By Nick Mann | 4 February 2013
The US needs a balanced approach to reducing its deficit, with cuts to unnecessary spending and the end of tax loopholes for the wealthy, President Barack Obama has said.
In his weekly address on Saturday, Obama said that while it was critical to reduce spending, the US couldn’t ‘cut its way to prosperity’.
He added: ‘It hasn’t worked in the past, and it won’t work today. It could slow down our recovery. It could weaken our economy. And it could cost us jobs – now, and in the future.’
Obama said last week’s figures showing the US economy unexpectedly shrank by 0.1% in the final three months of 2012 were a reminder that ‘bad decisions’ in Washington could get in the way of economic progress.
In light of this, it was important that imminent decisions on how to reduce the US debt and deficit were taken in a way that grew the economy and created jobs, he explained.
Political discussions over the next few weeks will attempt to address the package of automatic spending cuts, known as sequestration, that is due to take effect on March 1. A long-term rise in the US borrowing limit also has to be agreed. Last week, Senate approved a temporary increase in the debt ceiling, which – when passed into law by the president – will give three months breathing space.
Obama described the $2.5 trillion deficit reduction already agreed by Republicans and Democrats as a ‘good start’ to reducing the US debt. ‘But to get the rest of the way, we need a balanced set of reforms,’ he said.
The US needs ‘an approach that says let’s cut what we can’t afford but let’s make the investments we can’t afford to live without’, he explained. ‘Investments in education and infrastructure, research and development – the things that will help America compete for the best jobs and new industries.’
He added: ‘2013 can be a year of solid growth, more jobs and higher wages. But that will only happen if we put a stop to self-inflicted wounds in Washington. Everyone in Washington needs to focus not on politics but on what’s right for the country; on what’s right for you and your families.’
