With a Stick and a Hamburger

President Barack Obama introduced to Congress a draft budget for fiscal year 2012 that immediately provoked a storm of emotions among United States lawmakers and became the subject of heated verbal battles between Democrats and Republicans.

Although the occupant of the White House, vowing to “win America’s future,” decided to implement major reductions in domestic spending, he considers it necessary to invest billions of dollars in infrastructure, education and alternative energy technologies.

Along with increasing expenditures for these issues, Obama claims that he is still committed to his idea (which was articulated as early as his election campaign) of reducing the budget deficit by half by the end of his first term. Following this line, the U.S. administration has announced a draft budget, with $3.73 trillion on the expenditure side. Obama’s budget strategy, oriented toward state funds savings, is expected to save $1.1 trillion over 10 years. This will be achieved by, among other things, the freezing of domestic spending for five years (this will bring at least $400 billion), as well as higher taxes for wealthy Americans and energy companies.

In line with the vision to live within means, the budget proposed by the White House for fiscal year 2012 (which traditionally starts on October 1 in America) involves an expenditure reduction of 2.4 percent, compared with the current year. “By getting rid of 14,000 office buildings, lots and government-owned properties we no longer need, we can save taxpayers billions of dollars,” Obama said, during his speech in Baltimore.

According to the U.S. president, among the “hard decisions” he had to make was the reduction of a number of social programs, including support for disadvantaged sections of the population (in particular, $2.5 billion are proposed to be saved by cutting subsidies for utility payments).

The funding of the Pentagon turned out to be “sequestrated” as well. Thus, the White House asks Congress to allocate $728.4 billion to the Pentagon in the fiscal year 2012. This will be achieved by reducing spending on military operations overseas, from $160 billion to $118 billion. In total, it is proposed that $78 billion will be saved over the next five years by cutting the financing of the U.S. Defense Ministry. Nevertheless, even taking into account all possible cuts, the budget deficit this year will hit a record $1.65 trillion and will be the largest in U.S. history. However, according to forecasts of Obama’s team of economists, the deficit will start to decline as early as next year and will reach $1.1 trillion by 2012 and $768 billion by 2013.

Despite far-reaching plans to scale back a chronic shortage in the U.S. national budget, Republicans, who won a majority in the recent midterm Congressional elections, unanimously declared that the budget proposed by the president does not nearly meet their vision of the economic realities in America. “Elephants” sharply criticized Obama, not only for insufficient expenditure reduction, but also for “general lack of understanding of the need to reduce the role of the federal government in the economy.”

As a result, experts note that, not only will hard work be involved in Barack Obama’s attempt to establish fiscal discipline, but also there is a great risk of his losing the presidency in 2012. Before the budget for the fiscal year 2012 is approved by Congress, there is little doubt that Republicans, anxious at all costs to make Obama a president of one term, will do everything possible to thwart his ambitious economic agenda.