Chairman Camp, Ranking Member Levin and members of the Committee, thank you for the opportunity to testify today on the President's Budget.
Before I begin, let me say a few words about the situation in Ukraine. President Obama has explained in no uncertain terms, that the steps Russia has taken violate Ukraine's sovereignty, Ukraine's territorial integrity, and are a breach of international law. As the President announced this morning, he has signed an Executive Order to authorize sanctions on individuals and entities responsible for activities that undermine the democratic process, threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine, or misappropriate state assets within Ukraine. This E.O. is a flexible tool that will allow us to sanction those who are most directly involved in destabilizing Ukraine, including the military intervention in Crimea, and does not preclude further steps should the situation deteriorate.
These sanctions build upon the previous actions that the United States has taken but, at the same time, as the President has said, we are prepared to work with all parties to de-escalate the situation and we call on Russia to take the necessary actions to resolve this crisis. It is in Russia, the United States, and the world's interest to have a stable and prosperous Ukraine. As the Ukrainian government prepares for elections in May, it is critical that the international community work together to support its efforts to restore economic stability.
I have spoken with the Ukrainian Prime Minister a number of times now, and he has told me that the government is ready to adopt vital economic reforms. We have been working closely with international partners and Congress to develop an assistance package that will help the Ukrainian government implement the reforms needed to restore financial stability and return to economic growth. As part of this international effort, the United States has developed a package of bilateral assistance focused on meeting Ukraine's most pressing needs. This package will include $1 billion in loan guarantees and IMF quota legislation, which would support the IMF's capacity to lend additional resources to Ukraine and help preserve continued U.S. leadership within this important institution at a critical time.
While the United States will not increase our total financial commitment to the IMF by approving the 2010 reforms, it is important to note that for every dollar the United States contributes to the IMF, other countries provide four dollars more.
At a time when the U.S. is at the forefront of international calls in urging the Fund to play a central and active first responder role in Ukraine, it is imperative that we secure passage of IMF legislation now so we can show support for the IMF in this critical moment and preserve our leading influential voice in the institution.
I want to be clear that even as we deal with the unfolding events in Ukraine, we continue to focus on our central objective: expanding opportunity for all Americans.
Over the past five years, we have accomplished a number of important things to make our country stronger and better positioned for the future.
In fact, since 2009, the economy has steadily expanded. Our businesses have added 8 and a half million jobs over the last 47 months. The housing market has improved, and rising housing prices are pulling millions of homeowners from underwater. At the same time, household and business balance sheets continue to heal, exports are growing, and manufacturing is making solid gains.
The truth is, as the President said in his State of the Union, we are more ready to meet the demands of the 21st century than any other country on Earth.
Nevertheless, our economy was thrown against the ropes by the worst recession in our lifetimes, and while we are back on our feet, we are not where we want to be yet.
Everyone here understands that. The question is, what are we going to do about it?
The President's budget lays out a clear path to move us in the right direction. It not only fulfills the President's pledge to make this a year of action, it offers a framework for long-term prosperity and competitiveness.
This budget addresses the critical issues we face as a nation. It recognizes that while corporate profits have been hitting all-time highs, middle class wages have hit a plateau, with long-term unemployment an ongoing challenge. It recognizes that while the stock market has been vibrant, saving for retirement and paying for college is little more than a dream for millions of families. It recognizes that while our national security threats are shifting and we are bringing the war in Afghanistan to a responsible end, soldiers, military families, and veterans struggle to succeed in our economy. And it recognizes that while work is being done to put the final pieces of financial reform in place, reforms like the Volcker Rule have made our financial system stronger and an engine for economic growth once again.
The solutions in this budget flow from a frank assessment of these challenges. They are carefully designed to show the choices we can make to increase opportunity and bolster the middle class. For instance, a cornerstone of these proposals is to expand the Earned Income Tax Credit so it reaches more childless workers. We know this tax credit is one of the most effective tools for fighting poverty, and it is time to adjust it so it does an even better job of rewarding hard work. This tax cut, which would go to more than 13 million Americans, will be fully offset by ending tax loopholes that let high income professionals avoid the income and payroll taxes other workers pay. Another initiative that will make a difference for hard-working men and women is myRA. This retirement security program will be available later this year, and it will allow Americans to start building a nest egg that is simple, safe and can never go down in value.
While this budget puts forward essential pro-growth initiatives, it also calls on Congress to reinforce our growth-enhancing strategies by passing measures like comprehensive immigration reform and trade promotion authority. But even as it does these things, make no mistake: this budget is also serious about building on the success we have made together to restore fiscal responsibility.
The fact of the matter is, the deficit as a share of GDP has fallen by more than half since the President took office, marking the most rapid decline in the deficit since the period of demobilization following the end of World War II.
The deficit is projected to narrow even more this year, and today, we are charting a course that will push the deficit down to below 2 percent of GDP by 2024 and rein in the national debt relative to the size of the economy over 10 years.
Last year, the President put forward his last offer to Speaker Boehner in his budget as part of a balanced compromise. This year's Budget reflects the President's vision of the best path forward. While the President stands by his last offer, he believes that the measures in his budget are the best way to strengthen the economy now.
As this budget demonstrates, the President is firmly committed to making tough choices to tackle our fiscal challenges, and our fair and balanced solutions represent a comprehensive approach to strengthening our nation's financial footing. This approach shrinks the deficit and debt by making detailed, responsible changes to Medicare while eliminating wasteful corporate tax loopholes and subsidies that do not help our economy and scrapping tax breaks for those who do not need them.
Increasing basic fairness in our tax code is not just about improving our nation's fiscal health, though. It is also about generating room so we can make investments that will strengthen the foundation of our economy for years to come. That means helping to create more jobs by repairing our infrastructure, increasing manufacturing, boosting research and technology and fostering domestic energy production. It means training Americans so they can get those jobs by promoting apprenticeships and upgrading worker training programs. It means improving our education system by expanding access to preschool and modernizing high schools. And it means making sure hard work pays off by creating more Promise Zones, increasing college affordability and raising the minimum wage to $10.10 an hour and indexing it to inflation.
In closing, let me point out that this budget represents a powerful jobs, growth, and opportunity plan. It is carefully-designed to make our economy stronger while keeping our fiscal house in order. What is more, it offers Washington a real chance to work together.
As everyone on this Committee knows, for far too long brinksmanship in Washington has been a drag on economic growth. But we have seen a significant amount of bipartisan progress in recent months that has helped improve economic momentum. Some cynics say it is fleeting. Some call it election-year posturing. But I do not agree. I believe this progress is real, I believe we can keep finding common ground to make a difference, and I believe we can continue to get serious things done on behalf of the American people by working together.
Thank you, and I look forward to answering your questions.