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Lew says economy enters self-sustaining phase as budget debated

Tuesday, February 3, 2015 - 23:44

[WASHINGTON] The US economy has entered a period of self-sustaining growth, Treasury Secretary Jacob J Lew told lawmakers on Tuesday, calling on Congress to build on that progress and enact President Barack Obama's budget.

"By virtually any metric, our economy is stronger and continuing to gain strength," Mr Lew said in prepared testimony to the House Ways and Means Committee, noting that projections for US growth are "substantially faster than all of the other advanced economies combined."

Mr Obama this week sent Congress a US$4 trillion fiscal proposal that would raise taxes on corporations and the nation's top earners, and spend more on infrastructure and housing. It would stabilize, but not eliminate, the annual budget deficit.

"While our economic recovery is well established, we have more work to do to make sure the gains are shared more broadly," Mr Lew said.

"Congress should not repeat the mistakes of the past by allowing further sequestration cuts in 2016," he said, referring to mandatory spending limits in recent years he called bad for the economy.

The proposed budget is for the fiscal year starting Oct 1. Mr Obama's plan includes US$2.1 trillion in new revenue over the next 10 years, some of that from a 19 per cent minimum tax on US companies' foreign earnings.

Mr Lew also reiterated a proposal in the Obama budget that would levy a new fee on large financial firms to "further discourage excessive borrowing."

BLOOMBERG