Tuesday, February 15, 2011

The proposed budget already challenged Obama

The American president proposes to freeze spending, to reduce the deficit to 1.1 trillion dollars. Enough for the Republicans, claiming 800 billion in additional savings.
From our Washington correspondent
The proposed budget for fiscal year 2012, submitted Monday to Congress by the White House, is intended to back the federal deficit by 10.9% of gross domestic product (GDP) this year to 7% next year is 1.101 trillion dollars. For the first time in many years, public spending across all categories would be roughly steady from 2011 to 2013, around 3.8 trillion dollars. But they will then return upward under the effect of spending on pensions and health.
That's what hurts the Republicans and that the outline presented by Barack Obama has no chance of being adopted in the state. The Republican majority in the House of Representatives, very partisan, oppose it. Even in the Senate, where Democrats are still the majority but where the sensitivity elected conservative dominate, the Chairman's draft will be significantly revised.
In the eyes of these parliamentarians, higher public spending in 2009 was supposed to be temporary and reflect a policy of extraordinary revival. In the difficult negotiations that will engage with executive power, they require a return to levels of public spending before the crisis closer to three trillion dollars.
Despite funding increases for new posts of teachers in science or for infrastructure investments, the White House this courageous resignation as president of reductions in net loans, or even the complete elimination of 200 programs dear to Democrats. Among these victims offs: aid to poor to subsidize their heating subsidies to major airports, appropriations to states for water sanitation projects. These sacrifices, however, represent only 33 billion.
The freeze for five years some public expenditures classified as "discretionary" is another gesture of the White House to demonstrate its sincerity in its efforts to gradually return to Uncle Sam to a reasonable lifestyle. To inflate its impact, the Chair recognizes the gel over ten years. We thus reached 400 billion dollars. It should however wait until 2014 when the deficit falls below 4% of GDP.
Deficit worsened
Before tackling the budget 2012, the Republicans want to cut appropriations for the current fiscal year that began Oct. 1. They promise a hundred billion of savings on a total of 3456 billion in spending. This approach is considered irresponsible by Democrats who fear its negative impact on demand at a time when their economy still seems fragile.
The zeal of the Republicans after their victory last November, would be more credible if their agreement late December with the White House, to extend tax cuts in place since 2001 and 2003, had worsened the deficit. Moreover, opposition from several Republican leaders in the abolition, by Barack Obama want, tax concessions to the oil industry, representing 46 billion over ten years also illustrates the gravity differences between the executive and Congress .

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