Obama says U.S. deficit could jeopardise recovery

By Ross Colvin

WASHINGTON, Jan 30 (BestGrowthStock) – U.S. President Barack Obama
renewed his pledge on Saturday to make job creation his top
priority in 2010 but said it was also critical to rein in a
record budget deficit that threatened economic recovery.

Obama used his weekly radio and Internet address to remind
Americans of the various proposals he put forward in the last
week to spur job growth and tame a $1.4 trillion deficit.

The White House has said Obama is still committed to a
promise he made last year to halve the deficit by the end of
his term in 2013.

But in his radio address on Saturday, he talked only of
“reining” in the deficit.

Obama is due on Monday to unveil his proposed budget for
fiscal 2011 that begins Oct. 1, and has said it will include a
three-year spending freeze on some domestic programs.

A Pew Research Center study published this week showed 60
percent of those polled viewed reducing the budget deficit as a
top priority for 2010, up from 53 percent in 2009.

Obama acknowledged these concerns in his address.

“As we work to create jobs, it is critical that we rein in
the budget deficits we’ve been accumulating for far too long —
deficits that won’t just burden our children and grandchildren,
but could damage our markets, drive up our interest rates, and
jeopardize our recovery right now,” he said.

The size of the deficit is a political hot potato in an
election year, with Republicans seeking to paint Obama as a big
spender and the White House countering that the president
inherited a $1.3 trillion deficit when he took office.

Democrats face a tough time in holding on to their
majorities in both the Senate and the House of Representatives
in the mid-term congressional elections in November. High
unemployment, now at 10 percent, and the size of the deficit
could hurt them, analysts say.

Obama noted that new data released on Friday showing the
economy grew at a 5.7 percent rate in the fourth quarter,
calling it a sign of progress and evidence that his policies to
stimulate the economy were working.

“But when so many people are still struggling — when one
in 10 Americans still can’t find work, and millions more are
working harder and longer for less — our mission isn’t just to
grow the economy,” he said.

That was why he had proposed tax credits to help small
businesses hire new workers and invest in new equipment, as
well as the elimination of all capital gains taxes on small
business investment, he said.
(Editing by Philip Barbara)

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Obama says U.S. deficit could jeopardise recovery