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Obama's budget to cut deficit by US$1.1t
By Alister Bull and Jeff Mason |
February 15, 2011, Tuesday
|
Print Edition
Print Edition
PRESIDENT Barack Obama proposed a budget yesterday that would cut the United States deficit by US$1.1 trillion over 10 years, setting the stage for a bitter fight with Republicans who vow even tougher spending controls.
Conservatives say Obama, a Democrat, is a tax-and-spend liberal, and they aim to make the 2012 presidential election a referendum on his fiscal track record.
Details of the budget proposal provided by the White House showed the deficit rising to US$1.645 trillion in fiscal 2011, then falling sharply to US$1.101 trillion in 2012.
This trend would trim the deficit as a share of the US economy to 3.2 percent by 2015 from 10.9 percent this year.
"It's a start, it's a move in the right direction," said Philip Poole, global head of macro investment strategy at HSBC Global Asset Management in London. "It's a lot less than the Republicans wanted to see. It's not clear this can actually be enacted," he said.
Obama's budget for fiscal 2012 is a proposal to Congress laying out the president's policy priorities. Months of wrangling with the Republican opposition in Congress will now follow.
"Even though we might have some differences at the outset, we're very eager to work with Republicans to cut spending, reduce our deficit," a senior Obama administration official told reporters.
The official cited a December tax pact forged between Obama and Republicans as evidence the two sides can work together, but the initial reaction from the other party was skeptical.
"The president talks like someone who recognizes that spending is out of control, but so far it hasn't been matched with action," Senate Republican leader Mitch McConnell said in a statement.
"Americans don't want a spending freeze at unsustainable levels. They want cuts, dramatic cuts. And I hope the president will work with us on achieving them soon."
Republicans have already unveiled much tougher proposals aimed at reining in rising US debt, which is set to hit a legal limit in coming months.
Failure by lawmakers to agree on funding government operations after a March 4 deadline expires could see the government shutting down.
Conservatives say Obama, a Democrat, is a tax-and-spend liberal, and they aim to make the 2012 presidential election a referendum on his fiscal track record.
Details of the budget proposal provided by the White House showed the deficit rising to US$1.645 trillion in fiscal 2011, then falling sharply to US$1.101 trillion in 2012.
This trend would trim the deficit as a share of the US economy to 3.2 percent by 2015 from 10.9 percent this year.
"It's a start, it's a move in the right direction," said Philip Poole, global head of macro investment strategy at HSBC Global Asset Management in London. "It's a lot less than the Republicans wanted to see. It's not clear this can actually be enacted," he said.
Obama's budget for fiscal 2012 is a proposal to Congress laying out the president's policy priorities. Months of wrangling with the Republican opposition in Congress will now follow.
"Even though we might have some differences at the outset, we're very eager to work with Republicans to cut spending, reduce our deficit," a senior Obama administration official told reporters.
The official cited a December tax pact forged between Obama and Republicans as evidence the two sides can work together, but the initial reaction from the other party was skeptical.
"The president talks like someone who recognizes that spending is out of control, but so far it hasn't been matched with action," Senate Republican leader Mitch McConnell said in a statement.
"Americans don't want a spending freeze at unsustainable levels. They want cuts, dramatic cuts. And I hope the president will work with us on achieving them soon."
Republicans have already unveiled much tougher proposals aimed at reining in rising US debt, which is set to hit a legal limit in coming months.
Failure by lawmakers to agree on funding government operations after a March 4 deadline expires could see the government shutting down.
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