Wed, Feb 16, 2011 - Page 7 News List

Obama budget highlights divide

NO ‘SESAME STREET’?The House of Representatives was to debate a bill yesterday to cut a further US$61 billion in cuts to programs over the remainder of this fiscal year

AP, WASHINGTON

US President Barack Obama sent Congress a US$3.73 trillion budget proposal that highlights the partisan divide bound to shape next year’s presidential race.

Obama administration officials say the next fiscal year’s spending plan submitted on Monday would cut the soaring US deficit over the long haul, while investing in The US’ future with spending on clean energy, education and high speed rail.

Republicans, who took control of the House of Representatives last month in part because of voter anger over soaring deficits, said Obama’s plan represented a feeble attempt to cut the government’s debt. They were ready to start pushing through their own package of deep cuts in domestic spending through the House.

Eager to please their conservative Tea Party supporters, Republicans were championing US$61 billion in cuts to hundreds of programs for the remaining seven months of this federal fiscal year under a bill the House planned to debate yesterday.

The volunteer community service program AmeriCorps and the Corporation for Public Broadcasting, which broadcasts such shows as children’s favorite Sesame Street, would be completely erased, while deep cuts would be carved from programs for feeding poor women and children and training people for jobs.

Reductions of that magnitude this late in a fiscal year would have a jarring impact on many programs. The House planned to approve the measure today.

The proposed reductions set up a potential showdown with the White House. Republicans included their cuts in a must-pass bill financing the government, which otherwise runs out of money on March 4. The Democratic-controlled Senate and Obama himself are sure to reject them.

In his budget proposal unveiled on Monday, Obama, who is expected to seek re-election next year, largely ignored the politically painful recommendations of his own bipartisan deficit commission. That panel had warned that the US is imperiled without significant cuts to huge entitlement programs, including health and pension plans for the elderly.

Obama’s plan that mixes tax increases on the wealthy and some businesses, a five-year freeze on most domestic programs and boosts for elementary schools, clean energy and airport security.

The US$14 trillion national debt — the cumulative total of deficits — would grow to US$16.7 trillion by Sept. 30 next year Obama’s budget projects. Much of that debt is owed to China.

The budget plan would trim spending at the State Department, while maintaining significant funds for programs in Afghanistan and Pakistan as well as Iraq, where US diplomats will face serious challenges as US troops continue to withdraw.

The budget retains major assistance programs for US allies in the Middle East, including US$1.5 billion for Egypt despite the recent ouster of Egyptian president Hosni Mubarak. Officials stressed, however, that money for Egypt, including US$1.3 billion in military aid, could be altered depending on developments.

Israel is slated for US$5.6 billion, including US$3.1 billion in military aid.

The proposed budget foresees reductions for development funds in Africa and Latin America. It would eliminate direct military assistance totaling US$5 million for five countries — Chile, Haiti, Malta, East Timor and Tonga.

The projected US$1.65 trillion deficit for the current year would be the highest dollar amount ever, surpassing the US$1.41 trillion deficit hit in 2009.

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