PRESIDENT BARACK Obama will send a multi-trillion budget to Congress on February 14th, a spokesman for his administration said, setting up a conflict over spending that may dominate a divided Congress for the rest of the year.
The budget for 2012 is a political document that will put into precise language the administration’s priorities for increasing economic growth and creating jobs.
Republicans who campaigned on promises to slash spending took control of the House of Representatives and reduced the Democrats’ majority in the Senate.
“The sooner Washington ends its dependence on more spending, the sooner our economy will see real growth,” Senator Ron Johnson of Wisconsin said.
Mr Obama says he is ready to trim or eliminate programmes, specifically mentioning community action grants to local governments, to allow spending increases for his priorities.
“We want to cut with a scalpel as opposed to a chain saw,” he said last week. “Frankly, we’re just going to have to trim some of these programmes.”
The non-partisan Congressional Budget Office said last week the US budget deficit will widen this year to a record $1.5 trillion (€1.1 trillion), partly because of the $858 billion tax-cut measure passed last month by Congress.
“The US faces daunting economic and budgetary challenges,” the report said. In his State of the Union address, the president proposed a five-year freeze on all annual appropriations for a saving of about $400 billion over a decade. It would not apply to defence, Medicare, Medicaid, social security and interest on the national debt.
The freeze would apply to 18 per cent of the budget, or $663 billion, in the 2011 fiscal year, the budgetary office said in an economic outlook published last week. Republicans and some Democrats say the freeze does not go far enough. – (Bloomberg)
