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
Emma Watson has become the latest target of the 4Chan nude hacking scandal
peopleThreats follows actress' speech on feminism and equality at the UN
Life and Style
food + drink
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
Life and Style
tech
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Geena Davis, founder and chair of the Geena Davis Institute on Gender in Media
tv
News
Alan Bennett criticised the lack of fairness in British society encapsulated by the private school system
peopleBut he does like Stewart Lee
Sport
John Terry, Frank Lampard
footballChelsea captain sends signed shirt to fan whose mum had died
Arts and Entertainment
Rita Ora will replace Kylie Minogue as a judge on The Voice 2015
tv
Life and Style
tech
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
life
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
life
Arts and Entertainment
Tennis player Andy Murray's mum Judy has been paired with Anton du Beke for Strictly Come Dancing. 'I'm absolutely delighted,' she said.
tvJudy Murray 'struggling' to let Anton Du Beke take control on Strictly
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
Sport
David Moyes and Louis van Gaal
football
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

Project Manager (retail, upgrades, rollouts)

£40000 - £45000 Per Annum + benefits: Clearwater People Solutions Ltd: Project...

Technical Project Manager - Software and Infrastructure - Government Experience

£400 Per Day: Clearwater People Solutions Ltd: Our client based in Central Lon...

Secondary teachers needed for supply roles in Sudbury

£21000 - £35000 per annum: Randstad Education Cambridge: Supply teachers requi...

Head of Technology

Negotiable: Randstad Education Reading: Head of Technology needed for a Outsta...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits