On Sunday, the job of making the argument for job-creation measures now and budget austerity later fell to Jacob J. Lew, Mr. Obama’s chief of staff and until recently his budget director, who made the rounds of five television talk shows.
“There’s pretty broad agreement that the time for austerity is not today. We need to go on a path where, over the next several years, we bring our deficit under control,” Mr. Lew said on the NBC program “Meet the Press.” “Right now we have a recovery that’s taking root, and if we were to put in austerity measures right now, it would take the economy in the wrong way.”
“The challenge,” Mr. Lew added, “is how do you do two things at the same time? How do you put money forward for things like the payroll tax holiday, for things like getting a jump-start on infrastructure, for building schools, and make the decisions for long-term deficit reduction? The president has proposed a plan that would do that.”
That combination — temporary, immediate stimulus measures, together with spending cuts and tax increases that would take effect only after 2012, when the economy presumably is stronger — is one that many economists and business leaders endorse. But as Mr. Obama starts his fourth year in office, explaining the two-track approach continues to test him and his administration.
In his budget Mr. Obama again will commit to $4 trillion in deficit reduction over 10 years, including $1.5 trillion in tax revenue from the wealthy and from closing some corporate tax breaks, and reductions in spending for a range of programs, including the military, Medicare, farm subsidies and federal pensions. But Republicans are sure to criticize the president’s proposals as heavy on gimmickry and double-counting, and reject his proposed tax increases.
For all the debate over deficits, Mr. Obama on Monday will highlight spending increases and tax cuts that he seeks, which are popular despite their impact on the federal debt.
He will start the year’s debate by releasing his budget plan outside Washington at Northern Virginia Community College, part of a statewide coalition of community colleges and employers that was among the first winners in September of federal grants to ensure that students are learning skills that businesses need. In his budget, Mr. Obama proposes to make that initiative an $8 billion multiyear effort.
The initiative is one of many — both temporary measures and programs intended to be permanent — that serve as a statement of Mr. Obama’s priorities in promoting government investment in infrastructure, manufacturing, education and job training, and innovation, even as he calls for considerable deficit reduction to counter the nation’s mounting debt.
Presidents of both parties typically do much the same, going into great detail about the budget’s winners and leaving the losers vague or unspoken. What makes Mr. Obama’s effort stand out is the sheer size of the proposed deficit reduction as the nation emerges from the worst economic crisis since the Great Depression, a crisis that resulted in lower revenue for the Treasury and large doses of temporary spending and tax cuts to keep the economy from collapse.
In Congress, Democrats and Republicans continue to negotiate over a package that would extend a temporary two-percentage-point cut in workers’ payroll taxes through this year, along with unemployment compensation for those out of work for more than six months and a delay in a scheduled deep reduction in Medicare reimbursements to doctors.
“I do believe this will be extended,” Representative Paul D. Ryan, the Republican chairman of the House Budget Committee, said on the ABC program “This Week.” The two sides are split over how to offset the cost of the package, but lawmakers who worked over the weekend reported making progress.
The Obama budget request for fiscal year 2013, which begins Oct. 1, reflects the White House agreement with Congress last August to cut nearly $1 trillion over 10 years from annual discretionary spending, which covers most government programs but not the entitlement programs like Medicare, Medicaid and Social Security, whose costs, especially for the health programs, are driving the long-term projections of unsustainable debt.
In a summary of the budget released on Friday, the administration said “difficult trade-offs had to be made” to comply with the reduced levels of discretionary spending and still provide increases for the president’s priorities. But it did not disclose who got cut, only what was increased or newly created.
Congress is not likely to accept much of Mr. Obama’s budget, given Republicans’ opposition. Its value is more as a political document as he fights for re-election, contrasting his approach to the other party’s.
Mr. Obama will propose spending $476 billion over six years for transportation projects. Because federal fuel taxes will not cover the cost, he proposes to offset about half the cost with savings projected over 10 years from ending the Iraq and Afghanistan wars. Republicans and some budget groups call that a gimmick, saying much of the money would not be spent anyway.
On “Fox News Sunday,” Mr. Lew countered, “I think that if we don’t lower the caps that permit that spending, there will be a natural process of seeing military spending grow.” He added, “I guarantee you that if we don’t take the action that’s been proposed, there will be leakage, and that money will end up being spent.”
Mr. Obama will propose $141 billion in spending for research and development over all, increasing nondefense research by 5 percent above the current level and maintaining his commitment to double the budgets of three federal research agencies.
Among new initiatives, Mr. Obama seeks a $5 billion competitive program to encourage states, school districts and teachers’ unions to coordinate in attracting and training more teachers, a new one-year tax credit for small businesses that increase their payroll, and tax incentives for manufacturers that bring jobs back from overseas or invest in depressed communities.
www.nytimes.com
Greek MPs have approved a controversial package of austerity measures, demanded by the eurozone and IMF in return for a 130bn euro ($170bn; £110bn) bailout.
The vote was carried by 199 in favour to 74 against.
Coalition parties expelled more than 40 deputies for failing to back the bill.
Tens of thousands protested in Athens, where there were widespread clashes and buildings were set on fire. Violent protests were reported in cities across the country.
Protesters outside parliament threw stones and petrol bombs, and police responded with tear gas. Scores of police and protesters were injured.
Prime Minister Lucas Papademos urged calm, insisting that the austerity package would "set the foundations for the reform and recovery of the economy".
"Vandalism, violence and destruction have no place in a democratic country and won't be tolerated," he said in a speech in parliament before the vote.
The bill passed parliament easily as the two largest parties in the coalition - Pasok and New Democracy - account for more than two-thirds of the deputies.
The austerity measures include:
Eurozone ministers must now ratify the measures at a meeting in Brussels on Wednesday before bailout funds can be released.
The ministers rejected proposals put forward by the Greeks last week, which they said fell 325m euros short of the cuts needed.
The BBC's Mark Lowen in Athens says the public are increasingly angry with the austerity measures and feel that the impact is beyond the value of the bailout.
At least 80,000 people were reported to have joined demonstrations in Athens, with another 20,000 protesting in Thessaloniki.
Running battles with police continued in the capital until late on Sunday, although no new clashes were reported after the vote.
Protesters hurled flares and chunks of marble torn up from the square. Some had tried to break through a cordon of riot police around the parliament.
Several historic buildings, including cafes and cinemas, were set alight.
Ioannis Simantiras, 34, said the protesters were boxed in by police.
"Nobody could get away from the gas," he told the BBC.
"When it engulfed everybody, and everybody was choking the police drew back and opened up a corridor for us away from the parliament - that's when everybody made a run for it."
Violent protests also spread to other Greek towns and cities, including the islands of Corfu and Crete, according to state TV.
Finance Minister Evangelos Venizelos said the question was not "whether some salaries and pensions will be curtailed, but whether we will be able to pay even these reduced wages and pensions".
"When you have to choose between bad and worse, you will pick what is bad to avoid what is worse," he said.
Greece needs the bailout the make its next repayment on its huge sovereign debt.
If it cannot make the payment, it will default and in effect become bankrupt.
Analysts say such a "chaotic default" could endanger Europe's financial stability and possibly even leading to a break-up of the eurozone.
As part of the deal with international lenders, Greece will also be able to write off 100bn euros of privately held debt.
Earlier this week several ministers from the coalition government, including two from Pasok, quit in protest at the measures.
The leader of the far-right Laos party, the junior coalition member, announced his 15 deputies would not back the austerity measures.
George Karatzaferis complained that the measures amounted to Greeks being "humiliated" by Germany.
The eurozone bloc has demanded "strong political assurances" that the packages will be implemented regardless of which party wins a general election due in April.
http://www.bbc.co.uk
Sony Electronics, the U.S. arm of the Japanese consumer products company, has cut around 100 workers from its ranks over the past several weeks.
