Press Release
☷On the Record Press Call with OMB Director Shalanda Young and Council of Economic Advisers Chair Jared Bernstein on the President s Budget
White House ( By Press Release office)
Mar 14,2024
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Hey everyone , thanks for hopping on this call about the President ' s budget for 2025 . We ' ve got OMB Director Shalanda Young and Chair of the Council of Economic Advisers Jared Bernstein here to chat with us . They ' ll give a quick rundown before we open it up for questions . Just a heads up , everything we discuss here is embargoed until noon today . Director Young , take it away!CHAIR BERNSTEIN: Well , thank you . Good morning and thanks for joining us . As geeky as it may sound , we always find budget release day to be exciting and fulfilling . Firstly , this document is the result of the hard work of many smart and dedicated individuals from the EOP and various agencies . They have put in a lot of hours to create this . Secondly , it is a detailed statement of our administration ' s values , providing a thorough explanation of the government ' s roles and responsibilities . And finally , as the CEA , our main concern is implementing the President ' s vision within the current economic situation . I will briefly discuss this context and touch on a few points from the administration ' s new economic forecast that was released today . In his State of the Union Address , the President highlighted some impressive aspects of the current economic expansion , reminding us of the progress made since he took office . The American Rescue Plan played a crucial role in this , providing vaccinations , financial support , and preventing evictions and business losses . It also significantly reduced child poverty and helped bring the job market back to full employment . Importantly , the job market has stayed strong , even amidst significant disinflation . Many economists doubted this could be achieved without sacrificing unemployment and growth , but President Biden believed otherwise . Inflation has decreased significantly and is expected to continue this trend . Our economic forecast in the budget , which was finalized in November 2023 , was a collaborative effort between the Council of Economic Advisers , Office of Management and Budget , and the Treasury . We are grateful to the experts who contributed to this forecast . Although our predictions may not be as up - to - date as market forecasts , we are optimistic about transitioning to steady and stable growth . On an annual basis , we expect real GDP to grow by 2% . Last year , the growth was even stronger than we expected , with a 6 percent increase compared to the projected 3 . 1 percent . This above - average growth is contributing to job creation and income gains . Inflation turned out better than expected as well , with the actual rate at 3 . 2 percent instead of the projected 3 . 4 percent . The unemployment and interest rates for 2023 were very close to our estimates , and our forecasts for 2024 align well with the consensus . In the long term , our forecast remains largely unchanged with growth and unemployment rates of 2 . 2 and 3 . 8 percent respectively . We include pro - growth effects of our policies , such as investments in human and physical capital and affordable childcare , which can significantly increase labor supply . Now , let ' s move on to your questions . We ' ve been asking for support for Ukraine since September , and then for Israel after October 7th , as well as for border security . The President has requested additional border security funding multiple times , with little success . This budget includes the President ' s supplemental ask for Congress . We had hoped Congress would have acted by now , but since they haven ' t , we needed to ask again . As for the unemployment rate projections , we believe 3 . 8 percent is a reasonable rate for full employment that aligns with stable growth and prices . This rate has been consistent with the current economic dynamics . Ultimately , our growth forecast and math are based on reality and are trustworthy . So basically , we ' re just explaining how we got to where we are and it might be a good idea to talk to some outside economists to get their perspective . We haven ' t had sustained growth of 3 percent in a while , which is usually seen in developing countries . Our economy is more advanced , with a typical growth rate of around 2 percent . Congressional Republicans don ' t provide details on what they plan to cut , but the President ' s budget is transparent about funding programs like childcare and education . The President values the American people and details how he plans to support them , while Congressional Republicans focus on high - level talking points without addressing who will be impacted by their cuts . Yeah , so if you look back at our midsession review , which is our most recent previous forecast , the 10 - year Treasury note terminal rate in the last budget year was 3 . 4 percent , and in this forecast , it ' s projected to be 3 . 7 percent by 2029 . That ' s a 30 - basis - point increase in the rate . This isn ' t based on any Federal Reserve decisions , as we don ' t comment on their policies . Our forecast aligns with blue - chip market forecasts and consensus forecasts . As for tax policy , half of the increase would come from raising rates for corporations and the top 1 and 2 percent of earners . This is consistent with last year ' s budget and the President ' s goals for funding investments . On Medicare , we ' re expanding the number of drugs eligible for negotiation and our solvency proposals remain the same as last year , but we ' re projecting their impacts over 75 years instead of 25 years . Well , I ' m not really thanking you for being at Axios , but I do appreciate it . That wasn ' t what I was trying to ask though . Can we just get a total number for tax increases so we don ' t make any mistakes? And sorry to the real budget reporters out there , but I have another technical question . Is the total number for 2025 $7 . 266 trillion , and is the deficit in the first year $1 . 781 trillion? I ' m looking at F4 . Thanks . Can you repeat the second question? I just want to know the total outlays , should I be looking at F4? So , is the President proposing a $7 . 3 trillion budget for next year , with deficits close to $1 . 8 trillion in the first year? I ' m just looking at F4 . Yeah , F4 is the correct table to look at for outlays in the budget . The Greenbook from Treasury will have more details on our tax scores . Alright , next caller . I have a few quick questions . The lowest I see is $1 . 5 trillion . In the past , $1 trillion has been seen as a tripwire for worrying about the deficit . How do you respond to that? Also , the House Budget Committee resolution has a $3 trillion feedback effect to reduce their 10 - year deficit . What is your equivalent? And finally , former President Trump talked about tariffs against China and cutting entitlements . Any reactions to that? There ' s a lot there and I ' m not sure I got it all . I don ' t remember mentioning any "feedback effect" . As for cutting entitlements , the President is opposed to any cuts in Social Security and Medicare . When it comes to deficits , especially in the out years , it ' s important to consider the deficit as a share of the economy . The GDP has been growing significantly over the years , leading to a decrease in the deficit as a percentage of GDP . We are also well below the 2 percent mark for real net interest as a share of GDP , which is seen as a sustainable level of debt . Despite potential higher interest rates in the future , our debt servicing relative to the economy remains within historical norms , indicating fiscal responsibility . As for global health funding and the fight against fentanyl , specific details will be provided in departmental justifications , but the President ' s budget maintains investments in these areas while adhering to fiscal responsibility . I want to thank the Senate for their work , but we are still working on finding a way to fund border security as the President has requested . One important aspect of this is implementing NII equipment to detect fentanyl in vehicles crossing land ports of entry . It ' s frustrating that Congress hasn ' t taken up the President ' s request to increase these machines . Regarding Social Security , the budget outlines the President ' s principles , including no benefit cuts , asking high - income individuals to pay their fair share , and improving financial security for seniors and people with disabilities . It also calls for increased funding for the Social Security Administration . As for the child tax credit and other extensions , they are detailed in the budget and extended until 2025 . Hey , earlier we talked about the 2017 tax changes and how they will impact the upcoming tax debate at the end of 2025 . The President has made it clear that he won ' t raise taxes on families making under $400 , 000 , but he wants to ensure that tax cuts for the wealthiest individuals are not extended . The Child Tax Credit will also be part of this debate , even though we want to see it extended indefinitely . Overall , our policies aim to boost long - term growth and improve wages by investing in areas like affordable childcare and domestic production of key technologies . This will not only benefit the economy but also help mitigate inflationary pressures . They not only help the economy grow , as our numbers show , but they also help keep inflation low . MODERATOR: Thanks everyone for joining . Just a reminder that this call was on the record and embargoed until noon , as well as the materials we provided . If you have any more questions , feel free to reach out to our team . Thanks . 10:41 A . M . EDT .
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