By Nick Mann | 8 April 2013
US President Barack Obama plans to outline ‘commonsense’ tax reform and ‘critical’ investments for jobs and growth when he announces a ‘compromise’ 2014 budget on Wednesday.
In his weekly address to the nation on Saturday, Obama said the budget would also set out ‘tough’ reforms to the Medicare health insurance programme and close tax loopholes for the ‘wealthy and well-connected’.
He added: ‘If we want to keep rebuilding this economy on a stronger, sturdier foundation for growth – growth that creates good, middle-class jobs – we need to make smarter choices. This week, I’ll send a budget to Congress that will help do just that – a fiscally responsible blueprint for middle-class jobs and growth.
‘My budget will reduce our deficits – not with aimless, reckless spending cuts that hurt students and seniors and middle-class families but through the balanced approach that the American people prefer, and the investments that a growing economy demands.’
Put together, the measures to be outlined in the budget will reduce US deficits over the next few years by almost $2 trillion, to go with the $2.5trn of savings already signed into law, Obama said.
‘That surpasses the goal of $4trn in deficit reduction that many economists believe will stabilise our finances,’ he noted.
The budget document will be submitted to Congress, which will need to approve, amend or reject the plans before the start of the 2014 fiscal year in October.
Obama stressed that the budget was not his ‘ideal’ plan to reduce the deficit, but was instead a compromise he was willing to accept to move beyond the culture of ‘short-term, crisis-driven’ decision-making. ‘It includes ideas many Republicans have said they could accept as well,’ he claimed. ‘It’s a way we can make progress together.’
‘But deficit reduction cannot come at the cost of economic growth or middle-class security. And it doesn’t have to. My budget will make critical investments to grow the economy, create jobs, and strengthen the middle class,’ he added.
John Boehner, the Republican leader of the House of Representatives, said it appeared that the budget would take a ‘step in the wrong direction’ by making any spending reductions conditional on another round of tax increases.
‘If President Obama believes – as Republicans do – that responsible reforms are needed to shore up programs like Social Security, there’s no reason why they should be held hostage for more tax hikes. Tax increases will impede economic growth and make balance and job creation harder,’ he said on Friday.
Obama should outline a balanced budget similar to that backed by the House of Representatives last month, he added.
