Australia: Obama's budget challenge

Sydney Morning Herald

Obama outlines attack on debt Simon Mann


BARACK Obama has pressed the button on his 2012 re-election campaign, mapping out a path of shared fiscal responsibility as a means of tackling America's runaway debt.

Calling on political rivals to find common ground in recalibrating the nation's budget priorities, President Obama portrayed himself as a leader willing to compromise and as the arch protector of an American way of life that offered its citizens ''security and dignity'' through long-standing entitlement programs - Medicare and social security, in particular.

In a speech that served as a counterpunch to Republican calls for steep spending cuts and a major revamp of retirement programs, Mr Obama - who was heading to Chicago overnight to launch his 2012 re-election bid - proposed cutting $US4 trillion from America's budget deficit over the next 12 years but advocated tax increases on the rich as part of a mix of initiatives.

Advertisement: Story continues below The measures could include ending tax deductions for mortgage interest and donations to charity. But the mainstay would be allowing income tax cuts to expire at the end of next year for Americans in top tax brackets.

Mr Obama's figures are similar to numbers put by his bipartisan debt commission, established last year, which called for $US4 trillion of deficit savings over a decade.

But they fall short of a blueprint advanced by the Republican leader of the House of Representatives Budget Committee, Paul Ryan, that calls for spending cuts of $US5.8 trillion combined with tax cuts for individuals and business to reduce the deficit by $US4.4 trillion by 2021.

Mr Obama used his speech at George Washington University to attack the Republican blueprint, saying that people like himself and billionaire investor Warren Buffet ''don't need another tax cut''.

But his plan, generally, was short on detail, much of it handballing the hard work to others. Vice-President Joe Biden will be dispatched to Capitol Hill next month to thrash out details with congressional leaders, while Defence Secretary Robert Gates will be asked to slice an additional $US400 billion from military operations.

The President's address came as House of Representatives Speaker John Boehner prepared to put last weekend's 2011 budget deal, which incorporates $US38 billion of savings in the current year, to a vote in the Republican-controlled chamber.

http://www.smh.com.au/world/obama-outlines-attack-on-debt-20110414-1dfx2.html