Today, the Obama administration released its proposed federal budget for 2013. The Republicans’ reaction has been swift and united in its thematics, claiming the budget fails to promote fiscal responsibility or future prosperity, accusing Obama of “duck[ing] the responsibility to tackle this country’s fiscal problems” and choosing to “campaign instead of govern,” and generally slamming the budget as a “threat to job growth” and “more of the same failed ‘stimulus’-style policies.” All of this suggests the Republicans are unaware that America is not, in fact, the only market-based western democracy attempting to work its way out of a massive economic slump — or that these efforts provide concrete lessons in what will and will not produce economic growth.

In Britain, a large package of budget cuts and austerity measures which rolled out in 2010 has not unleashed the proverbial job creators in the private market. Instead, the country is still shackled with an economic growth trend that’s even worse that what it suffered in the aftermath of the Great Depression.

In the Eurozone as a whole, the European Central Bank and other relevant authorities have so far insisted on massive austerity measures from struggling countries in exchange for fiscal aid. Here, too, the result has not been a revitalized economy but a continuance of dismal growth rates.

Here at home, the effect of 2009′s recovery package and the tax deal in December 2010 was more than offset by cuts in state budgets. By the end of 2009, the combined budgets of the federal and state governments had entered a period of fiscal contraction from which they have yet to emerge.

The portions of Obama’s economic policy which actually passed simply made the economic hole created by state-level cuts less deep. Which was a valuable and necessary function, but insufficient to actually boost the economy back to healthy growth. Contrary to Republicans’ claim that Obama’s first two years were a period of unbound Keynesian experimentation, austerity is the budgetary policy reality which has accompanied America’s stagnant economic growth.

This matters because, now that the wars in Afghanistan and Iraq are winding down, the Bush tax cuts and the lingering effects of the recession remain the two primary drivers of the U.S. federal deficit. While the Republicans insist on not only maintaining all the tax cuts, but blowing an even larger hole in our revenue with added tax relief for the wealthy, Obama has proposed raising new revenue by allowing the Bush cuts for the top income rates to expire and by eliminating other injustices in the code which go to the benefit of the wealthiest Americans.

Even more importantly, because our tax system pulls in a percentage of the country’s overall wealth production, tax revenues will continue to underperform as long as our GDP production remains below capacity. The perverse irony of austerity as an immediate response to economic recession is that it drives down demand and GDP, thus driving down revenues and deepening the deficit hole it seeks to mend. In the opposite direction, a sudden positive jump in GDP could bring our economy back into line with its pre-recession trend and bring tax revenues back up without any change in tax rates or policy at all. The policy history in Britain, Europe, and here in America since the end of 2008 shows the Republicans’ austerity fixation won’t deliver this reinvigoration. But a recommitment by the government to boost demand could do the trick.

Obama’s budget, while imperfect, aims for the proper balance and the proper order of repairs: Investment now in jobs, infrastructure, state aid, extensions for the payroll tax cut and unemployment insurance, and other immediate boosts to demand, followed by longer-term deficit cutting once the economy is again firing on all cylinders. If the GOP had not been using every political tool at their disposal to undermine this approach during the last four years, the president could probably have done considerably more.

Georgia’s controversial plan to mandate drug testing for all welfare recipients and other beneficiaries of government assistance got a big endorsement on Friday from Republican presidential contender Mitt Romney.

On a local NBC affiliate in Georgia, Romney said that he supported the measure:

Jeff Hullinger: [Lawmakers] have bantered about the proposition that welfare recipients should be drug tested. How do you feel about that?

Mitt Romney: Well my own view is, it’s a great idea. People who are receiving welfare benefits, government benefits, we should make sure they’re not using those benefits to pay for drugs. I think it’s an excellent idea.

Watch it:

Romney’s support for blindly drug-testing welfare recipients dates back at least two decades, to his failed 1994 campaign for the US Senate. Civil rights advocates, meanwhile, have been quick to challenge the constitutionality of drug testing bills that were passed last year, and courts blocked similar bills from being implemented in Florida and Michigan.

Rather than saving states money or ensuring taxpayer dollars aren’t used to purchase drugs, mandatory testing laws have succeeded only in proving that welfare recipients are actually less likely to use drugs than the public at large, and implementing laws requiring drug testing is costing states like Florida money they don’t have.

The ACLU of Florida has estimated that the state saved just over $40,000 between July and October by denying residents welfare support based on their failure to pass a drug test, while it spent more than $245,000 in reimbursements for the cost of the exam in the same time period.

Our guest blogger is Sarah Glynn, a policy analyst at the Center for American Progress.

President Obama submitted his budget for fiscal year 2013 to Congress this morning, with the explicit goal of “rebuild(ing) our economy and strengthen(ing) the middle class.” The $3.8 trillion budget includes $5 million to help individual states launch paid leave programs – similar to those in California and New Jersey – that allow workers to take paid time off from work to provide care to a new child or ailing family member.

While some have argued that government intervention into work-family policies will only increase the cost of employing women, and that the marketplace will respond by voluntarily providing policies in order to retain valuable employees, the evidence does not support these arguments. At present, there are huge gaps in access to maternity leave for working women. According to the U.S. Census Bureau, between 2006 and 2008 about two-thirds of mothers with a bachelor’s degree or higher received paid maternity leave, but only 18.5 percent of those with less than a high school degree did. New mothers who have access to paid maternity leave are more likely to return to their previous employer, and 97.6 percent of those who return to the same employer do so at their previous pay level or higher. When women have to change employers after giving birth, often times because they are forced to quit or are fired in the absence of paid maternity leave, more than 30 percent experience a drop in pay.

New research on California’s Family Disability Insurance program illustrates how offering paid leave to women after childbirth helps individual workers and the economy as a whole. California’s program was passed in 2002, and became available to workers in July of 2004. Paid leave is administered through the State Disability Insurance program, and is funded through payroll taxes on employees. Eligible workers in California who take leave receive 55 percent of their regular pay, up to a maximum of $928 per week, for up to 6 weeks to bond with a new child or to care for a seriously ill family member.

California’s program has increased both job retention and the number of hours worked by employed mothers. More than 95 percent of workers who took leave in 2009 and 2010 returned to work; 80 percent returned to the same employer. Workers who made $20 an hour, meanwhile, returned to the same employer 83 percent of the time. And according to researchers from the University of Virginia and Columbia University, paid leave increased hours worked by mothers six to nine percent.

Working mothers are often the ones keeping their families afloat. The typical working wife now brings home 42.2 percent of her family’s earnings, and while married families with a male breadwinner and a female homemaker haven’t seen incomes rise since the 1970s (when adjusted for inflation), families with a working wife have seen incomes grow by 30 percent. Families where wives work, work longer hours, and receive higher pay are thus more likely to maintain their position on the income ladder or move up.

If every woman in America had access to paid leave when she had a baby, estimates are that this would increase employment by approximately 40,000 new mothers each year. Imagine how many families that would help raise up into the middle class, or secure their foothold there. If we are serious about repairing the economy, we must remember that a rebuilding a strong middle class is not just about helping the unemployed find work, but also about helping workers keep the jobs they already have. Paid family leave is one policy that can help us meet those goals.

President Obama unveiled his budget for fiscal year 2013 this morning in Virginia, touting it as a budget that took a balanced approach toward investing in American economic growth now while reducing the nation’s deficit over the long-term. The budget is a step in the right direction, using both tax increases and spending cuts to cut the deficit and investing in infrastructure and other job creation measures to continue the economic recovery.

Like any budget, Obama’s is complicated, containing investments and cuts to various programs. With that in mind, ThinkProgress compiled 10 facts about the Obama budget based on the White House fact sheet and other reports:

1. The budget includes $350 billion in short-term measures to encourage job growth, including $50 billion in immediate infrastructure investment, $30 billion to rebuild schools, and year-long extensions of the payroll tax holiday and unemployment insurance.

2. The implementation of the Buffett Rule and the repeal of the Bush tax cuts for the wealthy helps reduce the deficit by $1.5 trillion over the next 10 years.

3. For every $1 in new revenue from those making more than $250,000 per year and from closing corporate loopholes, the budget has $2.50 in spending cuts including the deficit reduction enacted over the last year.

4. The total budget reduces the deficit by $4 trillion over the next decade.

5. Obama preserves the maximum Pell Grant award, a key difference from the GOP budget, and makes permanent then Americans Opportunity Tax Credit, which helps 9 million families afford the costs of college.

6. Unlike the last two GOP budgets, Obama’s budget protects Medicare and Medicaid from structural changes, and through small tweaks, saves $360 billion from those programs.

7. States will receive $30 billion in aid to prevent further layoffs of firefighters, teachers, and police officers, some of the hardest-hit workforces in the nation.

8. The budget eliminates 12 tax breaks to oil, gas, and coal companies, saving $41 billion over 10 years.

9. Obama preserves planned cuts to the Defense Department negotiated in the debt limit deal last August.

10. The budget maintains goals of putting one million electric vehicles on the road by 2015; doubling share of electricity from clean energy sources by 2035; and reducing buildings’ energy use by 20 percent by 2020.

As the Center for American Progress’ Michael Linden notes, Obama’s budget is far from perfect. It’s spending caps are too low, it’s defense cuts are too small, and it contains less new revenue than bipartisan plans like Simpson-Bowles and Rivlin-Domenici. But it prioritizes job creation and economic development and keeps America on the path to recovery, something Republican plans, unfortunately, fail to do.

President Obama’s most recent budget, released today, featured the “Buffett Rule,” named after and supported by billionaire investor Warren Buffett, which would require millionaires to pay a minimum 30 percent tax rate . Republicans have repeatedly denounced attempts to raise taxes on the wealthy as “class warfare,” neglecting to mention that their policies would actually raise taxes on the middle class.

In an interview with CNN’s Fareed Zakaria, the billionaire investor George Soros said that he thought he should be paying more in taxes and took aim at Republicans who are trying to stop the “Buffett Rule” from becoming law:

ZAKARIA: What about taxes? Do you support President Obama’s proposal to increase taxes on the wealthy?

SOROS: Yes, I very much do so, because it’s the big boom, the super-bubble that resulted in a great increase in inequality. Not only do we have the after effect where we have slow growth one way or the other, but if you have better distribution of income, the average American will be better off.

Soros would be “one of the biggest losers” from Obama’s plan, he said, but he’s “willing to pay that” for the good of the country. Over the last twelve years, tax rates for the wealthiest 400 Americans were cut nearly in half, even as that group’s income quadrupled. In 2007, 150 of the 400 wealthiest Americans paid an effective tax rate between zero and 15 percent.

Polls have shown a strong amount of public support for the “Buffett Rule,” despite Republican resistance – although at least one Republican is aware of the inequality that exists in our nation’s tax code.

In a bid to fast-track approval of the Canada-to-Texas Keystone XL tar sands pipeline, Senate Republicans plan to attach an amendment mandating the pipeline’s construction onto a must-pass highway funding bill. The amendment — developed by Sens. John Hoeven, Richard Lugar, and David Vitter — is but the latest congressional push to advance TransCanada’s $7 billion project, which was rejected by President Obama last month.

Finance Committee Chairman Max Baucus has publicly raised objection to the measure, arguing that it will ultimately “kill the bill.” Passage of the highway bill is crucial, as the Highway Trust Fund faces insolvency in 2013, and the bill consists of much needed reforms that will ensure “current resources are used effectively so that Congress can continue investing in the Highway Trust Fund without adding to the federal deficit.”

Before taking the bill to the floor, both sides agreed not to attach controversial amendments:

The Senate’s $109 billion bill is a two-year bipartisan proposal that on Thursday survived a test vote of 85-11 on a measure that limits debate to 30 hours and prevents a filibuster of the bill.

The Senate bill also has the support of the Obama Administration.

In an effort to build bipartisan backing, from the start of their deliberations last year, the bill’s sponsors, Senators Barbara Boxer (D-Calif.) and James Inhofe (R-Okla.), agreed not to include anything controversial in the measure.

The bill contains no new taxes, no changes to rail programs, and does not address truck weights or lengths, although it would mandate electronic onboard recorders for trucks.

The Senate bill is one of two transportation bills moving through Congress, but the House is also working on a version that is riddled with ill-effects for low- and middle-income Americans, making the Senate version the best option under consideration. The Keystone amendment, which would authorize construction on all but the most sensitive Nebraska portion of the pipeline, would jeopardize its passage.

Senate leaders are still trying to decide which amendments will get a vote, but if the Keystone XL pipeline reaches the Senate floor, the measure will require 60 votes for approval. At present, there are 47 Republicans in the Senate, although some Democrats have voiced support for the massive oil pipeline project in the past. Grassroots activists are mobilizing in opposition to the Republican Keystone push.

– Fatima Najiy

Economists estimated in 2011 that the United States needed $2 trillion in immediate investments just to bring its infrastructure up to date, and with borrowing costs low and the nation’s unemployment rate still high, such investments would allow the country to fix its crumbling roads and bridges while also putting unemployed Americans back to work. President Obama is attempting to take advantage of that opportunity by releasing a budget that takes billions of dollars in war savings and pours them into infrastructure investments and job creation programs.

Obama laid out his budget proposal, which includes the Buffett Rule to raise taxes on millionaires and aims to cut the deficit by $4 trillion over the next decade, today in Virginia. The budget includes billions in spending on infrastructure programs, worker training, and higher education investment, all in attempts to create jobs and bolster the nation’s economic recovery:

The president will propose using half of the money from ending Americas’ two foreign wars to subsidize investment in infrastructure as part of his request for over $800 billion in multi-year spending on job creation and transportation.

The Obama budget also includes funds for worker training to prepare American workers for open jobs through community colleges and other avenues and invests in higher education to make Americans “the most skilled workers in the world” in the future, Obama said.

Republicans have already opposed multiple attempts to invest in infrastructure spending and create jobs, as they fought efforts to include further infrastructure measures in the American Recovery and Reinvestment Act, fought a 2010 attempt to pass a large-scale infrastructure bill, and blocked the American Jobs Act last fall, even as the infrastructure in their districts continues to crumble. Multiple Republicans have already announced their opposition to this budget.

Obama’s budget may not be perfect — it cuts spending from areas that need investment and it includes less revenue than bipartisan plans like Simpson-Bowles — but considering the tough budgetary environment, it is a step forward on the road to economic recovery. The GOP, meanwhile, continues to tout budgets that force radical spending cuts, jeopardizing the nation’s economic recovery and putting America on a path that economists say increases the likelihood of yet another painful recession.

With Wall Street profits and bonuses falling and big banks cutting jobs right and left, it seems that the financial services sector would be scaling back its free-spending ways.

But, according to a Center for Responsive Politics analysis, they likely to set records in 2012 on political spending — the bulk of which is aimed at defeating President Barack Obama and electing Republicans opposed to the Dodd-Frank financial regulations enacted to address the sector’s 2008 meltdown.

It seems Wall Street has had its feelings hurt by the Obama administration’s increasingly vocal support for policies that benefit the other 99 percent, and as a result, the financial industry is giving heavily to Republicans and, in particular, former Massachusetts Gov. Mitt Romney (R). Politico reports:

Despite a large overall fundraising advantage, Obama has raised just $5.1 million from the finance, insurance and real estate sectors so far this cycle compared with $12.4 million for Mitt Romney’s campaign, according to Sheila Krumholz, executive director of [the Center for Responsive Politics]. [...]

Securities and investment firms are the top industry donors to the Republican Party so far this cycle, having given $12.4 million. The industry has given $10.3 million to the Democratic Party, second to $12.7 million from lawyers and law firms.

The gap for Romney, a former private-equity executive and founder of Bain Capital, is even larger when his super PAC — Restore our Future — is included. Restore our Future, which can raise unlimited sums from individuals and organizations, had hauled in $30.1 million by the end of last year.

Wall Street has made no secret of its desire for Republican candidate who will return to the unregulated anything-goes policies of the Bush years. The banks spent millions lobbying against passage and implementation of Dodd-Frank and helped Republicans oppose the nomination of a director of the Consumer Financial Protection Bureau. It’s comes as little surprise then that Romney, who announced his opposition to Dodd-Frank early in his campaign, has emerged as Wall Street’s favorite candidate.

Last week, Wisconsin Gov. Scott Walker (R) announced that he would use the funds his state received from a $26 billion mortgage settlement between 49 states and the nation’s largest banks to help balance the state’s budget, even though the settlement money was marked to help homeowners. In all, Walker will use $25.6 million of the $31.6 million Wisconsin’s state government receives to help close a budget shortfall.

Though Walker’s move to push struggling homeowners aside may seem radical, it is now being followed by at least one other state. Missouri Gov. Jay Nixon (D) and Attorney General Chris Koster (D) have pledged to put $40 million of the state’s $196 million share of the settlement into the state’s general fund to boost its higher education budget, Stateline reports:

Koster, a Democrat, told reporters on Thursday that he agrees with the governor’s call for more higher education funding and will transfer the $40 million Nixon has requested into the general fund, citing the “severe budget shortages” the state faces.

Though specific terms of the settlement have not been released, states have been given significant leeway on how to spend the money from it. According to the National Mortgage Settlement website, however, the money is supposed to “help fund consumer protection and state foreclosure protection efforts.” The full $26 billion, though, is already woefully short of what is needed to ameliorate the nation’s housing crisis, and diverting funds from it to other problems will only exacerbate that fact.

And while Nixon and Koster’s plan to boost higher education funding, which faces a 12.5 percent cut in Nixon’s proposed budget, is certainly a noble goal, there are other sources from which the money could come that wouldn’t jeopardize relief from homeowners. As the St. Louis Post-Dispatch pointed out in January, Missouri has a “propensity to hand out tax credits like legislative candy along a parade route.” Ending the credits, many of which go to corporations, could generate more than $500 million in new revenue, more than enough to restore the higher education budget without taking money from programs meant to help struggling homeowners.