The environment, the futuristic Joint Strike Fighter and even Sesame Street’s Big Bird and Elmo are in the firing line of a political shoot-out between Democrats and Republicans over US debt.<\/p>\n
They each face cutbacks as the parties scrap over plans aimed at curbing the nation’s budget deficit, which is tipped to pass $US1 trillion for a fourth successive year in 2012.<\/p>\n
In an opening gambit, Barack Obama on Monday outlined plans to scale back or cut more than 200 government programs for the new financial year starting October 1, including programs as diverse as heating subsidies for low-income earners, summer school grants for needy students and a project to clean up the Great Lakes.
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The President’s plan would shift resources into education more broadly and infrastructure projects as part of his ”win the future” catchcry.<\/p>\n
But big savings would not be generated before the current year’s deficit balloons to a higher than expected $US1.65 trillion, equal to 11 per cent of the nation’s gross domestic product.<\/p>\n
To underscore the thrust of his blueprint, Mr Obama visited a Baltimore school, where he talked of the importance of education in arresting America’s deficit by leading the world in science, research and technology.<\/p>\n
”While it’s absolutely essential to live within our means, while we are absolutely committed to working with Democrats and Republicans to find further savings and to look at the whole range of budget issues, we can’t sacrifice our future in the process,” Mr Obama said.<\/p>\n
Under the President’s plan, the deficit would shrink by $US500 million in 2012 through the cuts, combined with tax increases, but would still run into hundreds of billions of dollars annually through to 2018. The trajectory would lift US debt by an estimated $US7 trillion to about $US20 trillion, equal to 80 per cent of GDP (provided the economy grows by 3 per cent a year).<\/p>\n
The President’s plan was immediately attacked by Republicans.<\/p>\n
”The President’s budget is the clearest sign yet he simply does not take our fiscal problems seriously,” said the Republican leader in the Senate, Mitch McConnell.<\/p>\n
As part of their alternative plan, Republican leaders would slash funding for the Environment Protection Agency by $US3 billion, while stripping the authority of its ability to regulate greenhouse gas emissions by US industry. The party would also axe funds for the Corporation for Public Broadcasting, which is the biggest provider of money to public television shows including Sesame Street.<\/p>\n
”This Republican budget would essentially kill Big Bird while continuing to subsidise Big Oil,” a Democrat congressman, Ed Markey, said.<\/p>\n
The proposals are part of efforts by Republicans to reduce spending by at least $US100 billion in the current year’s budget, which was never formally approved by Congress. Instead, Congress has had to pass regular resolutions to maintain funding for government programs, with the next vote due in early March.<\/p>\n
Republicans have threatened to shut down the government should Democrats not agree to big cuts now.<\/p>\n
Mr Obama’s plan backs defence cuts of $US78 billion, including the likely axing of an alternative engine for the Joint Strike Fighter, which is backed by a dozen countries including Australia and Britain.<\/p>\n","protected":false},"excerpt":{"rendered":"
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