Obama calls for "shared responsibility" for U.S. deficit reduction

10:40, April 20, 2011      

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U.S. President Barack Obama on Tuesday called for "shared responsibility" of the nation to reduce the budget deficits, and touted the importance of the White House debt reduction plan for the prosperity of the country.

The American people and government must live within their means and improve the nation's competitiveness through effective investments in infrastructure, clean energy and other key sectors, Obama said when giving an address at Northern Virginia Community College, his first stop this week as the president is hitting the road to different cities in a bid to deliver the message that a combination of spending cuts and tax hikes on the rich is necessary to reduce the nation's spiking debt.

Obama argued that millionaires and billionaires should also make sacrifices in the process, and the White House long-term spending reduction plan released last week could help cut the deficit and secure economic prosperity for the country.

The White House on April 13 announced its long-term public debt reduction plan, setting a goal to cut 4 trillion U.S. dollars over the next 12 years, following a massive 6.2-trillion-dollar plan from the Republicans.

Obama said his administration would endeavor to achieve budget balance through ways including savings on the defense budget, elimination of waste in healthcare spending, control of domestic expenditures and higher taxes for the wealthy Americans.

He asserted that Washington acted like deficits did not matter for a long time, but the Republican debt reduction plan asked too much from the poor and middle-class families.

The world's largest economy is going to reach the current debt limit of 14.3 trillion dollars no later than May 16 this year. Defaulting on legal obligations of the nation would trigger a financial crisis potentially more severe than the crisis from which the nation is only now starting to recover, Treasury Secretary Timothy Geithner said on April 4 in a letter to Congress, depicting a gloomy picture of the public debt situation.

However, after the global rating firm Standard and Poor's lowered its outlook on the United States rating to "Negative" from "Stable" on Monday, Geithner on Tuesday rebuffed the warning and reassured investors that the White House and the GOP could reach a deal on fiscal consolidation.

Both parties had the consensus of putting the nation's deficit on a "downward path," but had disagreement on how to achieve that goal, Geithner said on Tuesday in an interview with CNBC.

Geithner held that President Obama and the leadership of Congress all recognized the importance of debt reduction and it was "within our capacity" to overcome the daunting challenge without hurting the middle class and senior people.

Many economists believed that the two parties had disputes on the ways of reining in soaring debt, and that the partisan battle over the government budget for the 2012 fiscal year as well as the public debt ceiling would continue.

Source: Xinhua
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