Obama calls for balanced mix of spending cuts and tax reforms
Washington: The US President Barack Obama on Saturday asked the Congress to act to avoid a series of harmful and automatic spending cuts, called sequester, by finding a balanced mix of cuts and tax reforms.
“Right now, if Congress doesn’t act by March 1st, a series of harmful, automatic cuts to job-creating investments and defence spending — also known as sequester — are scheduled to take effect.
“And the result could be a huge blow to middle-class families and our economy as a whole,” Obama said in his weekly address to the nation.
Noting that over the last few years, Democrats and Republicans have come together and cut deficit by more than USD 2.5 trillion through a balanced mix of spending cuts and higher tax rates for the wealthiest Americans, Obama said that’s more than halfway towards the USD 4 trillion in deficit reduction that economists and elected officials from both parties say they need to stabilise the debt.
“I believe we can finish the job the same way we’ve started it — with a balanced mix of more spending cuts and more tax reform. And the overwhelming majority of the American people agree — both Democrats and Republicans,” he said.
Obama said his preference — and the preference of many Members of Congress — is to do that in a balanced, comprehensive way, by making sensible changes to entitlement programmes and reforming tax code.
According to Obama, if the sequester is allowed to go forward, it would have devastating impact on the US economy including the military readiness.
“Already, the threat of deep cuts has forced the Navy to delay an aircraft carrier that was supposed to deploy to the Persian Gulf. As our military leaders have made clear, changes like this affect our ability to respond to threats in an unstable part of the world. And we will be forced to make even more tough decisions in the weeks ahead if Congress fails to act,” he said.
Obama further said: “Over the last few years, we’ve made good progress towards reducing our deficit in a balanced way. There’s no reason we can’t keep chipping away at this problem”.
“And there’s certainly no reason that middle-class families and small businesses should suffer just because Washington couldn’t come together and eliminate a few special interest tax loopholes, or government programmes that just don’t work.”
He said that at a time when economists and business leaders from across the spectrum have said that our economy is poised for progress, “we shouldn’t allow self-inflicted wounds to put that progress in jeopardy”.