Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Benjamin Armbruster, Ali Frick, Ryan Powers, and Pat Garofalo
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In September, after Sen. John McCain (R-AZ) famously suspended his presidential campaign to focus on the financial crisis, then-candidate Barack Obama said, "I think that it is going to be part of the President's job to deal with more than one thing at once." Now that President Obama has laid out an ambitious agenda aimed at economic recovery and reforming the nation's health care, energy, and education systems, conservatives are claiming that he is doing too many things at once and should put aside his other plans in order to "fix the economy first." Rep. Eric Cantor (R-VA) said that Obama "should be focusing on the 'economic crisis,' as opposed to holding four-hour meetings on health care." Meanwhile, Sen. Mitch McConnell (R-KY) said that Americans "want the administration to fix the economy first. That's the first priority." The media has piled on, with cable outlets lending "credence to the accusation that the president has loaded his agenda with unrelated items when he should be focusing on the economy." But as Obama said yesterday while addressing the Business Roundtable, "we must not use the need to confront [financial problems] as an excuse to keep ignoring the long-term threats to our prosperity: the cost of our healthcare and our oil addiction; our education deficit, and our fiscal deficit." Indeed, it is only by addressing all of these areas that the economy can be set on the path toward long-term sustainability.
PRODUCTIVE AND HEALTHY WORKERS: First, the notion that Obama is not focusing on the economy is simply untrue. In the first two months of his presidency, Obama has signed a $787 billion economic stimulus package, proposed a fix for the housing crisis, and laid the groundwork for rescuing the banking system and restoring lending. That said, as Office of Management and Budget Director Peter Orszag pointed out, "the single most important thing we can do to improve the long-term fiscal health of our nation is slow the growth rate in health care costs." Health care spending makes up one out of every six dollars in the economy, and $700 billion per year is wasted on unnecessary or ineffective care. Furthermore, "as the unemployment rate grew by 0.8 points in December and January, nearly 100,000 people a week or 14,000 people a day lost their health coverage," while the percentage of people who reported having trouble paying for needed health care or medicines rose from 18 percent in January 2008 to 21 percent in December. Even the Business Roundtable pointed out that "Americans in 2006 spent $1,928 per capita on health care, at least two-and-a-half times more per person than any other advanced country." As National Institutes of Health bioethicist Ezekiel Emanuel said, "everything is affected by health policy, and every decision should be examined for its impact on health care reform." Both America's short- and long-term fiscal state depend on getting the outlandish costs of health care under control.
GREEN JOBS: As former President Bill Clinton said this week, "it's difficult to see how America can be a preeminent country in the 21st century...without becoming more energy independent through clean energy and greater efficiency." Nevertheless, Cantor has criticized Obama for trying to "impose these cap-and-trade schemes." CNN's Wolf Blitzer asked if cap-and-trade is "wise at a time of economic distress." But Obama's plan -- which does not begin until 2012 -- drives investment in a clean economy and and fuels improvements that will save everyone money. As McKinsey and Company has found, putting a cap on carbon emissions corrects market failures by encouraging investment in efficiency and fuel economy improvements. It also spurs the expansion of renewable energy, creating new green jobs and a competitive advantage in the international marketplace and leading to technologies that America can export. Furthermore, the Center for Budget and Policy Priorities (CBPP) has found that a properly designed cap-and-trade system actually insulates working Americans from both energy price volatility and costs passed on to them from industrial polluters. In fact, CBPP estimated that "less than 60 percent of the auction revenues [from a cap-and-trade system] would be sufficient to provide relief to a substantial majority of U.S. consumers." Obama has gone above that mark, proposing to use 80 percent of the revenues to fund his 'Making Work Pay' tax credit.
AN EDUCATED WORKFORCE: As Obama said when laying out his education agenda on Tuesday, "America's place as a global economic leader will be put at risk...if we don't do a far better job than we've been doing of educating our sons and daughters." Indeed, investing in education is critical for long-term economic growth, while in the short-term, education funding can provide key economic stimulus. Ensuring that teachers keep working, universities don't layoff staff, and students can continue to pay tuition keeps dollars cycling through the economy. Plus, as former Secretary of Labor Robert Reich wrote, "America's future competitiveness and the standard of living of our people depend largely on our peoples' skills, and our capacities to communicate and solve problems and innovate." Projections on the real fiscal rate of return on public educational investments are high: 10 percent for high quality preschool programs, 15 percent for innovative K-12 reforms, and 10.3 percent for investments to encourage college access and graduation. And of course, "one of the best documented relationships in economics is the link between education and income." A lower education level means that "income is lower, which means lower tax contributions to finance public services." As The Wonk Room's Ben Furnas has pointed out, "better educated people are more productive, get sick less often, are less likely to require public assistance, commit fewer crimes, make more money, and pay more in taxes. Creating more of them is a good idea."