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Barack Obama unveils US budget plans for 2012 | |
(about 3 hours later) | |
US President Barack Obama has unveiled his 2012 budget, describing it as a "down payment" on future cuts to the US budget deficit. | |
The budget aims to cut $1.1tn (£690bn) from the US deficit over a decade. | |
He said the US must live within its means and called for reductions in scores of programmes, but said "we can't sacrifice our future". | |
Republicans, who control the House of Representatives, do not think the cuts go far enough in tackling the deficit. | Republicans, who control the House of Representatives, do not think the cuts go far enough in tackling the deficit. |
The speaker of the House of Representatives, Republican John Boehner, told US TV network NBC the proposed budget would "continue to destroy jobs by spending too much, borrowing too much and taxing too much". | |
Longer approach | |
Analysts have also wondered if cutting $1.1tn will be enough. | Analysts have also wondered if cutting $1.1tn will be enough. |
"It's a lot less than the Republicans wanted to see," said Philip Poole, global head of macro investment at HSBC Global Asset Management in London. | "It's a lot less than the Republicans wanted to see," said Philip Poole, global head of macro investment at HSBC Global Asset Management in London. |
"It's a start, it's a move in the right direction, but it's probably not enough in terms of what needs to be done ultimately, and it's not starting quickly enough." | "It's a start, it's a move in the right direction, but it's probably not enough in terms of what needs to be done ultimately, and it's not starting quickly enough." |
Whereas countries such as the UK have imposed spending cuts to reduce their deficits, the US has said rapid, drastic spending cuts are not the way forward. | |
US Treasury Secretary Timothy Geithner said two weeks ago that "you got to make sure that you don't hurt the recovery and take too much risk that you damage the early expansion by shifting too prematurely to substantial restraints". | |
Long process | |
The US is one of only two G20 countries which expects its deficit to rise, not fall, this year. | |
The deficit is to predicted to increase to $1.645tn in the 2011 financial year, then drop to $1.1tn in 2012. | |
If this was achieved it would cut the deficit as a share of the US economy to 3.2% by 2015 from 10.9% this year, | |
The 2012 budget is a proposal to Congress laying out the president's policy priorities. | The 2012 budget is a proposal to Congress laying out the president's policy priorities. |
Mr Lew, director of the Office of Management and Budget, said he believed the president's budget would help "the government live within its means, while still investing in America's future". | Mr Lew, director of the Office of Management and Budget, said he believed the president's budget would help "the government live within its means, while still investing in America's future". |
But the two parties disagree over the level of spending cuts needed to cut the deficit and boost economic recovery. | But the two parties disagree over the level of spending cuts needed to cut the deficit and boost economic recovery. |
Bringing them together will be a long process that takes most of the year before the required congressional approval of the budget. | Bringing them together will be a long process that takes most of the year before the required congressional approval of the budget. |
The proposed $1.1tn budget reductions are much greater than the $400bn of cuts in non-essential programmes the president unveiled in his State of the Union address last month. | The proposed $1.1tn budget reductions are much greater than the $400bn of cuts in non-essential programmes the president unveiled in his State of the Union address last month. |
Mr Obama was also expected to propose an $18bn plan to improve high-speed internet access, and a further $8bn for high-speed railways. | |