The U.S. economy “appears to have entered a period of self-sustaining growth,” Treasury Secretary Jack Lew said Tuesday in an appearance on Capitol Hill.
Lew sounded upbeat on economic growth while testifying on the Obama administration’s budget, which was released Monday.
Referencing the relatively strong economic growth to end 2014, Lew suggested that the focus of the budget was to address inequality, rather than to bolster the recovery, which technically began in 2009 but has been weak and fragile.
“With the recovery now well established, we need to ensure that hard working Americans share the gains,” Lew said.
Obama has made “middle class economics” the tagline for his budget proposals, which feature tax credits for middle class families and provisions for lowering the costs of higher education born by families.
Claiming victory on the economic recovery is a risky move for high-level officials. Lew’s predecessor, Timothy Geithner, famously drew derision for a New York Times op-ed touting the recovery in 2010, just months before economic growth slowed again.
But 2014 saw the most jobs created in the U.S. since 1999, with gross domestic product growth accelerating through the end of the year. Inflation-adjusted GDP growth clocked in at 2.4 percent for the year, according to the Commerce Department’s first estimate of growth for the fourth quarter. That rate was the best rate since 2010.
The president’s budget released Monday sees that rate accelerating to 3.1 percent for 2015 and 3 percent for 2016 before slowing down to a long-run rate of 2.3 percent.
Those economic assumptions are slightly more optimistic than those from the non-partisan Congressional Budget Office and the Federal Reserve. They also reflect economists’ lowered estimates of the long-run potential of the U.S. economy.
Nevertheless, both government agencies and the private sector see U.S. prospects as much brighter than those for other advanced economies, such as the euro zone or Japan.
Lew pointed to slow or negative growth in other advanced economies Tuesday as a vindication of the Obama administration’s economic management.
The administration’s focus on the distribution of income gains rather than with overall growth in the budget has drawn criticism from Republicans. Paul Ryan, the chairman of the committee before which Lew testified Tuesday, accused the administration of trying to “exploit envy economics” on Sunday.
Lew defended the administration’s approach Tuesday, saying during questioning that the “it’s not an economy where’s there’s broad opportunity as there should be.”
