Third Way applauds President's "tough but necessary" Budget

Budget Blueprint Balances Growth Investments with "new era of austerity;" Third Way says Congress and White House must tackle entitlements next to "win the future, not cede it."

February 14, 2011

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The President’s budget is tough but necessary medicine needed to restore fiscal health to the nation’s finances. President Obama will not receive a lot of cheers from activists in his own party, but he reached beyond his base and stepped up to the plate for the good of the nation. The timing of these cuts is right given the state of the economy. The stimulative impact of the $200b in new tax and spending from the December deal will easily offset the cuts in outlays in 2011. And it will send a signal to the markets that fiscal responsibility is on the front burner.

We caution that though this budget makes a real dent in spending, it is simply the opening step. The President and both parties in Congress must also tackle runaway entitlement spending that includes Social Security, Medicare, Medicaid, and the financing of federal pensions.

If America is going to remain the most vibrant economy on earth, we not only need to reduce future deficits – we must also trim entitlements to make room for urgent investments in education, infrastructure, and innovation. It is these investments in growth, not Social Security payouts and Medicare subsidies to the Warren Buffets of the world, that will determine whether America wins the future or cedes it.

This is not a joyful budget. It signals a new era of austerity. However, we are pleased that the budget includes some new spending for growth-inducing investments. The President deserves credit for taking on dozens of sacred cows cherished by members of his own party. This is a necessary opening step and we urge member of Congress in both parties to treat it as such.

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