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

Ebola Death Toll Nears 5,000 as Virus Advances

West Africa bears heaviest burden; Mali toddler’s death raises new fears More

Jordan’s Battle With Islamic State Militants Carries Domestic Risks

Despite Western concerns that IS militants are preparing a Jordanian offensive, analysts call the kingdom's solid intel a strong deterrent More

Asian-Americans Assume Office in Record Numbers

Steadily deepening engagement in local politics pays off for politicians like Chinese-American Judy Chu More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video Comanche Chief Quanah Parker’s Century-Old House Falling Apart

One of the most fascinating people in U.S. history was Quanah Parker, the last chief of the American Indian tribe, the Comanche. He was the son of a Comanche warrior and a white woman who had been captured by the Indians. Parker was a fierce warrior until 1875 when he led his people to Fort Sill, Oklahoma, and took on a new, peaceful life. As VOA’s Greg Flakus reports from Cache, Oklahoma, Quanah’s image remains strong among his people, but part of his heritage is in danger of disappearing.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid

World Currencies

EUR
USD
0.7893
JPY
USD
107.68
GBP
USD
0.6238
CAD
USD
1.1214
INR
USD
61.185

Rates may not be current.