Democrats ‘agree’ on Obama budget

Media reports have said the US government could owe $1.4 trillion by next year.

Obama’s congressional visit comes a day after he urged patience over his plans to boost the country’s ailing economy.

“We will recover from this recession. But it will take time, it will take patience,” Obama told a news conference in Washington on Tuesday.

Joe Biden, the US vice-president, said on Wednesday that he was “confident” the budget would be passed by the Democrat-controlled congress, in a vote likely to be held first in the senate next week.

Since taking office in January, Obama has introduced an economic stimulus package, announced the proposed budget and pumped hundreds of billions of dollars into US financial markets.

The move comes as economic data released on Wednesday showed that new home sales had risen unexpectedly, with the US commerce department saying sales rose 4.7 per cent in February to 337,000 from a revised January figure of 322,000.

However, January’s sales results remained the worst on records dating back to 1963.

‘Overreach’ claims

In depth

Democrats in the House of Representatives had proposed cutting down the 2010 budget proposal to $3.45 trillion amid concerns about growing US borrowing.

Politicians in both the House of Representatives and the senate have already been forced by worsening estimates of the massive deficit to scale down Obama’s requests for domestic programmes.

On Wednesday Peter Orszag, Obama’s budget director, praised Democrats for their proposals over the budget, saying documents offered by the house and senate budget panels would bolster education and clean-energy priorities while also providing for an overhaul of the healthcare system.

However, congressional Republicans – and some Democrats – say Obama has overreached and that the current budget and spending programmes could drive the country into unsustainable debt.

And also on Wednesday, Mirek Topolanek, Czech president of the European Union, condemned Obama’s plans to spend the way out of recession as “a road to hell”.

Topolanek said US plans to widen its deficit and impose protectionist trade
measures such as the “Buy America” provision showed the US “did not take the right path” economically.

‘Toxic debt’ plans

But Obama said on Tuesday at his news conference that his proposed budget would create jobs in the renewable energy sector, promote a highly skilled workforce and make healthcare affordable.

“The best way to bring our deficit down in the long run is … with a budget that leads to broad economic growth by moving from an era of borrow and spend to one where we save and invest,” he said.

“This is a big ocean liner. It’s not a speedboat. It doesn’t turn around immediately,” he said.

On Monday, the Obama administration announced its plans to buy up to $1 trillion of banks’ so-called toxic assets in a bid to get credit flowing again.

Tuesday’s news conference was the latest instalment in a media blitz that Obama has gone on to sell his policies, particularly on the economy, following appearances on a two high profile US television programmes in the past week.

He also plans to answer questions from the public in an online session on Thursday, “to get a snapshot of what Americans across the country care about”, according to a video message on the White House website.