Business | Economy

Obama calls for ‘smart’ deficit reduction

US president argues it helps maintain US economic growth

  • AFP
  • Published: 17:21 February 23, 2013
  • Gulf News

  • Image Credit: AP
  • Obama noted that it appeared to him that Republicans had decided that instead of compromising, “they would rather let these cuts fall squarely on the middle class.”

Washington: US President Barack Obama urged Congress on Saturday to stop automatic spending cuts threatening thousands of American jobs looming at the beginning of next month.

Instead, he argued in his weekly radio and internet address, they should implement “smart” deficit reduction to help maintain US economic growth.

“After all, as we learned in the 1990s, nothing shrinks the deficit faster than a growing economy that creates good, middle-class jobs,” the president said.

“That has to be our driving focus. That has to be our North Star.”

The steep budget cuts known as “the sequester” are due to take effect on March 1 unless Congress acts to prevent them.

But Obama noted that it appeared to him that Republicans had decided that instead of compromising, “they would rather let these cuts fall squarely on the middle class.”

Earlier this month, the White House issued a doom-laden survey of the impact of sequestration.

It said 10,000 teacher jobs were at risk, food inspections could stop, 373,000 mental health patients would lose treatment and prosecutors could be furloughed.

The FBI would have 1,000 fewer officers, small business loans would be cut by $540 million (Dh1,983 million), and around 600,000 women and children could lose government-funded emergency food aid, according to the White House.

At the Pentagon, almost 800,000 employees — the equivalent of every person in Miami and Cleveland combined — will be forced to take unpaid leave, Obama noted in his address.

Democrats and Republicans should work together to build on the more than $2.5 trillion in deficit reduction that has already been achieved, he argued.

“But I believe we should do it in a balanced way — with smart spending cuts, entitlement reform, and tax reform,” the president said.

“That’s my plan. It’s got tough cuts, tough reforms, and asks more of the wealthiest Americans. It’s on the White House website for everyone to see. And it requires Democrats and Republicans to meet half way to resolve the problem.”

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