Obama likely to opt for spending freeze
Wednesday, 27 January 2010
From Fazle Rashid
NEW YORK, Jan 26: Frightened by the ballooning federal budget deficit President Obama intends to use the next three remaining years of presidency to enforce a strict freeze in spending which hopefully will not cover foreign aid but make contributions to multilateral agencies highest in the world uncertain. The spending freeze will be the major component of his first state of the union address billed for tomorrow and the budget he will send to the Congress next Monday.
The freeze would cover air traffic control, farm subsidies, perhaps, paving the way for the successful conclusion of the stalled Doha Round of talks, education, nutrition and national parks. The areas that will remain outside the spending freeze will be Pentagon, foreign aid, homeland security and the entitlement programmes like fastest growing components of the federal budget the medicare, medicaid and social security.
The spending freeze in budget savings would be small relative to the deficit: the estimated $250 billion in savings over next ten years would be less than 3.0 per cent of the roughly $9.0 trillion in additional deficits the government is expected to accumulate over that time, the New York Times in a report said today.
Fiscally conservative Democrats in the US Congress have urged President Obama to support a freeze that would indicate to the voters, Wall Street and other nations that the president is willing to make tough decisions at a time when deficit and national debt have reached levels that undermines nation's long-term prosperity. Perception that government spending is out of control have contributed to Obama's loss of support and concerns over government's fiscal health, the same paper said.
The United States will have to borrow money from investors and China in particular in financing budget deficit. The government has not identified any particular programme which would be cut or eliminated but these will be incorporated in the Budget proposals it is sending to the Congress. The reduction will be $10 to $15 billion.
NEW YORK, Jan 26: Frightened by the ballooning federal budget deficit President Obama intends to use the next three remaining years of presidency to enforce a strict freeze in spending which hopefully will not cover foreign aid but make contributions to multilateral agencies highest in the world uncertain. The spending freeze will be the major component of his first state of the union address billed for tomorrow and the budget he will send to the Congress next Monday.
The freeze would cover air traffic control, farm subsidies, perhaps, paving the way for the successful conclusion of the stalled Doha Round of talks, education, nutrition and national parks. The areas that will remain outside the spending freeze will be Pentagon, foreign aid, homeland security and the entitlement programmes like fastest growing components of the federal budget the medicare, medicaid and social security.
The spending freeze in budget savings would be small relative to the deficit: the estimated $250 billion in savings over next ten years would be less than 3.0 per cent of the roughly $9.0 trillion in additional deficits the government is expected to accumulate over that time, the New York Times in a report said today.
Fiscally conservative Democrats in the US Congress have urged President Obama to support a freeze that would indicate to the voters, Wall Street and other nations that the president is willing to make tough decisions at a time when deficit and national debt have reached levels that undermines nation's long-term prosperity. Perception that government spending is out of control have contributed to Obama's loss of support and concerns over government's fiscal health, the same paper said.
The United States will have to borrow money from investors and China in particular in financing budget deficit. The government has not identified any particular programme which would be cut or eliminated but these will be incorporated in the Budget proposals it is sending to the Congress. The reduction will be $10 to $15 billion.