The Congressional Budget Office (CBO) released its latest budget projections today, which show that the U.S. has made substantial progress towards getting its deficit and debt under control. However, the flip side of that reality is that CBO projects economic growth will be sluggish for the next several years, meaning that unemployment will only come down slowly. Here are the four biggest takeaways from the report:

1. The deficit has been reduced by a lot. As Center for American Progress Director of Tax and Budget Policy Michael Linden noted, in August 2010, CBO’s “alternative fiscal scenario” projected a deficit in 2020 of 7.8 percent of GDP. Now it projects that deficit will be 4.7 percent of GDP. The difference between the projected 2013-2020 deficit in 2010 and that same projection today adds up to $4.5 trillion in deficit reduction.

2. The debt is stabilized. Thanks to the fiscal cliff deal and previous budget agreements, most of the country’s debt problem is solved. The CBO’s report shows debt will now peak at 77.7 percent of GDP in 2014, then drop to 73.1 percent in 2018, then rise back to 76 percent in 2022. (See graph below.) According to the Economic Policy Institute, flattening out that second rise from 2018 to 2022 will only require $670 billion in additional deficit reduction — $580 billion in actual policy savings, plus $90 billion in resulting interest savings. That’s less than half the $1.5 trillion in additional deficit reduction President Obama is calling for.

3. Austerity is killing the recovery. The CBO anticipates that economic growth will be slow this year, which “reflects a combination of ongoing improvement in underlying economic factors and fiscal tightening that has already begun or is scheduled to occur — including the expiration of a 2 percentage-point cut in the Social Security payroll tax, an increase in tax rates on income above certain thresholds, and scheduled automatic reductions in federal spending.” Large austerity efforts in Europe have been stifling economic growth and causing continued economic contractions.

4. Jobs aren’t coming back fast. Due to a pronounced output gap — the gap between what the economy is producing and what it could be producing (shown below) — unemployment will remain elevated for several years. CBO projects that the unemployment rate “falls from 8.0 percent in the fourth quarter of 2013 to 6.8 percent in the fourth quarter of 2015 and then declines gradually to 5.5 percent in the fourth quarter of 2018.”

The report clearly shows that, despite the ongoing deficit hysteria in Washington, the far more pressing problem is growth and jobs.

State and local governments lost $39.8 billion last year because corporations and the wealthy shifted profits to offshore tax havens, an amount roughly equal to what they spent on firefighters in 2008, according to a new report from the U.S. Public Interest Research Group (PIRG). The federal government lost $150 billion in revenue to the same practices.

Corporations shifting profits to tax havens like Bermuda and the Cayman Islands has consequences for both individual taxpayers and America’s small businesses, and it also complicates efforts to reduce the size of the national deficit, a priority of both parties in Washington. The $150 billion lost to offshore tax avoidance at the federal level annually, the report notes, would be more than enough to offset the automatic spending cuts that are set to take place at the beginning of March if Congress does not offset it. Those cuts total $1.2 trillion over the next decade.

“So much of the discussion in the recent fiscal cliff negotiations centered on shared sacrifice,” Rep. Lloyd Doggett (D-TX) said on a conference call announcing the report. “I think that it is important in considering this report and its implications to reflect on that fiscal cliff agreement, because in it, corporations did not contribute a cent to resolving the fiscal cliff.”

The $150 billion lost to tax havens could cover the cost of Pell Grants for 10 million students for the next four years. It is also enough to double federal spending on Head Start and other education programs or pay for every high-speed rail project proposed by state governments in 2009. At the state level, $40 billion lost is enough to boost the number of firefighters back to 2008 levels or to cover the cost of education for 3.7 million children.

“Every dollar hidden abroad means less money for infrastructure, less money for education, less money for the investments that we need to create a strong local business climate for independent small businesses back home,” the Main Street Alliance’s Sam Blair said.

Meanwhile, offshore tax havens make America’s small businesses less competitive with large corporations. A previous PIRG report found that it would cost each small business $2,116 to make up revenue lost to corporate use of offshore tax havens.

Eight states — California, New York, New Jersey, Illinois, Minnesota, Massachusetts, and North Carolina — lost at least $1 billion to offshore tax havens last year. California, a state that has enacted massive budget cuts in recent years, lost $7.1 billion in 2011, while New York and New Jersey each lost more than $4 billion.

The Congressional Progressive Caucus announced today that it is introducing legislation to cancel the automatic spending cuts — known as the “sequester” — that are scheduled to take place at the beginning of March. The CPC’s Balancing Act would replace the scheduled spending cuts with more than $900 billion in new revenues and nearly $300 billion in cuts to the defense budget.

The Balancing Act would result in $960 billion in new revenue, generated from closing tax loopholes for corporations and the wealthy. It ends the carried interest loophole that benefits wealthy hedge fund managers, closes tax loopholes that encourage corporations to send profits to offshore tax havens, ends the $4 billion in annual subsidies to Big Oil companies, and closes loopholes that benefit buyers of private jets and yachts. It also limits deductions for wealthy taxpayers and closes loopholes in the estate tax.

The proposal also cuts $278 billion from defense spending, a dramatic reduction from the $500 billion in cuts the Pentagon would face under the sequester. Added together with previous deficit reduction efforts, the Balancing Act would equalize cuts to defense and domestic spending while also making the overall package of deficit reduction measures equal parts revenue and spending cuts:

The Balancing Act also includes investments into infrastructure and education meant to bolster the economic recovery. It would reinstitute the Making Work Pay tax credit, which would provide up to $800 to low- and middle-income families, for one year at a cost of $61 billion. It would also spend $55 billion on education investments — a measure the CPC says would prevent 280,000 teacher layoffs and modernize 35,000 public schools — and $160 billion in infrastructure investments. The CPC projects that such investments would create roughly 1 million jobs. Even with those investments, the Balancing Act would result in a total of $3.3 trillion in deficit reduction when added to already-enacted cuts and revenues.

43 Republican senators signed a letter last week saying that they would obstruct any nominee to run the Consumer Financial Protection Bureau, regardless of qualifications, unless the CFPB is weakened. Republicans are essentially attempting to nullify a federal law via obstruction; Congress passed and President Obama signed a bill creating a CFPB, but the GOP is ensuring that it can’t function.

By weakening the CFPB, the GOP is doing the bidding of Wall Street’s biggest banks, which would have preferred that a regulator solely focused on consumer protection never come into being. Here are some facts and figures that Public Campaign pulled together on how much cash Wall Street has handed over to the 43 GOP’ers publicly obstructing Obama’s nominee:

– The 43 Senators have received $143 million in industry cash during their time in Washington.

– Sen. John McCain (R-Ariz.), boosted by his 2008 presidential bid, is the top recipient of financial industry cash of those signing the letter, with $36.7 million in donations from the industry. McConnell is second with $7.4 million in donations. Sen. Mike Crapo (R-Idaho), the ranking member of the Senate Banking committee, has received $2.4 million in industry cash. [...]

– The six Senators recently elected, or re-elected, in November who signed the letter — Sen. John Barrasso (R-Wyo.), Ted Cruz (R-Texas), Jeff Flake (R-Ariz.), Orrin Hatch (R-Utah), Dean Heller (R-Nev.), and Roger Wicker (R-Miss.) — received nearly $7 million altogether in industry donations in the 2012 cycle. Hatch tops this list with $2 million raised from the industry for his last election.

Sen. Rob Portman (R-OH), who is one of two Republican senators that did not sign the letter, said last week that Richard Cordray, who was recess-appointed by Obama to be the first CFPB director, simply accede to the GOP’s hostage-taking and call for watering down his own agency.

On Tuesday afternoon, House Majority Leader Eric Cantor (R-VA) delivered a speech that sought to “rebrand” the GOP as a party that can advance legislation that would improve the lives of the “most vulnerable” Americans. “Our solutions will be based on the conservative principles of self reliance, faith in the individual, trust in the family, and accountability in government,” Cantor said in an address titled “Making Life Work.” “Our goal: To ensure every American have a fair shot at earning their success and achieving their dreams.”

But a closer look behind Cantor’s policy proposals reveals that House Republicans are still more interested in sounding compassionate than ensuring economic advancement for middle and lower income voters. Here is why:

1. SCHOOL FUNDING: “Imagine if we were to try and move in this direction with federal funding. Allow the money we currently spend to actually follow individual children. Students, including those without a lot of money or those with special needs, would be able to access the best available school, not just the failing school they are assigned to.” This is a redux of Mitt Romney’s school funding plan, which while a decent idea in theory, wouldn’t be possible alongside the House GOP budget’s call for $2.7 billion in cuts to spending for disadvantaged students. As The Nation’s Dana Goldstein explained, this plan calls for shuffling funding “without guaranteeing the federal funding or regulatory support necessary to ensure quality.”

2. HIGHER EDUCATION: “Over the course of this Congress, we will also work to reform our student aid process to give students a financial incentive to finish their studies sooner. We will encourage entrepreneurship in higher education, including for-profit schools.” The House Republican budget would eliminate Pell Grants for more than one million students. Many for-profit schools, meanwhile, take huge amounts of taxpayer money while leaving students burdened with debt and facing bleak job prospects. Their focus is corporate profitability, not education, and they use aggressive marketing tactics to target vulnerable students.

3. WORKING MOTHERS: “Federal laws dating back to the 1930s make it harder for parents who hold hourly jobs to balance the demands of work and home. An hourly employee cannot convert previous overtime into future comp-time or flex-time…Imagine if we simply chose to give all employees and employers this option. A working mom could work overtime this month and use it as time off next month without having to worry about whether she’ll be able to take home enough money to pay the rent.” Cantor’s proposal would do far less good than simply ensuring that all workers have access to paid sick leave and paid maternity leave. The U.S. is currently the only developed country with no paid sick leave policy and one of just three without required paid maternity leave.

4. TAX REFORM: “Loopholes and gimmicks benefitting those who’ve come to know how to work the system in Washington, are no more defensible than the path of wasteful and irresponsible spending we’ve been on for decades. Working families should come first. Everyone agrees a fairer, simpler tax code would give us all more time.” Republicans pay lots of lip service to tax reform, but want to raise no new revenues through the closing of loopholes and deductions, despite the fact that the deficit reduction implemented since 2011 has come overwhelmingly via spending cuts.

Read more

The 5.5 billion hours Americans sat in traffic in 2011 cost the country a whopping $121 billion, according to an Urban Mobility Report from Texas A&M. Not surprisingly, the most congested cities are also some of the most populated, including Washington, Los Angeles, San Francisco-Oakland, New York-Newark, Boston, Houston, Atlanta, Chicago, Philadelphia and Seattle:

Consumers bear much of the cost in time and gas, with the wasted fuel totaling 2.9 billion gallons — enough to fill the New Orleans Superdome four times over. The total costs are up $1 billion from the year before, which translates to $818 per U.S. commuter. Commuters must shoulder the cost of time wasted, too, since many need to allot a full hour for a trip that should take 20 minutes.

There are massive pollution costs to this much traffic as well: Traffic congestion adds 56 billion pounds of carbon dioxide emissions to the atmosphere, or 380 pounds per commuter.

The obvious fix is more funding for infrastructure, and the researchers recommend prioritizing public transit. In the most congested cities, an increasing number of Americans rely on public transit. However, Republicans have repeatedly sought to cut mass transit funding, while public investment has plunged since the recession. The nation’s growing infrastructure deficit currently stands at $1.6 trillion.

The European economy is still struggling to recover from the Great Recession as its leaders have chosen to focus on deficits and debt instead of unemployment and growth. But at a speech in Miami, JP Morgan Chase CEO Jamie Dimon seemingly ignored the struggling European economies and praised leaders there for having a “will” to cut deficits that the United States doesn’t yet have:

DIMON: What I’ll say about Europe is they have the will. Listen to their politicians. Their politicians say, “There is no Plan B. The Euro will not be dissolved.” The way is very complicated and will take many years. The United States is the opposite. We know exactly the way. It’s something called like a Simpson-Bowles, we’ve seen a lot of different plans come out. We don’t yet have the will. The United States is a far simpler problem.

The “will” European leaders have is one that has wreaked havoc on the continent’s economy. The mad dash to cut deficits and debts has pushed country after country into recession, and the Eurozone itself slipped back into a recession in November. Eurozone unemployment reached a record-high of 11.8 percent in January, and 18.8 million Europeans remain unemployed. In Spain, unemployment rose above 26 percent at the end of 2012, and 56 percent of young workers are unemployed. Britain is on the brink of a triple-dip recession, and its lack of growth has thwarted its deficit-reduction efforts. Greece’s unemployment rate is 26.8 percent. Even Germany, the stalwart European economy, is experiencing a slowdown.

The United States, meanwhile, took a different approach, choosing to spend nearly a trillion dollars to stimulate the economy. As a result, America has outpaced Europe since the Great Recession. Still, unemployment remains unbearably high and growth slower than it should be, and efforts to reduce the debt and deficits are only complicating the recovery.

Twenty years ago today, President Bill Clinton signed his first law: the Family and Medical Leave Act of 1993. The law, still the only one that is explicitly aimed at helping workers manage their work-life balance, provides unpaid leave for workers to recover from a serious illness or care for a new child without worrying about losing their job.

The law was a huge step forward at the time, and has been used 100 million times since its enactment. However, the law does not go far enough. Here are some of the reasons it needs to be updated:

1. It doesn’t cover 40 percent of workers. Due to FMLA restrictions, 2 in 5 workers are not eligible for its protections. Small businesses are exempt from the law, and employees need to have worked “a minimum of 1,250 hours in the 12 months before their leave is to begin” for FMLA to apply. According to the Department of Labor, more than 6 percent of workers “had an unmet need for leave in the past 18 months.”

2. It doesn’t cover care for a grandparent, same-sex partner, or many others. Workers are not eligible to use FMLA leave to care for “parents-in-law, grandparents, grandchildren, siblings, domestic partners, or same-sex spouses,” ignoring the reality of today’s families.

3. Many workers can’t afford to use unpaid leave. Nearly half of workers who don’t access leave for which they are eligible say they do so because of the cost. The U.S. has no national policy regarding paid sick leave, which would give workers the opportunity to take time off while sick without worrying about losing their pay along with it.

4. The U.S. isn’t keeping up with the rest of the world. The U.S. is the only developed country that fails to provide some form of paid sick leave and is one of only three countries on Earth that doesn’t require paid maternity leave. As Bryce Covert noted at The Nation, “single parents in this country are the worst off compared to 16 other high-income countries, despite the fact that we have the highest rates of single parenthood.”

As Sarah Jane Glynn noted in the Atlantic, “36 percent of American workers over the age of 18 do not have access to any form of paid leave at all — not paid sick leave, not paid parental leave, not paid vacation.” FMLA was certainly a move in the right direction, but there’s still significant room to make policy that helps workers today.