Obama calls for careful spending in State of the Union

Albuquerque Express Wednesday 26th January, 2011

US President Obama used his State of the Union address on Tuesday night to call for greater unity in the American government, as well as a renewed focus on investment in key areas such as education, transport, research and technology.

In a clear attempt to find a balance between objectives and realities, President Obama emphasised the need to cut down on spending in order to rein in a ballooning deficit, but also pointed out the importance of remaining competitive against major emerging economies such as China and India by investing wisely.

“If we make the hard choices now to rein in our deficits, we can make the investments we need to win the future,” said the US president.

He defended massive federal government spending during the last three years as necessary in “breaking the back” of the recession, with the US economy now poised for growth amid a notable recovery.

But, in a significant turnaround from 2009, the president vowed that he would veto any bill brought before him with ‘earmarks’, which are separate spending projects added to sometimes-unrelated bills by lawmakers in order to get support for pet projects. In 2009, the president had said he didn’t mind earmarks, as long as they were “done right”.

The Republican party attacked Obama for his proposals on spending on education, transport, technology and research, saying that he sought to continue a massive spending spree that had already increased the deficit by US $3 trillion.

Rep. Paul Ryan of Wisconsin, chairman of the House Budget Committee, in a prepared Republican response to President Obama, acknowledged that his presidency had begun amid a “severe fiscal and economic situation”, but said the debt problem was still the result of over-spending by the Obama administration.

“Instead of restoring the fundamentals of economic growth, he engaged in a stimulus spending spree that not only failed to deliver on its promise to create jobs but also plunged us even deeper into debt,” said Ryan, in a direct contradiction of Obama’s claim to have “broken the back” of the recession.

The United States economy is said to be in a recovery, but many remain frustrated by a stubbornly high unemployment rate, while the US public debt, set soon to eclipse the size of the entire economy, is an ongoing concern for many.

The Republicans want to enact a range of budget cuts. However even the most extreme proposals will make a minimal dent in the country’s deficit, which is buoyed by a significant drop in tax revenues.

The speeches of both sides were criticised by analysts for failing to contain substance, but this is a common feature of the State of the Union address, and the opposition’s response.

Rhetoric was used to call for careful spending on important programs, and it was used to re-focus attention on what Paul Ryan called a “fiscal crisis”.

Both sides presented their goals, but neither was able to say exactly how they’d get the country there.

Obama did not explain how the government would spend on important areas, while cutting the deficit at the same time, and the Republicans repeatedly mentioned budget and spending cuts, but did not say what cuts would be made.

The State of Union revealed the stark differences in the approach that the Democrats and Republicans will take to furthering the economic recovery.

The former want to invest in areas they see as essential to maintaining the country’s competitiveness, while the latter want to rein in spending and reduce the federal debt, which they see as essential to restoring investor confidence and therefore growth.