Obama push to seize budget initiative

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The White House said on Sunday it would this week propose radical reforms to public spending, an attempt to regain the initiative after a last-minute deal on Friday to avoid a federal government shutdown.

David Plouffe, a senior White House adviser, said Barack Obama, the president, would propose “significant debt reduction”, including looking at the federal Medicare and social security programmes, traditionally regarded as sacrosanct. “Every corner of the federal government has to be looked at,” Mr Plouffe said on Sunday, although he added that spending on investment and education would be protected whenever possible.

Congressional Republicans reacted with scorn to the announcement, saying Mr Obama had been dragged reluctantly into making the first round of cuts agreed on Friday, and was unlikely to have a clear plan for more. 

Eric Cantor, leader of the Republican majority in the House of Representatives, said it was his party that had taken the initiative. “I sit here and I listen to David Plouffe talk about their commitment to cut spending, and knowing full well that for the last two months, we’ve had to bring this president kicking and screaming to the table to cut spending,” he said.

Republicans have said they will use a forthcoming vote on raising the federal debt limit, without which the federal government will be prevented from further borrowing, to try to force further reform.

The deal struck between the White House and Congress late on Friday, after which both sides claimed victory, involved about $40bn of spending cuts in the current budget year ending in September.

Both Democrats and Republicans tried to make political capital out of the deal over the weekend. On Saturday, Mr Obama made a surprise visit to the Lincoln Memorial in Washington DC, telling tourists he had kept the memorial open with a bipartisan deal that prevented a shutdown in the federal government.

Meanwhile Paul Ryan, Republican chairman of the House budget committee, said on Sunday: “We represented one-third of the negotiators but we got two-thirds of the spending cuts we asked for.”

The White House and the Republicans also came to an uneasy compromise on the controversial issue of federal funding for abortion, with Mr Obama resisting calls to remove support for organisations such as Planned Parenthood, which also provide services such as HIV testing and cancer screening to women as well as abortion services.

A proposal by Mr Ryan would seek to rein in spending on Medicare, the federal healthcare system for retirees, by replacing open-ended provisions with a voucher system.

The Democrats say such a plan would end up with senior citizens being denied care, and that Mr Ryan’s plans for tax cuts rely on implausibly optimistic forecasts of economic growth and the tax revenues that would be generated.

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