'Don't let political dysfunction effect economic progress'
Washington: Arguing that the country's economy is poised for progress in 2013, the US President Barack Obama has asked the Congress not to let "political dysfunction" affect this.
"Our economy right now is headed in the right direction and it will stay that way as long as there aren't any more self-inflicted wounds coming out of Washington. So let's keep on chipping away at this problem together, as Democrats and Republicans, to give our workers and our businesses the support that they need to thrive in the weeks and months ahead," Obama told White House reporters yesterday.
During his address, Obama asked the Congress to approve legislation to replace at least some amount of the USD 85 billion in automatic spending cuts set to hit the government on March 1.
"For all the drama and disagreements that we've had over the past few years, Democrats and Republicans have still been able to come together and cut the deficit by more than USD2.5 trillion through a mix of spending cuts and higher rates on taxes for the wealthy," he said.
"A balanced approach has achieved more than USD2.5 trillion in deficit reduction. That's more than halfway towards the USD4 trillion in deficit reduction that economists and elected officials from both parties believe is required to stabilise our debt. So we've made progress. And I still believe that we can finish the job with a balanced mix of spending cuts and more tax reform," he said.
The US President said in order to achieve the full USD4 trillion in deficit reductions, which is the stated goal of economists and the elected leaders, the modest reforms in the social insurance programs have to go hand-in-hand with a process of tax reform, so that the wealthiest individuals and corporations can't take advantage of loopholes and deductions that aren't available to most Americans.
"Leaders in both parties have already identified the need to get rid of these loopholes and deductions. There's no reason why we should keep them at a time when we're trying to cut down on our deficit. And if we are going to close these loopholes, then there's no reason we should use the savings that we obtain and turn around and spend that on new tax breaks for the wealthiest or for corporations.
"If we're serious about paying down the deficit, the savings we achieve from tax reform should be used to pay down the deficit, and potentially to make our businesses more competitive," he argued.