Jason Furman, chairman of the White House Council of Economic Advisers, talked Thursday on USA TODAY's Capital Download about the demise of deficit hopes, the future of the economy and how history will judge President Obama's 2009 economic stimulus package. Questions and answers have been edited for length and clarity.
Q: In the 2015 budget, out March 4, the White House says it won't include the offer President Obama made in last year's budget to limit cost-of-living increases for Social Security and other federal beneficiaries. House Speaker John Boehner says you've given up on serious deficit reduction. True?
A: First of all, what you should understand is that this is going to be a traditional budget. It's going to embody the president's vision about the best way to expand growth, to expand opportunity and to further America's security, and you're going to see proposals that make the investments we need to do that, and also you're going to see lower deficit and lower debt than we had in last year's budget, so it's a budget that's going to take fiscal responsibility very seriously.
The president's door remains wide open to Speaker Boehner. He continues to have the same offer on the table that he put on the table in December of 2012, and if Speaker Boehner comes back and says he's open to the same offer he had in December of 2012, we could have a conversation. For the last year, though, that has not been a conversation Republicans appear to have been interested in having. If they come and say they are willing to, you know, put substantial revenues on the table, then we could enter into a bigger discussion.
Q: Last year's offer was seen as a big gesture by the president.
A: The president was very serious about wanting to negotiate, and he remains serious, but you need a partner to have a negotiation, and there has been no partner forthcoming.
Q: There's been weak economic data in the past few months on jobs, manufacturing, retail sales and housing. Does this reflect transient problems, like the weather, or a genuine slowdown?
A: I think that we try not to look at the economy from month to month, because the numbers bounce around. We look over a longer period of time, and over a longer period of time, you see steady, sustained progress. A couple months ago, it was running a little bit above average. It's been running a little bit in the opposite direction in the last couple months. I think some of that's due to weather, some of that's due to just numbers bounce around ... but were continuing to go in the right direction.
Q: So you're not too concerned?
A: I'd look at the broad sweep of the direction we're going, the fact that we have been creating jobs at a pace of over 2 million jobs a year for several straight years now. We should be able to continue on that pace.
Q: One of the first things the president did was push through that $787 billion stimulus bill, precisely five years ago this week. How will history judge its impact?
A: I think history will judge its impact very well. They will look back at two incidents separated by less than a hundred years. One was 1929 and the other is 2007. They'll see that in many ways the shock in 2007 to the economy was larger than the initial shock in 1929. It was a bigger loss of overall wealth. And they'll see that the economy recovered and healed, and that a big part of that story is the actions that President Obama took with the Recovery Act. The actions of the Federal Reserve and others are a part of that story as well. But it'll be very clear in the grand sweep of history and when you compare the United States with other countries just how much more quickly we recovered than just about any other country following that terrible crisis in 2007.
Q: So why is it still so controversial today?
A: It was designed for economic reasons to save the economy. It wasn't designed by a marketing team to figure out how to make it look as good as possible. That means it had a lot of different pieces to it. You'd rather spread money around and about, so it can be spent more quickly and serve a variety of goals, rather than pick one iconic policy that will maybe break through better with the public.
I also think and understand that it's difficult to say that things would have been even worse ... but it is crystal clear that things could have been much worse.