New Progressive Caucus Budget Lauded as 'Ambitious Thinking We Need'

The Congressional Progressive Caucus (CPC) alternative “people’s budget” for fiscal year 2017, formally unveiled on Tuesday, which calls for enhanced investments in public infrastructure and renewable energy and public education, as well as wage growth, “would have significant, positive impacts,” according to an analysis by the Economic Policy Institute (EPI).

The proposal, titled The People’s Budget: Prosperity Not Austerity, would “help address two of the most glaring problems in the American economy today: a still-incomplete economic recovery and decelerating productivity growth,” said EPI budget analyst Hunter Blair. “Further, the budget’s target of genuine full employment is essential if low- and middle-wage workers are going to see significant gains in hourly pay in coming years.”

CPC is calling for a $1 trillion investment into transforming the country’s crumbling roads, highways, and facilities “into a 21st century network, creating jobs and improving economic opportunities in the process,” wrote Rep. Raúl Grijalva (D-Ariz.), CPC co-chair, in a statement (pdf) released Tuesday.

It also outlines plans for improved public education and debt-free college; supports wage increases and higher taxes for households making $250,000 or more a year; and allows states to transition to single-payer healthcare, among other provisions.

What does that mean for the rest of us? As EPI explains, the budget would:

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• Finally complete the economic recovery. The People’s Budget would sharply accelerate economic and employment growth, boosting GDP by 3 percent and employment by 3.6 million jobs in the near term. This would both close the CBO estimate of the output gap and (if the Fed accommodated) achieve genuine full employment with the unemployment rate reduced to 4 percent.
• Make necessary public investments. The budget finances roughly $295 billion in job creation and public investment measures in calendar year 2016 alone and roughly $565 billion over calendar years 2016–2017, which will rapidly reduce labor market slack and restore the economy to full health. Further, the budget continues strong public investments even after full employment is achieved, which would help reverse recent declines in productivity growth.
• Facilitate economic opportunity for all. By expanding tax credits and other programs for low- and middle-wage workers, boosting public employment, and offering incentives for employers to create new jobs, The People’s Budget aims to boost economic opportunity for all segments of the population, including those left out of the current recovery.
• Strengthen the social safety net. The People’s Budget expands and extends emergency unemployment benefits and increases funding for education, training, employment, and social services as well as income security programs and proposes benefit enhancements, not cuts, in social insurance protections.

The blueprint is a “comprehensive road map for economic reform,” wrote Isaiah J. Poole at the Campaign for America’s Future blog on Monday. “[It] also serves as a standard for what a presidential or congressional candidate should be willing to embrace in order to earn progressive support.”