Obama set to deliver election year budget

US President Barack Obama on Monday unveils a budget packed with populist tax hikes on the rich and infrastructure and jobs spending designed to outmanoeuvre Republicans before he seeks re-election.

The measure, including billions of dollars in transportation and education and training projects, is expected to put the emphasis more on securing the accelerating US economic recovery than early cuts in the huge deficit.

But Obama’s bid to give Americans what he calls a “fair shot” in an economy he sees as weighted towards Wall Street and the wealthy was already drawing claims of gimmickry and political opportunism from Republicans.

“I think that there’s pretty broad agreement that the time for austerity is not today,” said White House Chief of Staff Jacob Lew on NBC’s Meet the Press on Sunday, though noted Obama was calling for $4-trillion in long-term deficit cuts.

“We need to be on the path where over the next several years we bring our deficit under control.

“Right now we have a recovery that’s taking route and if we were to put in austerity measures right now it would take the economy in the wrong way.”

Republicans will use Obama’s budget, for fiscal year 2013, as ammunition for their argument heading into November’s election that Obama is a prophet of a big spending government that is not consistent with core American values.

Spending agreement
The Obama budget is being seen on all sides as a partisan document that has little chance of being voted into law.

Democrats in the Senate say that they will not bring it up for a vote because the government is already financed through the next year on the basis of a spending agreement reached with Republicans in September.

Senate Republican minority leader Mitch McConnell wryly offered on CBS show Face the Nation on Sunday to bring Obama’s budget up himself.


“Senate Democrats haven’t passed a budget in a thousand days even though the law requires it,” McConnell said.

“So I intend to offer the president’s budget for him so he’ll have a chance to get a vote on it.”

Obama will travel to the suburbs of the crucial presidential election swing state of Virginia on Monday to unveil the budget and highlight an $8-billion plan to forge partnerships between community colleges and businesses to train two million workers for high-demand industries.

Low wage economies
The plan is a part of an effort by the White House to return jobs in the industrial and other sectors to the US that have fled to low wage economies in the developing world.

The proposal calls on Congress to back the Buffett rule, named after billionaire financier Warren Buffett, designed to ensure no household earning more than $1-million a year pays less than 30% in taxes.

It also renews Obama’s call for the George W Bush-era tax cuts to be repealed on Americans earning more than $250 000 a year.

Obama’s repeated attempts to repeal the Bush tax cuts and to bring in higher taxes for the rich have always foundered in Congress where they are opposed by Republicans.

Officials said the plan will also again call for a Financial Crisis Responsibility Fee levied on the largest banks and finance firms to compensate taxpayers for government bailouts during the financial crisis.

The proposal has in the past been blocked by Congress and appears to have little chance of being enacted now.

Fair fight
The plan will project a $1.33-trillion deficit for the current fiscal year, an administration official said.

Obama’s last annual budget before he seeks re-election in November will also project a $901-billion deficit for fiscal year 2013 (beginning October 2012) and will frame his campaign trail message of a fair fight for all.

The spending plan will also include more than $350-billion for short-term job creation programs, senior officials said.

Obama also resubmits portions of his American Jobs Act, which has foundered in Congress, to accelerate employment creation amid signs the economy is finally speeding up. Unemployment fell to 8.3% in January giving Obama’s re-election prospects a boost.

The president also renews his call for a boost to infrastructure spending which has again, had a tough ride in Congress.

The president wants to spend $50-billion to repair roads, rails and runways to create thousands of jobs. He also wants to spend $30-billion to modernize at least 35 000 schools and $30-billion more to help states and local governments hire teachers and first responders. — AFP

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Stephen Collinson
Guest Author
Advertising

Where is the deputy president?

David Mabuza is hard at work — it’s just not taking place in the public eye. The rumblings and discussion in the ANC are about factions in the ruling party, succession and ousting him

Zuma turns on judiciary as trial nears

Former president says pre-trial correspondence is part of another plot

SANDF inquiry clears soldiers of the death of Collins Khosa

The board of inquiry also found that it was Khosa and his brother-in-law Thabiso Muvhango who caused the altercation with the defence force members

Lockdown relief scheme payouts to employees tops R14-billion

Now employers and employees can apply to the Unemployment Insurance Fund for relief scheme payments
Advertising

Press Releases

Covid-19 and Back to School Webinar

If our educators can take care of themselves, they can take care of the children they teach

5G technology is the future

Besides a healthcare problem Covid-19 is also a data issue and 5G technology, with its lightning speed, can help to curb its spread

JTI off to court for tobacco ban: Government not listening to industry or consumers

The tobacco ban places 109 000 jobs and 179 000 wholesalers and retailers at risk — including the livelihood of emerging farmers

Holistic Financial Planning for Professionals Webinar

Our lives are constantly in flux, so it makes sense that your financial planning must be reviewed frequently — preferably on an annual basis

Undeterred by Covid-19 pandemic, China and Africa hold hands, building a community of a shared future for mankind

It is clear that building a community with a shared future for all mankind has become a more pressing task than ever before

Wills, Estate Administration and Succession Planning Webinar

Capital Legacy has had no slowdown in lockdown regarding turnaround with clients, in storing or retrieving wills and in answering their questions

Call for Expression of Interest: Training supply and needs assessment to support the energy transition in South Africa

GIZ invites eligible and professional companies with local presence in South Africa to participate in this tender to support the energy transition

Obituary: Mohammed Tikly

His legacy will live on in the vision he shared for a brighter more socially just future, in which racism and discrimination are things of the past

The best local and international journalism

handpicked and in your inbox every weekday