Tags: Obama | Cut | Deficit | Warns | Growth

Obama Vows to Cut US Deficit But Warns on Growth

Monday, 29 Nov 2010 02:49 PM

U.S. President Barack Obama Monday vowed to curb federal spending and reduce the $1.3 trillion budget deficit but warned against an abrupt fiscal tightening that would put the economic recovery at risk.

"We can't afford to take any steps that might derail our recovery," Obama said at an event to announce a freeze in federal pay.

The freeze would save $2 billion in the current 2011 fiscal year, $28 billion over the next five years, and more than $60 billion over 10 years, according to the White House. It would apply only to civilian workers and require Congressional approval.

The move is part of an effort by Obama to push back against opposition Republicans, who have labeled the president and his Democrats as big spenders while taking aim at his policies such as an $814 billion stimulus package and healthcare reform.

"Just as families and businesses around the nations are tightening their belts in this economy, so must the government," said White House spokesman Dan Pfeiffer.

Fresh from big victories in congressional elections earlier this month, Republicans have vowed to cut domestic spending and have talked of freezing the pay of government workers.

Republicans have tried to put Obama on the defensive about the budget deficit, which hit $1.3 trillion in the fiscal year that ended in September.

Obama, who took office in January last year, has countered that the deficit is a legacy of the policies of President George W. Bush's administration.

The election defeats for Democrats were widely seen as a rebuke to Obama and many analysts have been expecting him to focus on a message of deficit reduction as part of a move to court independent voters.

A special commission named by Obama to come up with long-term recommendations on reducing the budget deficit is due to deliver its report on Wednesday.

The White House also said that President Obama will meet Wal-Mart Stores chief executive Mike Duke on Monday as part of ongoing outreach efforts toward the business community.

The Oval Office meeting will "continue discussing ways to strengthen our economic recovery, spur growth, create jobs, and encourage companies to invest," a White House official said.

A Wal-Mart spokesman said the meeting was private and declined to provide further details.

One topic Wal-Mart might be keen to push with the president is India, where the retail giant wants to expand in a market that has been largely closed to foreign firms.

Obama paid a high-profile state visit to India earlier this month with the specific aim of boosting U.S. exports to the fast-growing nation in order to lift hiring back home.

© 2017 Thomson/Reuters. All rights reserved.

   
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U.S. President Barack Obama Monday vowed to curb federal spending and reduce the $1.3 trillion budget deficit but warned against an abrupt fiscal tightening that would put the economic recovery at risk. We can't afford to take any steps that might derail our recovery, ...
Obama,Cut,Deficit,Warns,Growth
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2010-49-29
Monday, 29 Nov 2010 02:49 PM
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