U.S. Treasury Secretary Jack Lew said during a recent conference at The City Club of Cleveland that while the nation still faces economic and cybersecurity risks, the top priorities should be economic growth and job creation.
“It is important to note that this recovery is being led by the private sector,” Lew said in prepared remarks. “Our businesses and entrepreneurs are doing what they do best. They are expanding, innovating and hiring. And because of their determination, our economy is poised to shift into a higher gear. But there are dangers ahead—and one of the most significant speed bumps for growth is coming straight from Washington, where some political leaders continue to generate one manufactured crisis after the next. These stand-offs and short-sighted maneuvers are a drag on our economy. And they undermine confidence, which is a key driver of economic activity.”
Lew pointed to the recent sequestration, saying the resulting cuts “will hamper growth and hinder job creation.” Lew urged Congress to enact deficit-reduction measures put forth in President Obama’s budget that would replace sequestration.
“What is particularly important about our approach to deficit reduction is that it would strengthen our recovery and lay a foundation for long-term economic growth,” Lew said. “But as important as the deficit is, it cannot be our guiding star. Deficit reduction alone is not an economic policy. We have to apply the same sense of urgency to expanding our economy and getting people back to work.”
Lew said long-term unemployment among skilled workers could result in lower economic productivity, adding that high joblessness rates among young people “could lead to an economy that underperforms, where growth and job creation are below their potential.”
“But we do not have to settle for weaker growth and fewer jobs,” Lew said. “We do not have to set our sights lower or sit back and watch our global competitiveness wither and our middle class grow smaller. Not when both parties in Washington can come together to secure a better economic future.”
Lew highlighted several areas where the government plans to make investments to strengthen the middle class, adding that the improvements will not contribute to the deficit.
The government hopes to create a “fix-it-first” program in which the nation’s crumbling infrastructure will be repaired, employing contractors and construction workers. The program would be funded by private capital to avoid adding to the deficit.
Lew also said expansion of the nation’s manufacturing sector was crucial to economic growth. He said the tax code should be reformed to eliminate tax breaks for outsourcing companies in order to strengthen the manufacturing sector and that a tax credit that encourages businesses to invest in research and technology should be made permanent.
Additionally, Lew stressed the importance of worker training in creating jobs, advocating for high school incentives that would create classes that focus heavily on high-tech areas such as science, engineering and math.
“In recent times, we have been tested by recession and drought, terrorism and financial turmoil,” Lew said. “Yet time and again, we have not just survived, we have prospered. And we will continue to prosper because we will continue to confront the challenges that come at us. ”