Obama to Lay Out Budget and Deficit Reduction Plan

Obama to Lay Out Budget and Deficit Reduction Plan

President Obama will deliver a speech on fiscal responsibility and faces the unenviable task of trying to convince multiple constituencies that his plan for addressing the nation’s economic woes and promoting growth is the best way to go.

Published April 13, 2011

Last week’s bitterly partisan negotiations over how to fund the rest of the 2011 fiscal year was just the opening salvo of many budget battles to come. On Wednesday afternoon, President Obama will deliver a nationally televised speech on fiscal responsibility; he faces the unenviable task of trying to convince multiple constituencies that his plan for addressing the nation’s economic woes and promoting growth is the best way to go.

It won’t be easy. The 2012 budget negotiation process is coinciding with the need to raise the nation’s federal debt limit before an election year. In addition, the nation’s biggest lenders have their own fiscal woes to deal with. Japan, the second-largest holder of American treasury notes, explains Georgia Tech economics professor Thomas Boston, is in the midst of an economic crisis caused by a tsunami, an earthquake and nuclear plant mishaps. China, the nation’s largest debt-holder, wants to diversify its holdings.

Meanwhile, the president’s strongest base, African-Americans, is starting to push back. Rep. Maxine Waters (D-California) said that during a community meeting last weekend, attended by more than 2,000 Black constituents, she was questioned whether Obama is fighting for their needs. Some attendees believed that during the negotiations to prevent a government shutdown last weekend, the president ceded too much power to Republicans. Does she agree?

“Oh yes, absolutely. As a matter of fact, I’m anxious to hear [Wednesday’s speech]. When I heard him come out and applaud the biggest budget cuts in the history of this country [in the continuing resolution], I’m thinking, what is he doing and what is he trying to do? You can’t have it both ways,” said Waters. “You can’t say you’re fighting against the cuts that will basically dismantle programs that create so much harm in our community and then applaud the cuts themselves and [say that] we all have to come together and share the pain.”

According to Waters, the people who have the least have nothing to share.

Obama’s task will be to explain why his plan is more feasible and less drastic than the Republicans’, Boston said. The plan shouldn’t include spending cuts that will present hardships for the general public and vulnerable populations. Regardless, it won’t impact the deficit much because discretionary spending, on things like community development block grants and job training programs, represents such a small part of the federal budget.

According to Boston, Obama also will need to offer a combination of solutions that reduce the deficit and increase revenues.

“He will have to at some point address reversing the Bush-era tax cuts. There’s no way around it,” warned Boston, insisting that the nation needs to raise taxes on upper-middle-class and wealthy individuals.. “The more we put it off the greater the brick wall. We need some revenue-enhancing mechanisms.”

Congressional Black Caucus chairman Emmanuel Cleaver (D-Missouri) says his African-American and low-income constituents are “crying and screaming, as they should be,” while the rich people in his district are celebrating the economic gifts Congress just keeps on giving.

“Obama has to convince me and the at-risk members of our nation that they will not bear the burden of carrying the pain or the deep cuts as a result of the deficit,” Cleaver said. “I want him to speak in terms of removing the load from the little person and placing the load on those who can carry it on the base of their financial strength.”

 

 

(Photo: AP Photo/Charles Dharapak, File)

Written by Joyce Jones

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