News / Economy

New Fiscal Threat as Obama Addresses Nation

New Fiscal Threat as President Obama Addresses Nationi
X
February 11, 2013 7:40 PM
As President Barack Obama prepares to deliver his annual State of the Union address, the US is facing several economic challenges. Despite signs of recovery, economic growth remains sluggish, government debt continues to rise, and millions of Americans are struggling to find jobs. Mil Arcega looks at the economic hurdles in the president's second term.
New Fiscal Threat as President Obama Addresses Nation
As President Barack Obama prepares to deliver his annual State of the Union address, the US is facing several economic challenges. Despite signs of recovery, economic growth remains sluggish, government debt continues to rise, and millions of Americans are struggling to find jobs.  

President Obama faces a far different economy than the one he inherited four years ago.

Although unemployment remains high, budget expert Stan Collender says the economy is gaining momentum..

"The housing market is different, the financial market, the stock market is double what it was when he took office, basically," Collender said.

While the risk of economic collapse is no longer the issue, analysts say the threat of fiscal breakdown is.

Despite averting a large tax hike for middle class Americans, Congress has only delayed the sequester - deep spending cuts mandated to force both parties to negotiate a deficit cutting deal.

Author and fiscal expert Charles Konigsberg says it's a terrible way to run a government.

"On March 1st, automatic budget cuts go into effect.  They would cut both defense and non-defense programs by more than 5 percent, which could have a major impact on unemployment and on economic growth," Konigsberg said.

With no deal in sight, the president wants Congress to extend the deadline, again.

"If they can't get a bigger package done by the time the sequester is scheduled to go into effect, then I believe they should at least pass a smaller package of spending cuts and tax reforms that would delay the economically damaging effects of the sequester," Obama said.

The Congressional Budget Office says the automatic spending cuts would reduce the annual deficit. But they also would cut economic growth in half - and cost about one and a half million jobs.

House Speaker John Boehner, a Republican, expressed frustration over the stalemate.

"At some point, Washington has to deal with its spending problem. I've watched them kick this can down the road for the 22 years that I've been here.  I've had enough of it.  It's time to act," Boehner said.

With U.S. debt exceeding $16 trillion, both parties agree spending cuts are necessary.  But economists say the cuts must be gradual. The economy shrank in the fourth quarter for the first time in three years -- the result, says Stan Collender, of a 22 percent cut in military spending.

"It's interesting because, after four years of Republicans talking about how spending cuts were going to spur economic growth, we now know for sure that just the opposite is true," Collender said.

Charles Konigsberg has worked in both Republican and Democratic administrations. He says how the president speaks to Republicans on Tuesday may be just as important as what he says.

"It's essential to bridge the gulf between the two parties -- and the only political figure who can do that is the president," Konigsberg

A nagging question is -- how much political capital is the president willing to expend to bridge a political divide that analysts say is, for now, the biggest drag on the world's largest economy.

You May Like

Missouri Town Braces for Possible Racial Unrest

Situation in Ferguson hinges on whether white police officer will be indicted for August shooting death of unarmed black teen More

Video Ukraine Marks Anniversary of 1930s Deadly Famine

President Poroshenko compares Soviet-era ‘genocide’ to current tactics of pro-Russia rebels in Ukraine's east More

S. Philippines Convictions Elusive 5 Years After Election-related Killings

Officials vowed to deliver justice as the nation marked the anniversary of the country's worst political massacre that left 58 dead, more than half media More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
New Skateboard Defies Gravityi
X
November 21, 2014 5:07 AM
A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Gay Evangelicals Argue That Bible Does Not Condemn Homosexuality

More than 30 U.S. states now recognize same-sex marriages, and an increasing number of mainline American churches are blessing them. But evangelical church members- which account for around 30 percent of the U.S. adult population - believe the Bible unequivocally condemns homosexuality. VOA's Jerome Socolovsky reports that gay, lesbian, bisexual and transgender evangelicals are coming out. Backed by a prominent evangelical scholar, they argue that the traditional reading of the bible is wrong.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Mexico Protests Escalate Over Disappearances

Protests in Mexico over 43 students missing since September continue to escalate, reflecting growing anger among Mexicans about a political system they view as corrupt, and increasingly tainted by the drug trade. Mounting outrage over the disappearances is now focused on the government of President Enrique Pena Nieto, accused of not doing enough to end insecurity in the country. More from VOA's Victoria Macchi.
Video

Video US Senate Votes Down Controversial Oil Pipeline - For Now

The U.S. Senate has rejected construction of a controversial pipeline to transport Canadian oil to American refineries. The $5 billion project still could be approved next year, but it faces a possible veto by President Barack Obama. As VOA’s Michael Bowman reports, the pipeline has exposed deep divisions in Congress about America’s energy future.
Video

Video Can Minsk Cease-fire Agreement Hold?

Growing tensions between government troops and separatists in eastern Ukraine further threaten a cease-fire agreement reached two months ago in the Belarusian capital of Minsk. Critics of U.S. policy in Ukraine say it is time the Obama administration gives up on that much-violated cease-fire and moves toward a new deal with Russia. VOA's Scott Stearns has more.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.
Video

Video Ferguson Church Grapples with Race Relations

Many white residents of Ferguson, Missouri, say they chose to live there because of the American Midwest community's diversity. So, they were shocked when a white police officer killed an unarmed black teenager in August – and shaken by the resulting protests and violence. Some local churches are leading conversations on how to go forward. VOA’s Ayesha Tanzeem reports.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8050
JPY
USD
117.90
GBP
USD
0.6376
CAD
USD
1.1259
INR
USD
61.655

Rates may not be current.