontoinvestinginjobsandeconomicgrowthandtacklingourdeficitanddebtresponsibly,theSenateBudgetkeepsthepromiseswevemadetoseniors,families,veteransandcommunities.Andimportantly,itrejectsattemptsbyRepublicanstodismantleorprivatizeMedicareforourseniors,

andinsteadworkstopreserve,protect,andstrengthenthiscriticalprogram.Thisbudgetmakestheinvestmentsweneedtokeepournationsecureandkeepthepromiseswevemadetoourveterans.Anditprotectsthestrongsafetynetthathashelpedmillionsoffamiliesgetbackontheirfeetwhentheywerestruggling.WhenmydaddevelopedMultipleSclerosisandhadtostopworking,IknowthatmysixsiblingsandIwouldneverhavemadeitifwedidnthaveagovernmentthatwastheretohelpusputfoodonthetable,helpmymomgetthetrainingsheneededtogetbacktowork,andhelpusallgotocollegewithfederalstudentloansandtuitionsupport.Weareanationthatcomestogethertohelpfamilieslikemine,andtheSenateBudgetwouldmakesurethatcontinues.


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MiddleclassfamiliesacrossAmericaaresickandtiredofthegridlockthathasparalyzedthebudgetprocessinWashington,D.C.Theyarelookingtotheirelectedofficialstoendtheconstantartificialcrisesandpoliticalbrinksmanshipthatisthreateningourfragileeconomicrecovery,andtoworktogethertoresponsiblytackletheseriouseconomicandfiscalchallengeswefaceasanation.IbelievetheSenateBudgetoffersapathforwardtoaccomplishthis.AndIamproudoftheworktheSenateBudgetCommitteehasdonetoputthisbudgettogetherwithalotofinputfromourcolleagues

outsidetheCommitteeandmembersofthepublicacrossthecountry.Iamconfidentthatourcountrycanmovebeyondthisdivisionandworktogethertotackleourfiscalandeconomicproblemsfairlyandresponsibly.Ournationhasfacedfargreaterchallengesinourhistory,andtimeandagaintheAmericanpeoplehavecometogetherwithouruniquebrandofingenuity,diversity,andcompassiontodotherightthing.IamhopefulthattheHouseofRepresentativeswilljointheSenateatthebargainingtableandwecanworktogethertowardtheresponsibleandbipartisanbudgetdealtheAmericanpeopleexpectanddeserve.Sincerely,

SenatorPattyMurray(DWA)ChairmanoftheSenateBudgetCommitteeMarch13,2013


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7FoundationforGrowth:RestoringthePromiseofAmericanOpportunity

FoundationforGrowth:Restoringthe

PromiseofAmericanOpportunityTheFiscalYear2014SenateBudgetbuildsontheworkdoneoverthelasttwoyearstocreatejobs,invest

inbroadbasedeconomicgrowth,andtackleourdeficitanddebtresponsibly.ThisbudgettakesthebalancedandresponsibleapproachtoourfiscalchallengesthateverybipartisangrouphasendorsedandthattheAmericanpeoplesupport.Itincludesresponsiblespendingcutsmadeacrossthefederalbudget,aswellassignificantnewsavingsachievedbyeliminatingloopholesandcuttingwastefulspendinginthetaxcodethatbenefitsthewealthiestAmericansandbiggestcorporations.TheSenateBudgetisgroundedintheunderstandingthatourcountryslongtermfiscalandeconomicgoalswillonlybemetwithpoliciesthatsupportastrongandgrowingmiddleclass.Anditkeepsthepromiseswehavemadetoourseniors,ourfamilies,andourcommunities.

TheAmericanpeoplearesickandtiredofwatchingtheirgovernmentlurchfromcrisistocrisis.TheSenateBudgetoffersaseriousandcrediblepathawayfromthisgridlockanddysfunctionandtowardalongtermplantocreatejobs,laydownastrongfoundationforbroadbasedeconomicgrowth,replacesequestration,andtackleourdeficitanddebtresponsiblyandcredibly.ThisbudgetreflectsthevaluesofadiverseSenateservingadiversenation,anditisguidedbytheprinciplesandprioritiesthatarestronglysupportedbytheconstituentswewereelectedtorepresent.

ThehighestpriorityoftheSenateBudgetistocreatetheconditionsforjobcreation,

economicgrowth,andprosperitybuiltfromthemiddleout,notthetopdown.TheSenateBudgettakesthepositionthattrickledowneconomicshasfailedasaneconomicpolicyandthattruenationalprosperitycomesfromthemiddleout,notthetopdown.Webelievethatdeficitreductionattheexpenseofeconomicgrowthisdoomedtofailure,andpoliciesthatpromoteastrongmiddleclassareessentialtotacklingourlongtermdeficitanddebtchallenges.ThepoliciesPresidentBarackObamaandCongressputinplaceinresponsetotheGreatRecessionpulledoureconomybackfromthebrinkandhelpedtoaddbackjobs.Butwithanunemploymentratethatremainsstubbornlyhigh,andamiddleclassthathasseentheirwagesstagnateforfartoolong,wesimplycannotaffordanythreatstoourfragilerecovery.Therefore,theSenateBudget:

Fullyreplacestheharmfulcutsfromsequestrationwithsmart,balanced,andresponsibledeficit

reduction,whichwouldsavehundredsofthousandsofjobswhileprotectingfamilies,communities,andthefragileeconomicrecovery.

Investsinlongtermeconomicgrowthandnationalcompetitivenessbytacklingourseriousdeficitsininfrastructure,education,jobtraining,andinnovationtocreatejobsnowandlaydownastrongfoundationforbroadbasedgrowth.


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Includesa$100billiontargetedjobsandinfrastructurepackagethatwouldstartcreatingnewjobsquickly,beginrepairingtheworstofourcrumblingroadsandbridges,andhelptrainourworkerstofill21stcenturyjobs.ThisjobsinvestmentpackageisfullypaidforbyeliminatingloopholesandcuttingwastefulspendinginthetaxcodethatbenefitsthewealthiestAmericansandbiggestcorporations.

Protectsandcontinuestaxcutsforthemiddleclassandlowincomeworkingfamilies.

TheSenateBudgetbuildsontheworkwehavedoneoverthelasttwoyearsto

tackleourdeficitanddebtresponsibly.Attheendof2010,thebipartisanSimpsonBowlesCommissionreportlaidoutaresponsiblegoalofreducingourdeficitby$4trillionovertenyears.Sincethattime,Congressandtheadministrationhaveimplemented$2.4trillionindeficitreduction,with$1.8trillioncomingfromspendingcutsand$600billioncomingfromnewrevenuefromthewealthiestAmericans.TheSenateBudget:

Surpassesthebipartisangoalof$4trillionin10yeardeficitreductionandputsourdeficitanddebtonadownward,sustainable,andresponsiblepath.

Buildsonthe$2.4trillionindeficitreductionalreadydonewithanadditional$1.85trillioninnewdeficitreductionforatotalof$4.25trillionindeficitreductionsincetheSimpsonBowlesreport.

Includesanequalmixofresponsiblespendingcutsandnewrevenueraisedbyclosingloopholesandendingwastefulspendinginthetaxcode.

Achieves$975billionindeficitreductionthroughresponsiblespendingcutsmadeacrossthefederalbudget:

o $493billionsavedonthedomesticspendingside,including$275billioninhealthcaresavingsmadeinawaythatdoesnotharmseniorsorfamilies.

o $240billionsavedbycarefullyandresponsiblycuttingdefensespendingtoalignwiththedrawdownoftroopsinouroverseasoperations.

o $242billionsavedinreducedinterestpayments.

Achieves$975billionindeficitreductionbyclosingloopholesandeliminatingwastefulspendinginthetaxcodethatbenefitsthewealthiestAmericansandbiggestcorporations.

Includesreconciliationinstructions,afasttrackprocessthatmakessurethatthenewrevenuefromthewealthiestAmericansandbiggestcorporationscannotbefilibusteredintheSenate.


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TheSenateBudgetkeepsthepromiseswehavemadetoourseniors,families,

veterans,andcommunities.TheSenateBudgettakesthepositionthatthepromiseswemadetoourseniors,families,veterans,andcommunitiesoughttobefulfilled.Thisbudget:

PreservesandprotectsMedicaresothatitisstrongforseniorstodayandwillbethereforourchildrenandgrandchildren.

Rejectscallstodismantle,privatize,orvoucherizeMedicare.

BuildsontheresponsiblechangesmadeintheAffordableCareActtocontinuereducinghealthcarecostswhileprotectingpatients.

Protectstheexpansionofhealthinsurancetonearly30millionAmericansandensuresthefederalstatepartnershiponMedicaidispreserved.

Rejectseffortstosimplyshifthealthcarecoststostatesormakecutsthatharmseniorsandthemostvulnerablefamilies.

Maintainsthekeyprinciplethatdeficitreductionshouldnotbedoneonthebacksofthemostvulnerablefamiliesandcommunities.

Continuestomaketheinvestmentsweneedinnationaldefense,homelandsecurity,andlawenforcementtokeepourcountryandourcommunitiesstrongandsecure.

Keepsthepromisewehavemadetoourveteransthattheircountrywillbethereforthemandprovidetheresourcesandsupporttheyneedwhentheycomehome.

TheHouseRepublicanapproachwouldhurtmiddleclassfamiliesandtheeconomy

andbreakthepromiseswehavemadetoourseniors.TheSenateBudgetoffersaverydifferentvisionthantheapproachtakenbyHouseRepublicans.Theirproposalswouldcutthelegsoutfromunderourfragileeconomicrecoveryandthreatenmillionsofjobs.Theywouldslashtheinvestmentsininfrastructure,education,andinnovationthatweneedtolaydownastrongfoundationforbroadbasedgrowthandthatwouldpositionustocompeteandwininthe21stcenturyglobaleconomy.

HouseRepublicanswoulddismantleMedicareandcutoffprogramsthatsupportthemiddleclassandmostvulnerablefamilies.AndtheywoulddoallthatwhilerefusingtoaskthewealthiestAmericansandbiggestcorporationstocontributetheirfairshare.WebelievethattheAmericanpeoplestronglysupporttheprogrowth,promiddleclassapproachtakenintheSenateBudget.Andwelookforwardtoengagingwithfamiliesandseniorsacrossthecountryasweworktopasstheresponsible,fair,andbipartisanbudgetdealtheAmericanpeopleexpectanddeserve.


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10ALookBack:ThePathtoTodaysChallenges

ALook

Back:

The

Path

to

Todays

Challenges


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Whilewehavemadesignificantprogressoverthelastfewyears,ourcountrycontinuestofaceseriousbutsurmountablechallengesasweworktogrowtheeconomyandtackleourdeficitanddebtresponsibly.Andasweconfrontthechallengesaheadofus,itisimportanttokeepinmindthepaththatbroughtustothispoint.Theworkdoneinthe1990shelpedgrowtheeconomy,createjobs,balancethebudget,andputourgovernmentontracktoeliminatethenationaldebt.Thatwasallreversedbetween2001and2008.From

2009untiltodaywehavefoughttopulloureconomybackfromtheprecipice,movefrommonthlyjoblossestoslowbutsteadyjobgains,andbeginthehardworkofreducingourdeficitanddebtresponsibly. FollowingPresidentClintons1993taxdealthatbroughtinnewrevenuefromthewealthiest

Americansandthebipartisanresponsiblespendingcuts,ourcountrycreated22millionnewjobsandachievedabalancedbudget.PresidentClintonstaxpolicieswerenottheonlydriverofeconomicgrowth,butourleadersabilitytoagreeonafiscallysustainableandeconomicallysoundpathprovidedvaluablecertaintyforAmericanfamiliesandbusinesses.

Between2001and2008wefacedacombinationoftaxcutsweightedtowardthewealthiest

Americans,costlyandunpaidforwarsinIraqandAfghanistan,andirresponsiblederegulationofWallStreet.Thesedecisionsreversedthefiscalandeconomicprogressmadeintheprioreightyears,devastatedworkersandtheeconomy,andturnedabudgetsurplusintoagrowingdeficit.

PresidentObamaenteredofficefacingthegreatesteconomiccrisissincetheGreatDepression,as

millionsofAmericanslosttheirjobsandexperiencedthepainofforeclosure.ThePresidentworkedwithCongresstoturntheeconomyaround,andwhileoureconomicrecoveryremainsfragileandmoreworkneedstogetdone,wearemovingintherightdirection.


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Thiscountrysrecenthistoryshowsthatournationisstrongestwhenourpoliciesaredesignedtoencourageprosperitybuiltfromthemiddleout,ratherthanthetopdown.Andthatwhileitisabsolutelycriticaltoaddressourdeficitanddebtchallenges,attemptingtodosoattheexpenseofjobsandbroad

basedeconomicgrowthisnotonlyunfair,itjustwillnotwork.PresidentBillClintonenteredofficein1993atatimewhenthecountrywasfacingseriousdeficitanddebtproblems.Theyearbefore,thefederalgovernmentwastakinginrevenueequal17.5percentofGDPbutspendingwas22.1percentoftheeconomyadeficitof4.7percent.1Hisproposaltoraisethetopincometaxrateto39.6percentpassedtheSenateandHousewithoutasingleRepublicanvote.Atthetime,Republicanleadersclaimedtheproposalwoulddevastatetheeconomyandcausemassivejobslosses.RepublicanSenatorPhilGramm(RTX)predictedthatthisprogramisgoingtomaketheeconomyweak.Ibelievehundredsofthousandsofpeoplearegoingtolosetheirjobs.2

Asweknow,theoppositehappened.Theunemploymentratewentfrom7percentatthebeginningof1993to3.9percentattheendof2000.3Between1993and2001,oureconomygainedmorethan22millionjobs4andexperiencedthelongesteconomicexpansioninourhistory.5AsAmericansgainedjobsandoureconomycontinuedtogrow,revenueincreasedfrom17.5percentto20.6percentofGDP.DespitefearsfromRepublicansthatmorerevenuewouldcausespendingtogoup,federalspending

droppedfrom22.1percentofGDPto18.2percentofGDP.6Ourbudgetreachedbalanceandournationwasontracktocompletelyeliminatethefederaldebtoverthenextdecade.7WhilePresidentClintonstaxchangeswerenottheonlydriverofoureconomicgrowth,theabilityofelectedofficialstocometogetherandagreeonafiscallysustainablepathplayedaroleinkeeping

1OfficeofManagementandBudget,HistoricalTables,Table1.2.accessed3/8/12.

2TheBudgetStruggle;ClintonWinsApprovalOfHisBudgetPlanAsGoreVotesToBreakSenateDeadlock,NewYorkTimes,

8/7/93.3U.S.DepartmentofLabor,BureauofLaborStatistics,CivilianUnemploymentRate,accessed3/8/13.

4AllEmployees:TotalNonfarm, U.S.DepartmentofLabor,BureauofLaborStatistics,accessed3/8/13,

5USBusinessCycleExpansionsandContractions,NationalBureauofEconomicResearch,accessed3/8/13.

6OfficeofManagementandBudget,HistoricalTables,Table1.2,accessed3/8/12.

7CongressionalBudgetOffice,BudgetandEconomicOutlook:FiscalYears20022011,January2001.


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interestrateslowandgivingmarketsandsmallbusinessestheconfidencetheyneededtoexpandandcreatejobs.

In2001,Democratssawthesurplusasanopportunitytofreeourselvesfromdebtandinvestinnationalpriorities.UndertheleadershipofPresidentGeorgeW.Bush,however,ourcountrysfiscalcoursetookadramaticturnfortheworse.Costlytaxcutsweightedtowardthewealthy,warsinIraqandAfghanistanthatwerenotpaidfor,andotherfiscallydisastrouspolicydecisionserodedthesurplusinheritedfromthepreviousadministration.Thiswasnotasurprise,ofcourse.FormerSenatorPaulSarbanes(DMD)predictedthesetaxcutswouldputusontheglidepathtodissipatethishardearnedfiscalrestraint.8AndPresidentBushsownTreasurySecretary,PaulONeill,alsotriedtowarnthatcuttingthetaxratesoncapitalgainsanddividendswouldblastaholeinthedeficit.ButVicePresidentDickCheneyinformedhimthatdeficitsdonotmatter.9By2008,federalrevenueshaddeclinedto17.6percentofGDP,whilespendingincreasedto20.8percentadeficitof3.2percent.10OurcountrywasonapathtowardrecorddeficitsasthelegacyoftheBushadministrationspolicieslivedbeyondthePresidentstimeinoffice.Anddespitetherosyfiscalprojectionsattheturnofthecentury,thedecadewasmarkedbyanalmostdoublingofthefederaldebt.11

DeregulationandirresponsibilityonWallStreetonlymadethingsworse.Theyprecipitatedadevastatingfinancialcrisis,leadingtothedeepestrecessionsincetheGreatDepression,beginninginDecember2007.Theeconomicturmoilandinstabilitythatfollowedtouchedallcornersofourcountry.Throughnofaultoftheirown,Americanssawtheirretirementaccountsthathadtakenyearstoaccumulate

losevaluealmostovernight.Millionsofworkerslosttheirjobs,andcountlessfamilieslosttheirhomesorhadtoscrambletokeepupwiththeirmortgages.Thiseconomicdownturn,togetherwiththefiscalpoliciesoftheBushadministration,generatedasignificantportionoftodaysdebt.12Theyalsohelpexplainthedecadeofmiddleclassstagnation,withtheaverageAmericanfamilyearninglessinPresident

Bushslastyearinofficethantheydidduringhisfirst.13Andimportantly,insteadoflaying

8GreenspanSeesRoomforTaxCut,ABCNews,1/25/01.

9ConfessionsofaWhiteHouseInsider,TIMEMagazine,1/10/04.



12CenteronBudgetandPolicyPriorities,EconomicDownturnandLegacyofBushPoliciesContinuetoDriveLargeDeficits,

2/28/13.13

CensusBureau,TableH6,accessed2/28/13.


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thefoundationforlongtermmiddleclassgrowth,theBushAdministrationleftuswithcrumblinginfrastructureandaneconomythatincreasinglyworkedforonlythewealthiest.

WhenPresidentObamatookofficeinJanuary2009,ourcountryfacedchallengesofhistoricproportions.Morethan700,000Americanswerelosingtheirjobseachmonth,14andarecordnumberofmortgageswereinforeclosureorunderwater.15Bankswerecollapsingorteeteringonthevergeofcollapseandthreateningevenfurtherdevastation.Andmanufacturersandotheremployerswereunabletofinanceinvestmentsoroperationsandriskedbeingforcedtoclosetheirdoors.WorkingwithDemocratsinCongress,PresidentObamaactedquicklytopassapackageoftaxcutsformillionsofAmericanfamilies,reliefforthosehardesthitbytherecession,andinitiativestosupporteconomicgrowth.16

Thisresponse,incombinationwiththeactionstakenbytheFederalReserve,producedadramaticturnaround.Beforetheendof2009,positivegrowthhadreturned.17Theunemploymentratebegantodeclineshortlyafter,18andintheyearssincewehavecontinuedtomakeprogressonbothmeasures.Yet,theeconomyisstillstruggling,millionsofworkersarelookingfortoofewjobs,andaggregatedemandisstillfarbelowitspotential.

14

U.S.DepartmentofLabor,BureauofLaborStatistics,AllEmployees:TotalNonfarm,accessed3/8/13,15

ForeclosuresUpARecord81%in2008,CNNMoney,1/15/09.16

Recovery.gov,accessed3/8/13.17

NationalBureauofEconomicResearch,USBusinessCycleExpansionsandContractions,accessed3/8/13.18

U.S.DepartmentofLabor,BureauofLaborStatistics,CivilianUnemploymentRate,accessed3/8/13.


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TheslowpaceoftherecoverymeansthattoomanyAmericanworkersandfamiliesarestrugglingtokeepup.Incomeinequalityisgrowing,whileeconomicmobilityandopportunityarenot.TherearestillmanyAmericanswhowonderwhetherwecanleaveastrongercountry,withgreateropportunity,forthenextgeneration.Wehaveseenanincreasinggapbetweenthewealthyandeveryoneelse,atrendthathinderseconomicgrowth,underminesconfidenceinourinstitutions,andgoesagainstafundamentalpromiseofourcountrythathardwork,notwhereyoubegininlife,shoulddetermineyoursuccessandabilitytoleaveabetterfutureforyourchildrenandgrandchildren.Buildingastrongmiddleclassisthekeytoreducingourdeficitanddebtandensuringthatwecompeteandwininthe21stcenturyeconomy.Maintainingourleadershipintheworlddependsonourabilitytoreversethetrendsofthelastseveraldecadesandgrowtheeconomyfromthemiddleout.TheSenateBudgetwillmoveusawayfromthecrisistocrisisstyleofgoverningwehaveseenfartoomuchofinrecentyearsandtowardsolutionsthat

workformiddleclassfamilies.Typicalmiddleclassfamilieshaveseentheirincomesdeclineoverthelastdecade.In2011,medianhouseholdincomewasjustover$50,000,nearly$5,000belowthe2000level,andlowerthanithadbeenatanytimesince1995.19Thisstagnationmakesithardertobuyahouse,financeacollegeeducation,andtaketherisksthathaveallowedthiscountrytobehometosomeoftheworldsmostinnovativeandproductiveenterprises.Andwhilewomensawmeaningfulwagegrowthinthe1980sand1990s,thatgrowthleveledoffinthelastdecade.Today,womencontinuetoearnsubstantiallylessthanmenawomanworkingfulltimeyearroundin2011couldexpecttoearnjustthreequartersofhermalecounterparts.20

Atthesametime,therichhavebeengettingmuchricher.Thetoponepercentofhouseholdshasseentheirincomesmorethandoublesincethe1970s.21

19

CensusBureau,TableH6,accessed2/28/13.20

CensusBureau,TableP40,accessed2/28/13.21

CBO,SupplementalDataTable3,7/10/12.


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Forthoseattheverytop,thetrendisevenmorepronounced.By2007,the400highestincometaxpayershadseentheirincomerisefivefoldsincejustthemid1990s.22Andwhenyouconsidermeasuresbeyondincome,the

imbalanceisevengreater.Today,thetoponepercentofhouseholdsownmorethan35percentofallofthenationswealthand38percentofallfinancialassets.23Thewealthiest400individualsholdmorewealththanthe150millionpeoplethatcomprisethebottom50percentowealthholders.24

Ourcountrycanrestorethepromisethatifsomeoneworkshard,theywillhaveeveryopportunitytheydeservetoleaveabetterfuturefortheirchildrenandgrandchildren.Doingsorequiresinvestinginjobs,longtermeconomicgrowth,andnationalcompetitiveness.Thisapproachwillallowustobuildprosperityfromthemiddleout,tackleourdeficitsanddebtresponsibly,andkeepthepromiseswehavemadetoourseniors,families,andcommunitiesforgenerationstocome.

22

IRS,The400IndividualIncomeTaxReturnsReportingtheLargestAdjustedGrossIncomesEachYear,19922009,2012.23

TheMythofLivingBeyondOurMeans,RobertReich,Truthdig,1/29/2013.24

TheWreckingBall,SylviaAllegretto,theBerkleyBlog,7/16/12.


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17Investinginjobs,longtermeconomicgrowth,nationalcompetitiveness,andprosperitybuiltfromthemiddleout

Investing

in

jobs,

long

term

economic

growth,nationalcompetitiveness,and

prosperitybuiltfromthemiddleout


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ThehighestpriorityoftheSenateBudgetistocreatetheconditionsforjobcreation,economicgrowth,andprosperitybuiltfromthemiddleout,notthetopdown.Ourcountryhasseriousdeficitanddebtchallenges,butwealsofaceequallysignificantdeficitsinjobs,education,workerskills,infrastructure,andinnovation.TheSenateBudgettacklesthesechallengesby:

Fullyreplacingsequestrationinabalancedandresponsiblewaytosavejobsandsupportourfragileeconomicrecovery.

Includingatargetedjobsandinfrastructurepackagethatwillstartcreatingnewjobsquickly,makemuchneededrepairstoourroadsandbridges,andhelptrainourworkersforjobsinhighdemandindustries.

Investinginourpeoplebymakingsurestudentsandworkersacrossthecountrycanaccesshighqualityeducationandtraining,expandingtheiropportunitiesandstrengtheningoureconomyforthelongterm.

Investinginrebuildingourcrumblinginfrastructureandmakingsurewearelayingdownastrong

foundationforlongtermeconomicgrowth.

Investinginresearchandinnovationsowecancontinuetocompeteintheglobaleconomyandgrowourmiddleclass.

Theseinvestmentswillcreatejobsandhelpthemiddleclassrightnow,theywillhelplaydownastrongfoundationforlongtermandbroadbasedeconomicgrowth,andtheywillallowourcountrytocompeteandwininthe21stcenturyglobaleconomy.


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TheSenateBudgettakesthepositionthataresilientmiddleclassandarobusteconomyreinforceoneanother.Oureconomicpolicyisthereforebuiltonthevaluesandprinciplesthatbuildabroadmiddleclass,supportstrongandstabledemand,andinvestinandencouragetheingenuityandinnovationthatleadstojobcreationandtruebroadbasedprosperity.Fortheeconomytogrow,demandforthegoodsandservicesourbusinessesproducemustbestrong.Abroadmiddleclassthatisdoingwellprovidesthemarketwiththeconsumersnecessarytopurchaseproducts.Thatcreatesstability,whichinturnencouragesfirmsandentrepreneurstopursueproductivityenhancinginvestmentsthatgrowtheeconomyandfosternewenterprises,expandingemploymentopportunitiesevenfurther.NickHanauer,whorunsaventurecapitalfirmandwasaninitialinvestorinAmazon.com,Inc.,putitthisway:[O]nlyconsumerscansetinmotionavirtuouscyclethatallowscompaniestosurviveandthriveandbusinessownerstohire.AnordinarymiddleclassconsumerisfarmoreofajobcreatorthanIeverhavebeenoreverwillbe.25 Asstrongdemandspurseconomicgrowthandjobcreation,awelltrainedandflexibleworkforceisnecessarytomaintainthesegains.CultivatingadiversesetofskillsfurthersupportsthestabilityoftheAmericaneconomy.Bypreparingourpeopletocontributeinabroadrangeofestablishedandgrowingindustries,wewillmakesureourworkershavetheskillsandtrainingtheyneedtocompeteandwininthe21stcenturyglobaleconomy.ThemiddleoutapproachtakenintheSenateBudgetoffersanalternativetothetheoryoftrickledowneconomics.Trickledowneconomicsassertsthatgrowthandprosperityhappenfromthetopdown.Accordingtothistheory,thebestwaytocreatejobsandgrowtheeconomyistocuttaxesforthewealthiestAmericansandexpecttheirspendingtobenefiteveryoneelse.

ItisthistheorythathasledRepublicanstoadvocatefortaxcutsfortherichasaneconomicpolicy.Butrecenteconomichistoryhasshownthatthistheorysimplydoesntwork.Itsafailedideology,notaneconomicpolicy.Weightingtaxcutstowardthewealthyratherthanthemiddleclassexacerbatesinequality.Andasinequalityincreases,themiddleclasscannolongerparticipateintheeconomyasconsumersandentrepreneurs.Businessescreatefewerjobsasdemandfortheirproductsdeclines.Andasaccesstoskillenhancingtrainingsuffers,moreandmoreworkersfindtheyareillpreparedtofillthejobsthatdoremain.

Republicanswanttotakeusbacktofailedpolicies,buttheSenateBudgetbuildsonwhatisworkingtomoveusforwardtowardprosperitybuiltfromthemiddleout.InrecentyearsCongressandtheadministrationhavetakensignificantactiontoconfrontsomeofournationsbiggestchallenges.WallStreetReformwaspassedtoreigninthemostegregiouspracticesonWallStreetandprotectoureconomyfromthekindoffinancialcrisisthatcausedtheGreatRecession.

25

RaiseTaxesonRichtoRewardTrueJobCreators,NickHanauer,Bloomberg,11/20/11.


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AndtheAffordableCareActwaspassedsothatallAmericanscanaccessaffordable,highqualityhealthcare.DemocratswanttobuildonthisprogressandtheSenateBudgetwoulddoexactlythat.Republicans,however,wouldtakeusbacktothefailedpoliciesofthepast.HouseRepublicanswouldrollbackhealthcarereform,protectthewealthiestfrompayingtheirfairshare,andplacetheentireburdenofdeficitreductiononthebacksofthemiddleclass,seniors,andmostvulnerableAmericans.Undertheirplans,

theinvestmentsthathavethegreatestbenefitforfuturegenerations,likeeducation,infrastructure,andresearchandinnovation,wouldbeslashed.Ratherthanrevertingtoafailedtrickledownideology,thisbudgettakesthepositionthatweshouldbuildonwhatisworkingtosecuremiddleclassgrowthandprosperity.Byfocusingoncreatingjobsnowandmakingsmartinvestmentsinlongtermandbroadbasedeconomicgrowth,theSenateBudgetpresentsaresponsibleplantodoexactlythis.


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Intendedasamechanismtoforceaction,theimpositionofthesequesterwouldundercutkeyresponsibilitiesofthefederalgovernment.26

HouseBudgetCommitteeChairmanPaulRyan

ThedamagingcutsfromsequestrationthatwereincludedinthebipartisanBudgetControlActwere

neverintendedtobeimplemented,buttheynowthreatenhundredsofthousandsofjobs,governmentservicesthatfamiliesandcommunitiesdependon,nationalsecurity,andourfragileeconomicrecovery.Sincethehighestpriorityofthisbudgetiscreatingjobsandboostingtheeconomy,replacingsequestrationinabalancedwayisakeycomponentofitsapproachtotacklingourfiscalandeconomicchallengesresponsibly.TheSenateBudgetthereforeincludes$1.85trillionintotaldeficitreduction,$960billionofwhichconsistsofafullandbalancedreplacementofthecutsfromsequestration.ThisbudgetreplacessequestrationusingthefollowingequalmixofresponsiblespendingcutsandnewrevenuefromthewealthiestAmericans,whichbuildsontheprecedentsetinthebipartisanyearenddeal:

$480billioninnewrevenueraisedbyclosingloopholesandendingwastefuldeductionsthatbenefitthewealthiestAmericansandbiggestcorporations;

$240billioninresponsiblesavingsacrossdomesticspending;and $240billionfromreductionstodefensespendingthatcoincidewiththedrawdownoftroopsfrom

AfghanistanandthatcanbeimplementedresponsiblybythePentagon.TheSenateBudgetlaysoutacredibleandresponsibleframeworktoreplacesequestrationinabalanced

andbipartisanway.SinceabudgetresolutionisnotpermittedtochangetheBudgetControlActthatcreatedsequestration,thisbudgetcallsforadditionallegislationthatwouldmakethetechnicalchangestothelawusingtheframeworklaidoutinthisbudgetofanequalmixofresponsiblespendingcutsandnewrevenuefromthewealthiestAmericansandbiggestcorporations.SenateRepublicanshaveconsistentlyfilibusteredlegislationthatincludedanynewrevenuefromthewealthiestAmericans,sotheSenateBudgetincludesreconciliationinstructionstocreateafasttrackprocesstopreventafilibusterofthenewrevenueraisedtoreplacesequestrationandforadditionaldeficitreduction,whichwouldthenbecombinedwithadditionalresponsiblespendingcuts.

SinceDemocratshavebeenclearthatsequestrationshouldbereplacedwithresponsiblespendingcutsinadditiontothenewrevenuefromthewealthiestAmericans,thisbudgetcallsforanyadditionallegislationchangingtheBCAtoreplacesequestrationwithanequalmixofresponsiblespendingcutstomatchthenewrevenueraisedthroughreconciliationorothermeans.

26

HouseBudgetCommitteeChairmanPaulRyan,Website,accessed1/25/13.


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Thegoalofsequestrationwastobringbothsidestothetabletoreducethedeficitinabalancedandresponsibleway.ButwhileDemocratshavebeenveryclearthatwearewillingtomakethetoughconcessionsabalancedandbipartisandealrequires,RepublicanshavebeensofocusedonprotectingthewealthiestAmericansandbiggestcorporationsfrompayingtheirfairsharethattheyverefusedtomoveoutoftheirpartisancornerandworkwithustogetadeal.Whilewehaventbeenabletogetabipartisandealyet,theSenateBudgetoffersaresponsibleand

crediblepathforward.


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Althoughtheissueoffiscalsustainabilitymusturgentlybeaddressed,fiscalpolicymakersshouldnot,asaconsequence,disregardthefragilityofthecurrenteconomicrecovery.

Fortunately,thetwogoalsofachievingfiscalsustainabilitywhichistheresultofresponsiblepoliciessetinplaceforthelongertermandavoidingthecreationoffiscalheadwindsforthecurrentrecoveryarenotincompatible.

Actingnowtoputinplaceacredibleplanforreducingfuturedeficitsoverthelongerterm,whilebeingattentivetotheimplicationsoffiscalchoicesfortherecoveryinthenearterm,canhelpservebothobjectives.27FederalReserveChairmanBenBernanke,August2011Sinceexpertsandeconomistsacrossthepoliticalspectrumagreethatitmakessensetoboosttheeconomyintheshorttermwhiletacklingourdeficitanddebtresponsiblyoverthemediumandlongterm,theSenateBudgetincludesa$100billiontargetedjobsandinfrastructurepackagethatwouldstartcreatingnewjobsquickly,beginrepairingtheworstofourcrumblingroads,bridges,andschools,andhelptrainourworkerstofillopenjobs.

$50billiontoputworkersbackonthejobrepairingournationshighestprioritydeterioratingtransportationinfrastructure.Fixingthesecrumblingroads,bridges,andairports,aswellasupdatingourmasstransit,willnotonlycreatejobsintheshortterm,itwillalsoreducethetimefamilieshavetositintraffic,helpsmallbusinessesdelivergoodstotheircustomersquickerandcheaper,andlaydownastrongfoundationforlongtermeconomicgrowthincommunitiesacrossthecountry.

$10billiontocreatejobsfixingournationsmajordamsanddredgingandmaintainingeconomicallycriticalports.Thiswillmoveworkersintojobswheretheywillhelplocaleconomiesandsmallbusinessesbymakingsurekeyportsremainopenandcompetitive,anditwillprotectfamiliesbymakingsurecriticalwatersuppliesremainsafeanduncontaminated.

$10billiontocreateaninfrastructurebankthatwillleverageinvestmentfromtheprivatesectororothersourcesoffundingtoprovidedirectloansandloanguaranteesforsignificantinfrastructureprojectslikeroadsandbridges,railandtransitsystems,portandwaterinfrastructure,orothercriticalinvestmentsthatwouldhelptheeconomy.

$20billiontojumpstartrepairsandtechnologyinfrastructureinvestmentsinschoolsacrossAmerica

thatarecrumblingorlackcriticaleducationaltoolslikebroadbandaccessthatarerequiredinthe21st

centuryeconomy.Thiswillhelpengineersandconstructionworkersgetbackonthejob,anditisaninvestmentinourstudentsthatwillpayoffdowntheline.

27

ChairmanBenBernankespeechattheFederalReserveBankofKansasCityEconomicSymposium,JacksonHole,Wyoming,August

26,2011


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$10billiontoinvestinworkertrainingprogramsforyoungpeopleandadultstoexpandtheirskillsandallowthemtomoveintooneoftheapproximately3.6millionjobopeningsthatbusinessesacrossthecountryarestrugglingtofill.28Thisinvestmentwillgotowardtargetedprogramsthathavedocumentedoutcomesandreturnsforemployersandemployees,andthatarespecificallydesignedtomeettheneedsofemployersinfieldsthatareindemandnow,andthatareexpectedtobeinstrongdemandforyearstocome.

TheSenateBudgetincludestheseinvestmentsandurgestheappropriateCongressionalcommitteestomovequicklytopasslegislationthatwillmeetthesegoalsandstartcreatingjobstodaywhileinvestinginlongtermeconomicgrowth.

28

BureauofLaborStatistics,JOLTSTable1,02/12/13


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Ourfamilies,workersandsmallbusinessownerscurrentandfutureareournationsgreatestresource.Wecannotexpecttoleadthewayinthe21stcenturyunlessourworkforceisskilled,oursmallbusinessownershavethesupporttheyneedtosucceed,andourfamiliesaresecure.TheSenateBudgetthereforeprioritizeseducationandtrainingfromearlychildhoodthroughcareer,expandingopportunityforjobcreatingsmallbusinesses,andmakingitpossibleforfamiliestoachievethedreamofhomeownership.Thebudget:

Protectsinvestmentsineducationandjobtraining,includingexpansionofinnovativeearlylearningprograms,keepingstudentloansaffordable,andimplementingprovenjobtrainingmodelstailoredtomatchemployerdemand;

Makessupportforsmallbusinessaprioritybymaintainingeffectivepublicprivatepartnershipsthatprovidegrowthcapitaltostartups,andcontinuingSmallBusinessAdministration(SBA)smallbusinessloanprograms;and

Helpsputhomeownershipwithinthereachofresponsible,hardworkingmiddleclassAmericansbyensuringthemarketisaffordable,accessible,andstable.

Anapproachthatdrasticallycutstheseinvestments,aspastHouseRepublicanbudgetshave,wouldnotonlymakeitharderformanystudentsandfamiliestoreachtheirgoals,butitwouldalsoseriouslyunderminethefundamentalstrengthbehindoureconomicleadership:theskill,drive,andinnovativespiritoftheAmericanpeople.

Whilethisbudgetseekstoaddressthelongtermdeficitanddebtchallengesourcountryfaces,italso

providestheframeworknecessarytoaddressothergrowingchallenges,includingournationsskillsandeducationdeficits.Failingtoinvestinschools,studentaid,andworkertrainingincreasestheskillsgap,furthersincomeinequality,andfailstofullytapthepotentialofourgreatestresourcetheAmericanpeople.Thisisabadoutcomeforourstudents,workers,andbusinesses,anditisdevastatingforoureconomyoverthelongterm.Investmentsineducation,fromearlychildhoodprogramsthroughcollege,aresomeofthesmartestandmostimportantthefederalgovernmentcanmake.EconomistshavelongstudiedthereturnstoeducationandhaveproducedestimatesindicatingthateachadditionalyearofschoolingappearstoraiseearningsbyabouttenpercentintheU.S.,29withstrongevidenceofreturnstoeducationatalllevelsandanincreasedreturnforhigherlevelsofeducationinrecentdecades.30Accordingtoastudydoneatthe

UniversityofChicagobyNobelPrizewinnerDr.JamesHeckman,eachdollarinvestedinhighqualityearlychildhoodeducationprogramshasa14percentrateofreturnthroughbettereducationaloutcomes.31

29

Krueger,AlanandLindahl,Mikael,EducationforGrowth:WhyandForWhom?December2001.30

Autor,David,ThePolarizationofJobOpportunitiesintheU.S.LaborMarket,ImplicationsforEmploymentandEarnings,April

2010.31

Heckman,James,Moon,SeongHyeok,Pinto,Rodrigo,Savelyev,Peter,andYavitz,Adam,TheRateofReturntotheHigh/Scope

PerryPreschoolProgram,November2009.


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FederalReserveChairmanBenBernankehasacknowledgedtheimportanceoftheseprograms,saying,[o]necriticalmeansoffosteringhealthyeconomicgrowthisbyensuringanadequateinvestmentinhumancapitalthatis,intheknowledgeandskillsofourpeople.Noeconomycansucceedwithoutahighqualityworkforce,particularlyinanageofglobalizationandtechnicalchange.32TheSenateBudgettakesthepositionthatinvestmentsineducationandtrainingarecriticaltoournationslongtermprosperityandcompetitivenessandoughttobeprotected.

Wesimplycannotexpectoureconomytogrowinawaythatcreatesbroadbasedprosperityifwecontinueallowingourskillsandeducationdeficitstoincrease.Ourbusinessesaregoingtobecreating21stcenturyjobsandweneedourstudentsandworkerstobereadytomeettheirneeds.Thisisespeciallyimportantwhenitcomestomakingsurelowincomecommunitieshavethesupporttheyneedtosucceed.Althougheducationisprimarilyastateandlocalresponsibility,federalfundingmakesacriticalcontributiontoschoolsandcommunitiesacrossthecountry.TheSenateBudgetinvestsineducation,reflectingourcommitmenttoreachatriskandlowincomestudents,closetheachievementgap,andpromoteeducationalequity.

Earlylearning

Toremaincompetitiveinaglobaleconomy,ournationmustprovideourstudentswithaworldclasseducationthatputsthemonthepathtocollegeandcareerreadiness.Researchshowsthatachildsearlyyearsareacriticaldevelopmentstage,andearlychildhoodeducationoffersbenefitsextendingthroughthefirstyearsofschoolandbeyondintermsofbothcognitiveandnoncognitiveskills.33Childrenwhoattendhighqualityprekindergartenprogramsarelesslikelytobeheldbackinschool,requireremedialeducation,engageincriminalactivity,orusesocialsafetynetprogramslaterinlife.Theyarealsomorelikelytograduatefromhighschoolandhavehigherearningsasadults.Infact,therateofreturnforeachdollarinvestedinhighqualityearlylearningprogramsis$60$300overthelifetimeofthechild.34Investmentsinearlylearningaresomeofthesmartestthefederalgovernmentcanmake.TheSenateBudgetrecognizesthathighqualityinvestmentsinearlychildhoodeducationprogramsresultinbetterhealth,learning,andeconomicoutcomeslaterinlife.WhiletheHouseRepublicanapproachwouldrequiredrasticcutstoinvestmentsinearlychildhoodeducation,thisbudgetreflectstheimportanceofhelpingourchildrengetastrongstarttotheiracademicandprofessionalcareers.

TheSenateBudgetincludesstrongsupportforHeadStartandEarlyHeadStart.Thesecorecommitmentscurrentlyservealmostonemillionlowincomechildrennationwide,enhancingtheircognitive,social,andemotionaldevelopment.

TheSenateBudgetalsoinvestsintheChildCareDevelopmentandBlockGrant(CCDBG),whichprovidesvitalsupportforworkingfamiliesandassistsinclosingtheachievementgapforlow

32

SpeechbyFederalReserveChairmanBenBernankeatthe2011AnnualAwardsDinneroftheCitizensBudgetCommission,

3/2/2011.33

Heckman,James,SkillFormationandtheEconomicsofInvestinginDisadvantagedChildren,6/30/06andHeckman,James,The

CaseforInvestinginDisadvantagedYoungChildren,accessed03/09/13.34

Heckman,James,LettertotheJointSelectCommitteeonDeficitReduction,9/21/11.


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incomechildren.Researchhasshownthatparentsreceivingchildcaresubsidiesaremorelikelytobeemployed,workmorehours,sustainemployment,andearnhigherwagesthantheirpeers.35

TheSenateBudgetalsoreflectsimportantnewinvestmentstoensurethatmorechildrenhaveaccesstovoluntarypublicpreschoolprogramsthroughfederalstatepartnerships.Thisexpansionofhighqualityprekindergartenwillhelpallowmorechildrenarriveatkindergartenreadytosucceed.

Sinceparentsaretheirchildsfirstandmostinfluentialteacher,theSenateBudgetsupports

expansionoftheexistingMaternal,Infant,andEarlyChildhoodHomeVisiting(MIECHV)Program,whichwasenactedintheAffordableCareAct.Thisprogramimprovesmaternalandchildhealthandincreasesschoolreadinessinvulnerablepopulationsbydeliveringvoluntaryparenteducationandfamilysupportservicesdirectlytoparentswithyoungchildren.Thehomevisitingprogramfundseffective,researchbased,andcostefficientearlylearningopportunities,andshouldbeextendedandexpanded.

ThesevitalinvestmentsstandinsharpcontrasttoHouseRepublicanproposals,which,combinedwithsequestration,wouldcutalmost200,000vulnerablechildrenfromHeadStartinFiscalYear2014alone36andwouldslashCCDBGdiscretionaryfundingby19percent.Whilethislackofinvestmentwouldleavethousandsofchildrenbehindthecurveofkindergartenreadiness,itwouldalsohaveanimmediateeffectonemployment,directlycuttingthousandsofHeadStartpositionsandreducingsupportforworkingparentswhowouldstruggletostayemployedwithoutchildcare.Investmentsinearlychildhoodeducationhavebeenwidelyrecognizedasvaluablebyawiderangeofstakeholders,includingbusinessleaders,lawenforcement,andscholars.Inarecentopinionpiece,JohnEPepper,Jr.,theformerchairmanandchiefexecutiveoftheProcter&GambleCompanyandaformerchairmanofTheWaltDisneyCompany,andJamesM.Zimmerman,aformerchairmanandchiefexecutiveofMacys,Inc.wrote:Wehavespentmostofourcareersinbusinessandhavecometosupportquality

prekindergartenforallchildren,especiallythosewhosefamiliescannotaffordit,becauseweknowtheseprogramswork.Theonlyquestionishowtobringthemtoahugescale.Ournationsfuturedemandsit.37

ElementaryandsecondaryeducationThenationseconomicfutureisdependentonastrong,educatedworkforce.Today,however,manyschoolsarestrugglingtoprepareouryoungpeopleforsuccessinschoolandwork.Morethan20percentofstudentsdonotgraduateontime,ifatall.Theachievementgapbetweenwhitestudentsandminoritystudentscontinuestobeapervasiveproblem,andonethatdeservesfederalattentionandresources.Forstudentsofcolor,approximatelyonethirddonotgraduateontime,ifatall.38AndHispanicandAfricanAmericanstudentscontinuetolagbehindtheirwhitepeersinmathematicsandreadingachievement.39

35

Schaefer,Stephanie,Kreader,J.Lee,andLawrence,Sharmila,ParentEmploymentandtheUseofChildCareSubsidies,2006.36

NationalEducationAssociation,HouseFY2013BudgetResolutionImpactonHeadStart,3/26/12.37

CapitalistsforPreschool,Pepper,John.E.Jr.,Zimmerman,James,NewYorkTimes,3/1/13.38

DepartmentofEducation,NationalCenterforEducationStatistics,PublicSchoolGraduatesandDropouts:SchoolYear2009

2010,January2013.39

NationalCenterforEducationStatistics,HowHispanicandWhiteStudentsinPublicSchoolsPerforminMathematicsandReading

ontheNationalAssessmentofEducationalProgress,June2011andNationalCenterforEducationStatistics,HowBlackandWhite

StudentsinPublicSchoolsPerforminMathematicsandReadingontheNationalAssessmentofEducationalProgress,July2009.


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ThefailuretofullytapthepotentialofallyoungAmericanshasdirectanddamagingeconomicconsequences.Studentswhodonotcompletehighschoolearnabout$260,000lessovertheirlifetimesthantheirpeerswhograduate.40Thosewithahighschooldiplomaorlessaremorelikelytobeunemployed41,andtobeamongthelongtermunemployed.42Ifthecountrys23millionhighschooldropoutshadinsteadgoneontograduate,thecountrywouldgarner$50billionannuallyinincreasedfederalandstateincometaxes.43

Aswearestrugglingtoprepareourstudents,othercountriesaregainingasignificantandlastingadvantage.Today,internationalcomparisonsshowthatinliteracy,andparticularlyinmathematics,andscience,U.S.studentslagbehindmanyoftheirpeersinourbiggestglobalcompetitorcountries.44TheSenateBudgetreflectstheneedtoinvestinournationsyoungpeople.Itstronglysupportselementaryandsecondaryeducationfundingtostatesanddistricts,includingprogramslikeTitleI,toimprovetheeducationoflowincomechildren,andIDEA,whichprovidesearlyinterventionandspecial

educationservicestochildrenwithdisabilities.Additionally,continuedinvestmentsinliteracy,STEM,andcareerandtechnicaleducationprogramswillhelpensurestudentsareonapathtocollegeandcareerreadinessbyhighschoolgraduation.WhiletheSenateBudgetprovidesvitalsupportforK12educationprograms,HouseRepublicanswouldcutprogramsthatsupportstudents,leavingourchildrenunpreparedtocompeteinthe21stcenturyglobaleconomy.TheRepublicanplanwouldcutIDEAby19percent,whichwouldshiftthecostofprovidingspecialeducationservicesforover1million

childrentostatesandschooldistricts,renegingonthefederalgovernmentsalreadywoefullyneglectedpromisetocover40percentofthecostofIDEA.45Additionally,theHouseRepublicanplanwouldslash$2.76billionfromTitleI,reducingoreliminatingmuchneededsupportiveservicesforover4millionlowincomechildreninfiscalyear2014alone.46

Thesecutswouldcontinueadisturbingtrendwheretheshortfallinfederaleducationfundinghasgrownlargerandlargereachyear.

40

TeachersCollegeSymposiumonEducationalEquity,TheSocialCostsofInadequateEducation,10/26/05.41

BureauofLaborStatistics,TheEmploymentSituationFebruary2013,03/08/13.42

JointEconomicCommittee,AddressingLongTermUnemploymentAfterTheGreatRecession:TheCrucialRoleofWorkforce

Training,August2011.43

TeachersCollegeSymposiumonEducationalEquity,TheSocialCostsofInadequateEducation,10/26/05.44

NationalCenterforEducationStatistics,HighlightsfromPISA2009,December2010.45

NationalEducationAssociation,HouseFY2013BudgetResolutionImpactonSpecialEducationGrantstoStates,3/26/12.46

NationalEducationAssociation,HouseFY2013BudgetResolutionImpactonGrantstoLocalEducationalAgencies,3/26/12.


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PostsecondaryeducationandtrainingTowintheglobalraceontalent,ournationmustprovidestrongeducationalopportunitiesfrompreschooltocareer.Thisrequiresmaintainingthesuperiorityofourcollegesanduniversitiesandhelpingstudentsaffordtuition.Butwemustalsoconfrontthegrowingneedforpostbaccalaureatedegreesandcredentialsthatcanhelpfillgapsinspecificskillstodaysemployersdemand.TheSenate

Budgetmovesusforwardoneachofthesecrucialpriorities.Inthe2011reportTheCollegePayoff,expertsverifythatacollegedegreeiskeytoeconomicopportunity.47Theearningsadvantagetoattendingcollegehasgrownenormouslyinrecentdecades,48andaworkerwithamastersdegreeearnsnearlytwiceasmuchasapersonwithahighschooldegree.Highereducationprovidesanimportantpathwaytothemiddleclass;studentsfromthebottomincomequintilearemoreupwardlymobilethantheirparentswhentheyhaveadegree.4950Asacountry,weneedtoprepareourstudentstocompeteforhighskill,highwageorhighdemandjobs.Increasingly,theseoccupationsrequirepostsecondarycredentialsordegrees.Forexample,duringtheGreatRecession,fouroutoffivejobslostwereheldbyAmericanswithahighschooleducationorless.Bycomparison,Americanswithabachelorsdegreeorhighersteadilygainedjobsduringtherecessionandhaveseenanincreaseofmorethan2millionjobsduringtherecovery.BringingdownthecostsofhighereducationDespitethebenefitsofhighereducationforindividualsandoureconomyasawhole,recenttrendsindicatethattherearebarrierstobothaccessandcompletion.Nearlyhalfofallcollegestudentsdonotcompletetheirdegreewithinsixyears,51cumulativestudentloandebtisnow$1trillion,52andstudentloandefaultratesarerising.53Inaddition,collegeisincreasinglyunaffordable.Tuitionandfeesaregrowingatratesaboveinflationandcollegecostsarebeingshiftedtostudentsandtheirfamiliesintwokeyways.First,stateshavereducedtheirsupportforhighereducation.Andwithadditionalfederalspendingcutsfromsequestration,statebudgetaregoingtofacefurtherfiscalchallenges.54

47

CenteronEducationandtheWorkforce,TheCollegePayoff:Education,Occupations,LifetimeEarnings,8/5/2011.48

Autor,David,ThePolarizationofJobOpportunitiesintheU.S.LaborMarketImplicationsforEmploymentandEarnings,April

2010.49

EconomicMobilityProject,GettingAheadorLosingGround:EconomicMobilityinAmerica,02/26/2013.50

DepartmentoftheTreasury,TheEconomicCaseforHigherEducation,2012.51

HCMStrategies,AmericanDream2.0,03/08/13.52

NewYorkFederalReserve,QuarterlyReportonHouseholdDebtandCredit,February2013.53

DepartmentofEducation,FirstOfficialThreeYearStudentLoanDefaultRatesPublished,09/28/12.54

PewCenterontheStates,TheImpactoftheFiscalCliffontheStates,03/08/13.


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Evenwhileacollegeeducationhasbecomemorenecessary,collegecostshaveaccelerateddramatically.Thisistrueevenatpublicuniversitiesbecausestategovernmentshavehadtocutbackconsiderablyonsupport.Students

areincreasinglybearingagreatershareofcollegecosts.55

Butgiventhecurrentfiscalenvironment,taxpayerscannolongeraffordtokeepsubsidizingescalatingtuitioncosts.Wemustaskstatesandcollegestobepartofthesolution.Tothatend,theSenateBudgetassumesCongress

willenactproposalstoreducecollegecostswhileexpandingcollegeaccessandcompletion.

SecuringPellgrantsThePellgrantprogram,establishedin1972,hasservedmorethan60millionstudents56andcurrentlyhelpsoverninemillionlowincomestudentsaccesshighereducation.57WhiletheHouseRepublicanapproachwouldseverelyreduceourabilitytomakecollegeaffordableformillionsofstudentsthroughPellgrants,theSenate

Budgetreflectsthebeliefthatexpandingcollegeaccessisapriorityandmaintainsastrongcommitmenttothisprogram.Pellgrantsarecriticaltoexpandingaccesstohighereducationforlowincomestudents.Unlikealoan,Pellgrantsdonothavetoberepaid.Inthecurrentacademicyear,themaximumPellawardis$5,550.Thiscoversaboutonethirdoftuitionandfeesatapublicfouryearuniversity.ThePellgrantprogramhasbeenrunningshortfallsformanyyears.EligibilitychangesandtheeconomicrecessionexpandedPellenrollments,58whichincreasedthecostsoftheprogram.Congresslimitedstudentaideligibilityandbenefits59onanadhocbasisinordertoreducePellcostsandaddressthe

55

USDepartmentofTreasury,TheEconomicsofHigherEducation,December2012.56

DepartmentofEducation,StatementbyArneDuncan,06/22/12.57

DepartmentofEducation,20102011FederalPellGrantEndofYearReport,03/08/13.58

DepartmentofEducation,FY12BudgetJustifications,StudentFinancialAid,02/14/11.59

CommitteeforEducationFunding,TheBudgetResponseforFiscalYear2013,03/02/13.


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shortfall.Aftermanyyearsoflargeshortfalls,enrollmentsestimateshavebeenrevisedandthePellgrantprogramhasasurplusoffundsforthecurrentfiscalyear(academicyear20132014).60WhileDemocratsarecommittedtoexpandingaccesstohighereducationforallAmericans,RepublicanproposalswouldhaveeliminatedtheinflationadjustmenttoPellgrants,cuttingamillionstudentsoutoftheprogram,reducingthemaximumPellawardandincreasingcollegecostsforstudentsandtheirfamilies.61

KeepingstudentloansaffordableCreatedinthe1960s,thestudentloanprogramprovidesavitalsupportsystemthathashelpedmillionsofAmericansaccesspostsecondaryeducation,pavingthewayforbetterjobsecurity,moreearningspotential,andincreasedupwardmobility.In2010,Congresseliminatedtheduplicativebankbasedstudentloanprogramandusedthesavingstoinvestinourstudentsandreducethedeficit.Today,taxpayerssavebillionsofdollarsbylendingdirectlytostudentsthroughtheDepartmentofEducation.Thesefederalstudentloanshavebeneficialprotections:interestratesarefixedandoftenlowerthanprivatestudentloans,thereareopportunitiesforrepaymentreliefthroughdeferment,forbearance,loanconsolidationandincomebasedrepayment,andthereareseveralloanforgivenessprograms.Thefederalgovernmentprovidesover$110billionannuallyforstudentloans.CongressionalBudgetOffice(CBO)datashowsthatoveraquarteroftheseloansaresubsidizedloans62forlowandmiddleincomestudents.63Whentheaveragecostofoneyearofattendanceatafouryearpubliccollegeisover$17,000,64andmorethantwicethatamountatprivatenonprofitandforprofitcolleges,65theseloansarecriticaltoexpandingcollegeaccess.TheSenateBudgeteliminatesthestudentloanfeeincreasesfromsequestration,keepsstudentloansaffordablebyretainingsubsidizedloansandimportantrepaymentprograms,andfacilitatespassageoflegislationtoensurestudentloaninterestratesremainaffordablegiventhechallengingeconomicclimate.Jobtraining

TheSenateBudgetsupportsinvestmentsinprovenstrategiestobuildskills,facilitatematchesbetweenemployersandemployees,andeliminatefrictionsthatkeepwillingworkersfromparticipatinginthelabormarket.Whiletherehavebeensignsofgrowingeconomicactivityduringtherecovery,therehavealsobeensignsthatemployersarehavingahardtimefillingjobs.Indeed,numeroussurveysandreportsdocumentsignificantskillgapsamongjobcandidatesthatpreventemployersfrombeingabletofilltheiropenings.66

60

CongressionalBudgetOffice,PellGrantProgramsFebruary2013Baseline,02/06/13.61

PellGrantsForPoorStudentsLose$170BillionInRyanBudget,HuffingtonPost,03/27/12.62

CongressionalBudgetOffice,StudentLoanProgramsFebruary2013Baseline,2/06/13.63

CongressionalResearchService,Table3,InterestRatesonSubsidizedStudentLoansforUndergraduateStudents,01/10/13.64

CollegeBoard,TrendsinHigherEducation,PublishedPricesNational,Table2,03/08/13.65

NationalCenterforEducationStatistics,DigestofEducationStatistics,2011,Chapter3,03/08/13.66

SocietyforHumanResourceManagement,TheIllPreparedU.S.Workforce,3/08/13,andManufacturingInstitute,Boiling

Point?TheSkillsGapinUSManufacturing,2011.


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Whileimportanteffortsareunderwaytoreformtheeducationsystemtobettermeettheneedsofemployersinthefuture,weknowthat60percentoftheworkforceourcountrywillhaveavailablein2020isalreadyintheworkforcetodaybeyondthereachofhighschoolanddependentonjobtrainingandworkforcedevelopmentsystemsinthepostsecondaryworld.Ifourworkersdonothavetheskillstheyneedtofillthejobsoftodayandtomorrow,oureconomyandbusinessespaytheprice.Amongournationsmanufacturers,67percentreportamoderatetoserious

skillsgapintheirskilledpositions,withthegapreportedasupto83percentinsomesectors.75percentsaythatthisskillsgaphasnegativelyimpactedtheirbusiness,and56percentexpectittoonlygetworse.67U.S.investmentinemploymentandtrainingprogramsisfarbelowthatofothercountries.Weinvestjust0.1percentofourGDPonactivelabormarketprograms(training,counseling,jobmatching,etc.),whileKoreainvests0.42percentofitsGDP,Germanyinvests0.9percentofitsGDP,andDenmarkinvests1.9percentofGDP,justtonameafew.68FundingforthethreemajorgrantprogramsunderTitleIoftheWorkforceInvestmentActfellroughly20percentbetween2000and2012.69Thisistrueatatimewhenourcountrysworkforceismorethan50percentlargerthanitwasin1980,70andtheeconomyasmeasuredbyGDPismorethantwiceaslarge.71Astechnologiesandmarketsevolveovertime,workersneedtobelifetimelearnersandadapttheirskillsappropriately.Thisbudgetinvestsinprovenstrategiesthattrainworkerstomeettheneedsoftodaysemployers,andsupportsasystemoflifelongskilldevelopment.Onthejobtrainingandrelatedapproachessuchascustomizedtraininginvolvesemployersdirectlyinthedesignanddeliveryoftrainingtoensurethatemployersareprovidedwiththespecificknowledge,skillsandabilitiesrequiredforfieldsthatareindemandnow,andthatareexpectedtobeinstrongdemandforyears.Inaddition,theSenateBudgetinvestsinsector,careerpathway,registeredapprenticeship,andreemploymentmodelsthathavedocumentedoutcomesandreturnsforemployersandemployees,andthatarespecificallydesignedtomeetthecommonneedsofemployersinindemandsectors.Twopopulationsthathavebeenespeciallyhardhitbytheeconomicdownturnandslowrecoveryarethelongtermunemployedandyouth,eachofwhichstandtoremaindisproportionallyimpactedifproactivestepsarenottakentosupportthem.Longtermunemploymentcausestremendoussufferingforunemployedindividuals,butitcanalsohurteconomicgrowthinthelongrun.Persistentlongtermunemploymentpromptssomeworkerstoleavetheworkforceanderodestheskillsofmanyotherworkers.Thismakesitharderforthemtofindworkinthecomingyears.Onbalance,thismeansfewerworkersworking,andthosethatareworkingwillhaveweakerskills,limitingtheeconomysabilitytoproduce.72TheCBOestimatesthatthispersistentlongtermunemploymentwillloweroutputbyaboutonehalfpercentofGDPby2023.73Theinvestmentsin

workforcedevelopmentandjobtrainingprogramswilltargetaportiontospecificallymeetingtheneedsofthelongtermunemployed.

67

Ibid.68

OECD,PublicExpenditureofLMPbyMainCategories,EmploymentOutlook,2012.69

OfficeOfManagementandBudgetFiscalYear2013,Table3.2,accessed03/11/13.70

CalculationsbasedonToossi,Mitra,Acenturyofchange:theU.S.laborforce,19502050,Table5,May2002.71

U.S.BureauofEconomicAnalysis,TableofU.S.RealGDP.NIPA 1.1.5,accessed03/09/13.72

CongressionalBudgetOffice,BudgetandEconomicOutlook:FiscalYears20132023,February2013.73

Ibid.


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YoungworkersalsofacechallengesthatcanhavesimilarlydamagingconsequencesforeconomicgrowthYouthemploymentisatitslowestlevelsinceWorldWarII;onlyabouthalfofallyoungpeopleintheU.S.(ages16to24)heldjobsin2010.74Theissueisnotjustaboutyouthemployment.ASeptember2012reportfoundthatoneoutofeverysevenyouthages16to24aredisconnected;thatis,areneitherinschoolorworking.Thetotalcosttothecountryisestimatedtobeapproximately$94billionannually.75Inaddition,workerswhoenterthelabormarketduringadownturnmayfacelongtermconsequences.Forexample,collegegraduatesenteringtheworkforceduringarecessionmayhavelowerinitialwages

anditmaytakeyearstocatchuptosimilarworkerswhograduatedingoodtimes.76Highyouthunemploymentisparticularlydamagingbecauseearlyworkexperiencehasproventobevitaltolongtermcareersuccessandincomelevels,reducedlikelihoodofunemploymentlaterinlife,andreducedsocialcostsbornebythegovernmentandtaxpayers.TheSenateBudgetsinvestmentsinworkforcedevelopmentandjobtrainingwillalsotargetaportiontodisconnectedyouththroughonthejobtraining,summerandyearroundemployment,andtheuseofcareerpathwaystopreparethemforexistingjobsandfortheirlongtermcareersuccess.Alloftheseeffortswillfocusonfillinggoodjobsthatwillhelpgrowtheeconomyandexpandthemiddleclass.However,thenatureofworkhaschangedoverthepastseveraldecades.Asacountry,wemustfocusonpreparingourworkforceforthejobsthatareavailabletodayandwillbeopeninthefuture.Oneexampleisthefieldofnursing,whichrepresentsthelargestsegmentofthehealthcareworkforcewithmorethan3millionmembers.77Overthenexttenyears,theneedfornewnurseswillspikedramaticallyasourexperiencednursesretire.ArecentHealthAffairsarticleindicatesthattheshortfallofregisterednurseswillgrowtoabout260,000by2025.78Additionally,theAssociationofAmericanMedicalCollegesestimatesthatby2020,theU.S.willfaceashortageofmorethan90,000physiciansandby2025thatshortagewillgrowtomorethan130,000.79TheSenateBudgetcontinuestofundcriticalprogramsthatwillhelptoeducateandtrainthenextgenerationofhealthcareprovidersaspartofitstargetedinvestmentsinskillsdevelopmentandjobtraining.Further,thebudgetincludesfundingfortheNationalHealthServiceCorpstoincreasethenumberofhealthprofessionalspracticinginmedicallyunderservedareas,suchasphysicians,dentists,mentalhealthproviders,andnursepractitioners.Thesefundsareespeciallycriticalthisyearinlightofthegrowingandagingpopulationandtheupcominginsuranceexpansions.Investmentsinourhealthcareworkforcealsoboostoureconomynotonlycreatingjobs,butalsohelpingtokeeptheAmericanworkforcehealthyandproductive.Althoughworkforcetraininghasbecomemoreimportantthaneverintodayseconomy,theHouseRepublicanshaveproposeddrasticcutstoinvestmentsintheseprograms.Lastyear,HouseRepublicansproposedcuttingtheEmploymentandTrainingAdministrationsbudgetinhalf,effectivelyeliminatingall

74

Sum,Andrew,TheDeteriorationintheLaborMarketFortunesofAmericasYoungAdultsDuringtheLostDecadeof20002010,

9/29/11.75

BurdSharps,SarahandLewis,Kristin,OneinSeven:RankingYouthDisconnectioninthe25LargestMetroAreas,September

2012.76

Oreopoulos,Phillip,vonWachter,Till,andHeisz,Andrew,TheShortandLongTermCareerEffectsofGraduatinginaRecession:

HysteresisandHeterogeneityintheMarketforCollegeGraduates,2012.77

InstituteofMedicine,TheFutureofNursing:LeadingChange,AdvancingHealth,2010.78

Buerhaus,Peter,Auerbach,David,andStaiger,Douglas,TheRecentSurgeinNurseEmployment:CausesandImplications,

06/12/09.79

AmericanAssociationofMedicalColleges,PhysicianShortagestoWorsenWithoutIncreasesinResidencyTraining.


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fundingfortheadult,dislocatedworker,andyouthgrantprogramsundertheWorkforceInvestmentAct,discontinuingtheYouthBuildprogram,andcuttingJobCorpsbymorethanhalf.Basedonservicelevelsatthattime,thesedrasticcutswouldhaveeliminatedcriticalworkforcedevelopmentandjobtrainingservicestomorethan8millionjobseekersandworkerseachyear,including130,000veterans.

Americansmallbusinesseshavelongbeenthebackboneofoureconomy.FromhighgrowthandhightechfirmstoMainStreetstorefronts,ournationssmallbusinessesdriveentrepreneurshipandinnovation.Smallbusinessesarejobcreatorsandplayavitalroleinoureconomicrecovery.Fortwodecades,smallandnewbusinesseshaveledjobcreationintheU.S.Foreverythreenetnewjobs,twowerecreatedbysmallandnewbusinesses.Halfoftheprivatesectorworkforceisemployedbysmallbusinessesand28millionsmallfirmscurrentlyemploy60millionAmericanworkers.80SmallbusinessesdriveinnovationinAmerica.Smallbusinessesemploynearly40percentofournationsscientistsandengineersandproducemorethan14timesthenumberofpatentsthandolargebusinesses

anduniversities.81Smallbusinesseshavetimeandtimeagaindemonstratedtheyarewillingtotakeonthehighrisk,highrewardresearchthatdrivesinnovationand,byextension,ournationseconomy.82Overthepastseveralyears,thevolatilityinthemarketplacecausedbythefinancialcrisisandGreatRecession,coupledwithlackofconsumerdemandandlimitedaccesstocapital,contributedtowhatDr.MartinN.Bailey,oftheBrookingsInstitution,characterizedasabigtollonsmallbusiness.83Underthebestofcircumstances,startupsmallbusinessfirmshavehighfailurerates,withhalffailingwithinthefirstfiveyears.84Compoundingthisfailurerate,followingtheGreatRecessioncreditstandardstightened,causingmanysmallbusinessestostruggleforaccesstocapital.85Infact,becausemanyentrepreneurshistoricallylookedtohomeequityasasourceofcapital,thecollapseofthehousingmarketcontributedtoasignificantdropinthenumberofstartupfirms.86

Whilesmallbusinessesarebeginningtolaunchandhireagain,manycontinuetofeeltheeffectsoftherecession.NowmorethaneveritiscriticalthatCongressinvestinprogramsandsupportpoliciesthatwillhelpAmericansmallbusinessesrebuild.Yetlastyear,theHouseRepublicansproposedcutstosmallbusinessassistance,87andin2010,HouseRepublicansvotedagainsttheSmallBusinessJobsAct,whichincreasedcontractingopportunitiesforsmallbusinessesandalsoincreasedtheSmallBusinessAdministrationslendingcapacitytofirms.88

80

National

Economic

Council,

Moving

Americas

Small

Businesses

&

Entrepreneurs

Forward:

Creating

an

Economy

Built

to

Last,

May2012.81

Wessner,CharlesW.,NationalResearchCouncil,GovernmentProgramstoEncourageInnovationbyStartups&SMEs:TheRoleof

InnovationAwards,2009.82

Ibid.83

MartinN.Bailey,TestimonybeforetheU.S.HouseCommitteeonSmallBusiness,2/1/2012.84

Ibid.85

Ibid.86

Ibid.87

H.R.Rep.No.112421,at71(2012).88

156Cong.Rec.H4618(dailyed.June17,2010).


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WhereasRepublicanswouldcutprogramsthatsupportournationssmallbusinesses,DemocratsviewinvestmentsinsmallbusinessesasinvestmentsinAmericasfuture.SincePresidentObamatookoffice,DemocratsinCongresshaveworkedwiththeadministrationtopass18directtaxbreaksforsmallbusinesses.89Theseinclude100percentexpensingofnewinvestments,whichallowbusinessestoimmediatelydeductthefullcostofmachinery,equipment,andotherqualifyingproperty,taxbreaksforsmallbusinessesthathireunemployedveteransandthosewithserviceconnecteddisabilities,andasmallbusinesshealthcaretaxcreditcoveringupto35percentofaneligibleemployerscontributionto

employeehealthinsurancepremiums.90Thistaxcredit,createdundertheAffordableCareAct,increasesto50percentofanemployerscontributionin2014.91Smartinvestmentinournationssmallbusinessesalsomeanshelpingbusinessesgrowfromsmalltolarge.ProgramssuchastheSmallBusinessInvestmentCompaniesinitiative,andtheSmallBusinessInnovationResearchandSmallBusinessTechnologyTransferprograms,enablehighgrowthfirmstoleveragecapitalinvestments,spurringjobgrowthandinnovation.InFiscalYear2011,1,300smallbusinesses,inindustriestouchingeveryaspectofAmericanlife,benefitedfromfinancingprovidedthroughtheSmallBusinessInvestmentCompanies(SBIC)initiative.92TheSBIC,apublicprivatepartnershipsupportedbytheSmallBusinessAdministration,providesgrowthcapitaltopromisingsmallbusinessthroughoutAmerica.InFiscalYear2012,$3.13billioninfinancingwasinvestedinsmallbusinessesthroughtheSBICinitiative.Twentyninepercentofthebusinessesfinancedthatyearwereminorityorwomenownedsmallbusinesses,orwerelocatedinlowtomoderateincomeareas.93ManyofAmericasmostwellknowncompanies,includingCostco,Amgen,Apple,Intel,andSunMicrosystems,receivedcrucialfundingthroughtheSBICinitiativeassmallbusinessesintheearlyyearsoftheirdevelopment.94BecausetheSBICinitiativeisaninnovativepublicprivatepartnership,thebillionsinfinancingprovidedtosmallbusinessesthroughtheprogramcomeatnocosttothetaxpayer.95Similarly,theSmallBusinessInnovationResearch(SBIR)andSmallBusinessTechnologyTransfer(SBIT)programs,whicharethelargestfederalresearchanddevelopmentprogramsforsmallbusiness,providecriticalfundingtohighgrowthfirmsrevolutionizingthemarketplacethroughhightechinnovation.FromtheSonicarepowertoothbrush,tothewirelesscommunicationscompanyQualcomm,highgrowthandhightechsmallbusinessesbenefitfromfederalresearchanddevelopmentdollars,enablingthemtodisruptthemarketplacewithboldideasandgroundbreakingnewtechnologies.96Atthiscriticaljunctureinoureconomicrecovery,theSenateBudgetbuildsonthesesmartinvestmentsinournationsentrepreneurs,innovatorsandsmallbusinesses.ThisbudgetsupportsprovenprogramsbyrestoringnecessaryfundingtotheSBAatpresequestrationlevels.Thebudgetsupportspublicprivatepartnerships,liketheSBICinitiativeandinvestmentinhighgrowthfirmsthroughtheSBIRandSBTTprograms.Itpromotesexpandedaccesstocapitalthroughthe7(a)loanprogram97andworksto

89

NationalEconomicCouncil,MovingAmericasSmallBusinesses&EntrepreneursForward:CreatinganEconomyBuilttoLast,

May2012.90

Ibid.91

Ibid.92

SmallBusinessAdministration,FundingtheSBICProgram:AnOverview(2013),accessed3/8/1393

SmallBusinessAdministration,SBICProgramOverview(2013),accessed3/8/13.94

Ibid.95

Ibid.96

Seealso:SmallBusinessesmakeabigimpact,U.S.SenatorMaryLandrieu,Politico,3/18/11.97SmallBusinessAdministration,7(a)LoanProgram(2013),accessed3/8/13.


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harnessesthefullpotentialofournationsentrepreneursandinnovatorsbysupportingfreecounselingandtechnicalassistancethroughtheSBA.98Ofcriticalimportance,theSenateBudgetalsoprioritizeslevelingtheplayingfieldforminorityandwomenownedsmallbusinesses,manyofwhichoperateinunderservedcommunitiesandrelyuponSBAloanstoaccesscapital.ByrestoringfundingtotheSBAatpresequestrationlevels,theSenateBudgethelpstoensurethatminorityandwomenownedsmallbusinessescancontinuetoaccessthismuchneededsourceofcapital.

Further,thisbudgetsupportstheObamaAdministrationsworktoexpandfederalcontractingopportunitiesandawardfederalprimecontractstominorityandwomenownedsmallbusinesses,ensuringthatthesefirmshaveafairshotatdoi

Foundation for Growth 3.13.13 (1)

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