Obama Faces Doubts With Respect to the Stimulus Plan

WASHINGTON (AP). — President Barack Obama wishes to cut the fiscal deficit in half by the time he finishes his first term in the White House, which would include reducing the costs of the war in Iraq, increasing taxes for those in the highest economic bracket and rationalizing federal bureaucracy, said one official of the current administration.

Obama’s proposal for the 2010 fiscal year, which begins the 1st of October, projects that the inherited deficit from the George W. Bush administration, approximately 1.3 trillion dollars, will be reduced to 533 billion dollars by 2013. “We can not generate sustainable growth if we do not control the [fiscal] deficit,” stated Obama on Saturday in his weekly radio and internet speech.

However, a cut in the budget will surely generate protests among liberal Democrats, depending upon whether the government invests heavily in social programs. And if he is not successful in his plan to reduce the deficit, it could cost him dearly in the 2012 presidential election.

Governors and other Republican officials have also expressed their doubts with respect to the efficacy of Obama’s proposals.

Analysts have said that if in general it is difficult to cut the deficit in half in four years, to do so in a period marked by a declining economy worsens the prospect of doing so.

It is anticipated that Obama will offer a summary today of his budget proposal in a meeting on the fiscal policy in the White House. He may also tackle the matter tomorrow night when he addresses Congress for the first time.

It is believed that the president will deliver an outline of his budget proposal to Congress on Thursday, hardly a week after the promulgation of his economic stimulus plan of 787 billion dollars.

In the budget proposal, Obama will also adopt steps to accomplish his promises during the campaign to establish universal health care and to reduce the dependence on foreign oil.

One official, who spoke yesterday under the condition that he is not identified, said that Obama hopes to concretize the fiscal deficit reduction by generating savings in three sectors.

Obama has promised to remove the majority of the troops in Iraq in the time frame of 16 months after assuming office.

He has also stated that in 2011 he will end tax cuts for individuals who earn more than $250,000 a year. This measure was promoted by Bush.

He also promised to improve the efficiency of the government and to reduce its costs by eliminating programs that do not work.

Obama’s stimulus plan is going to create jobs, but at the same time it hopes to stop the increasing national debt.

The Congressional Budget Office has stated that estimated deficit for this year will rise to at least 1.2 trillion dollars, more than twice that of last year (undisclosed economists speak of 1.6 trillion dollars). The figure includes financial recoveries and the recovery plan that Congress passed since October 1st, but not the substantial stimulus package that Obama has already authorized.