Obama to set out painful budget plans for austerity in America

Americans are about to get a first glimpse of what tight-fisted federal government looks like with President Barack Obama releasing an austerity-tinged draft budget this morning even as Republicans move to push through a short-term spending plan featuring a far more radical range of spending cuts.

The arrival of Mr Obama's 2012 budget blueprint in Congress will be the starting pistol for a fight over federal spending that might just lead to a ground-breaking pact by both parties on getting US spending habits under control. The White House is also seeking an agreement on raising the debt ceiling.

More likely, however, the debate will degenerate quickly into warfare, with Republicans seeking to outbid each other on who is more serious about tackling deficits, and Democrats battling to defend social programmes close to their hearts. The end result could be legislative gridlock and perhaps even a government shutdown.

The Obama draft will tread a line between offending Democrats, with some of their favourite domestic programmes singled out for cuts, while going far enough to convince moderate Republicans he is serious about budget discipline. Officials say it will deliver on a promise made in the State of the Union Address to begin a five-year-freeze on non-defence domestic spending.

"After a decade of rising deficits, this budget asks Washington to live within its means, while at the same time investing in our future," President Obama said in his weekly radio address on Saturday. "It cuts what we can't afford to pay for what we cannot do without."

Yet yesterday the Republican chairman of the House Budget Committee, Paul Ryan, excoriated Mr Obama for not going far enough in his plan. "It looks like the debt's going to continue rising under this budget," he said. "Presidents are elected to lead, not to punt. This president has been punting."

More urgent than the 2012 budget are steps that must be taken to set spending levels for the rest of this fiscal year, ending in October. The Republican majority in the House of Representatives will this week try to pass a resolution to cut $60bn (£37.5bn) from government spending over seven months. Translating to annual cuts of $100bn or more, it reflects the demands of conservatives sent to Congress by the Tea Party.

The Republican proposals will meet opposition in the Senate, where Democrats still have a slim majority. But were it to pass Congress in its current form, it would inflict instant pain on a huge range of programmes. Low income students would see grants for university fees slashed, for instance, the education and environmental protection departments would have their budgets scythed, and Mr Obama would see his plans for investment in innovation, clean energy and high-speed trains eviscerated. The agency that oversees public broadcasting the US – a favourite target of conservatives – would simply be shut.

"Next week, we are going to cut more than $100 billion. And we're not going to stop there," said the House Speaker John Boehner, who dare not take anything less than a hatchet to spending levels for fear of triggering a mutiny from the right wing of his party. "Once we cut the discretionary accounts, then we'll get into the mandatory spending. And then you'll see more cuts."

There is also the parallel challenge of dealing with the country's debt, which is now brushing against its maximum legal ceiling of just over $14 trillion. To ensure that government can keep functioning – and keep paying the existing debt – it must get permission from Congress to increase that ceiling, preferably before April.

Bumping up the ceiling should happen almost automatically. But this time, conservative Republicans intend to use the request to squeeze the White House on a broader deficit-cutting strategy.

Behind all of this lies the debate – with which Britain is entirely familiar – over the relative needs of cutting spending and reducing government debt while not smothering economic recovery.

"Anything considered draconian is going to appeal to a certain crowd that's out there saying we've got to cut our way out of the problem," commented Ben Nelson, a key moderate Democrat in the Senate. "But for most of us, if you cut the wrong things, then you impair your ability to grow your way out."

News
people'It can last and it's terrifying'
Sport
Danny Welbeck's Manchester United future is in doubt
footballGunners confirm signing from Manchester United
Sport
footballStriker has moved on loan for the remainder of the season
Sport
footballFeaturing Bart Simpson
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Olivia Colman topped the list of the 30 most influential females in broadcasting
tv
News
Kelly Brook
peopleA spokesperson said the support group was 'extremely disappointed'
News
The five geckos were launched into space to find out about the effects of weightlessness on the creatures’ sex lives
i100
Life and Style
techIf those brochure kitchens look a little too perfect to be true, well, that’s probably because they are
Sport
Andy Murray celebrates a shot while playing Jo-Wilfried Tsonga
TennisWin sets up blockbuster US Open quarter-final against Djokovic
Arts and Entertainment
Hare’s a riddle: Kit Williams with the treasure linked to Masquerade
booksRiddling trilogy could net you $3m
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
News
news Video - hailed as 'most original' since Benedict Cumberbatch's
News
i100
Life and Style
The longer David Sedaris had his Fitbit, the further afield his walks took him through the West Sussex countryside
lifeDavid Sedaris: What I learnt from my fitness tracker about the world
Arts and Entertainment
Word master: Self holds up a copy of his novel ‘Umbrella’
booksUnlike 'talented mediocrity' George Orwell, you must approach this writer dictionary in hand
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

SQL Implementation Consultant (VB,C#, SQL, Java, Eclipse, integ

£40000 - £50000 per annum + benefits+bonus+package: Harrington Starr: SQL Impl...

SQL Technical Implementation Consultant (Java, BA, Oracle, VBA)

£45000 - £55000 per annum + Benefits + Bonus: Harrington Starr: SQL Technical ...

Head of IT (Windows, Server, VMware, SAN, Fidessa, Equities)

£85000 per annum: Harrington Starr: Head of IT (Windows, Server, VMware, SAN, ...

Lead C# Developer (.Net, nHibernate, MVC, SQL) Surrey

£55000 - £60000 per annum + Benefits + Bonus: Harrington Starr: Lead C# Develo...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering