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Deep doubts as Obama opens fiscal debate

30 July 2013, 11:39

Washington - President Barack Obama is imploring Americans to join him in breaking free from what he sees as the partisan shackles holding back a robust economic recovery.

But opposition Republicans aren't swayed and some Obama supporters are not impressed.

In three campaign-style appearances in two days last week, with more promised in the weeks ahead, the president blamed political opponents for trapping the American middle class in a perpetual downward spiral.

Obama is also preparing for what will likely be a brutal partisan battle this autumn over raising the US borrowing limit to keep the bills paid.

His message further implores voters to join him in blocking a fresh Republican foray into drastic government spending cuts that target issues key to Obama's second-term agenda.

The new White House campaign coincides with national polls that show Obama's approval rating slipping, satisfaction with Congress at historic lows and voters increasingly concerned that a return to economic normalcy after the Great Recession is still years away.

Speech dismissed

Yet, as the president seeks to shake up the national discussion, he so far has not laid out fresh plans, leaving himself open to counterattacks by his Republican opponents and sighs of disappointment among many backers.

In his economic speech last week at Knox College in Illinois, Obama spoke about "growing inequality" and promised to outline proposals later this summer aimed at adapting the US economy to an increasingly competitive and interconnected world.

The speech was dismissed by opposition leaders like House Speaker John Boehner, who has effectively stymied Obama's legislative agenda since the party regained the majority in the House of Representatives in 2010.

"His speech turned out to be all sizzle and no steak," said Boehner. "That's assuming that there is any sizzle left after you've reheated this thing so many times."

Senator Bernie Sanders, an independent who votes with the Democrats, said Obama needed to, but did not, outline bold new legislation to create jobs through a major nationwide program to rebuild the country's infrastructure - to fix highways, shore up bridges, overhaul airports and seaports, and strengthen railways.

Sanders said the president should have gotten tough and told Republicans that "if they are not prepared to go forward they are going to pay a political price."

Earning less

American economic reality should give Obama an overwhelmingly powerful bludgeon when he is in the bully pulpit. The economic and fiscal landscape left behind by President George W Bush has resulted in, over the last 10 years, nearly all income gain in the country going to the richest 1%.

The average corporate chief has received a 40% pay raise since 2009, corporations are raking in record profits, and the stock market repeatedly breaks through to new highs.

Average Americans, meanwhile, are earning less than in 1999.

Sanders said of Obama: "He's not a fighter and the Republicans have gotten that clue".

At root, Obama is facing an opposition party determined to slash government spending, debt and government involvement in the lives of Americans.

Republicans are relentlessly trying, so far with no success, to block full implementation of Obama's health care overhaul pushed through Congress when Democrats still controlled both chambers of Congress.

Spending cuts

Republicans are also looking to cut spending on government programs that guarantee medical care and income support for the poor and disabled while carving away spending on other programs.

And there's a huge war over taxes. Obama wants the wealthy to pay more to help keep government programs in place while cutting the debt. Republicans insist that would cause entrepreneurs to retrench on business expansion and hiring, making things worse.

Therefore, Republicans argue, the only prudent course for deficit reduction is massive spending cuts, not higher taxes. Some insist Congress should refuse to fund Obama's health care law.

And that brings the debate back to the coming 30 September budget deadline, the end of the government budget year. Many of the hard-liners on spending and taxes in the Republican Party threaten, if Obama does not capitulate on spending, to let the government shut down for lack of funds on 1 October.

And they are just as determined not to allow an increase in government borrowing that is likely to be necessary by about 1 November. Until the Obama presidency, Congress had routinely raised the borrowing limit in both Republican and Democratic administrations.

Failure to do that, as nearly happened in 2011, would leave the government unable to pay its bills. Three years ago just the threat of that happening caused a major bond rating agency to lower its assessment of US creditworthiness for the first time.

Obama, in his speech at Knox College, derided Republican attempts to bottle up his agenda by deflecting attention to a series of political storms that have dominated headlines throughout the start of his second term.

"An endless parade of distractions and political posturing and phony scandals can't get in the way of what we need to do. And I'm here to say it's got to stop," the president said. And he's repeated with greater frequency threats to veto any Republican attempts to cut more deeply into domestic spending.

There's little evidence, however, that opposition forces are ready for a ceasefire. Both sides are digging in deeply for what's likely to be a bloody political autumn.

- AP


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