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All right President Obama.
Unveils his budget plan -- it -- a fiscally responsible blueprint for middle class jobs and growth so the big question that you all should be asking is it enough to stimulate the sluggish US economy joining us now Alan -- white house council of economic advisors chair.
So we're happy we get to ask you Allan thank you for joining us so what -- get right to it we had.
Gene Sperling a -- -- -- -- from the administration in the last hour talking about some of the basics of it so I wanna go into a little more detail.
The question about whether it will stimulate jobs goes to the heart of some of the projects the infrastructures for projects in the spending -- it.
Which one do you anticipate is really going to be the most immediate when it comes to job creation.
Well the president's budget has a big boost for infrastructure investment I was with the present in a week ago.
In Miami at the port of Miami and I could see the work that was being done when -- From from the Recovery Act those are the kinds of projects we need to keep the US on the cutting edge to keep us as.
The most competitive economy in the world and to create more jobs right now.
Alan I wanted to ask you how much this budget is based on small some would say some Rosie.
Our economic assumptions if you like growth -- this here originally was.
Estimated GDP growth of some 3% I think it's perhaps looking Arizona -- -- of the 2%.
So -- what is the gap between that reality of what is being full cost.
Budget relies on conventional economic forecasts if you look at GDP growth over the full eleven year period.
The average is two point 8% a year at Congressional Budget Office estimates two point 7% a year likewise -- you literally get inflation.
So I think budget is using a quite modest assumptions.
There's some upside potential if we.
I can pass a budget like the one the president propose I think they'll bring -- more confidence will even.
I help the economies do you even better.
So you said that you -- a week or so ago talking with the president as you hammer this thing out figured out.
Where to cut now the cut word is really important for the people on the other side the Republicans the Tea Party perhaps who would really demand a lot of cuts and some of them as we look at them.
400 billion in Medicare cuts 200 billion in cuts to farm subsidies.
Hundred billion cuts in defense in addition hundred billion domestic programs.
Now you've got some people on your side a little upset about the Medicare -- so how do you -- that and say.
People we've got to cut somewhere it's got to come from a lot of different places.
You know governing means making hard choices and that's what the president does in this budget.
I think it's a very bold budget that the president has proposed.
He didn't run.
Back to the corner of the way others did in the negotiations.
Over the fiscal cliff the president kept his last offer on the table.
There are aspects of that and I think he would have preferred to do otherwise but in the spirit of cooperation in the spirit of trying to reach an agreement the president made those hard choices.
Well one of the choices some would say is not hard -- at least for the president his taxes on the wealthy and the Republicans might argue that the wealthy are already especially after the negotiations regarding the fiscal cliff are already shouldering a lot more.
Then they have in the past so the question becomes at some point.
When do you kind of back off on that and and at least compromise on that is that a point of compromise.
The president already has compromise.
On that issue his -- original request.
I in the negotiations over the fiscal cliff was for -- -- point eight trillion dollars in additional revenue.
What he's asking for now is 580.
Billion dollars -- primarily by closing loopholes in the tax code.
In the negotiations with speaker Boehner the speaker said.
That over a trillion dollars in tax expenditures can be cut cut as a way of reaching a grand bargain so I think the president has achieved the balance proposal.
I think most Americans would support it closes tax loopholes -- Reduces the kinds of tax expenditures and only that wealthy and well connected take advantage up and at the same time and make some of those typical spending cuts the president has refused to address our fiscal issues on the backs of the middle class and seniors.
I wanted to mention that chain does CPI and -- basically to measure inflation which ultimately slows down the growth of federal benefits is getting a lot of criticism from those on the left of the political mile.
What do you.
What do you also to them when Social Security payments could indeed.
Be reduced by considerable amount given but what happens the economy.
Well this is one of those hard choices.
That are in the budget.
President in his negotiations.
With the speaker and senator McConnell this is something that they had called for.
And it's a technical change in the way the Consumer Price Index is calculated addresses issues of substitution -- -- and finite sample bias but I think it's also important to bear in mind that the president has insisted in reserving some funds to protect the most vulnerable the oldest of the old.
As well as those -- are just struggling to get by.
Allan thank you will be watching this and by the way Gene Sperling in the last hour -- year.
Your colleague there had said that the president would compromise is ready to compromise on certain things will you agree with that.
Oh absolutely but the one thing the president won't compromise on his balance he insists that that we have a balanced plan to address our problems.
How I -- -- white house council of economic advisors -- thank you so much for joining us.
Thank you all right.
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