Obama speech to focus on economy

News

Americas

Wednesday, 27 January 2010 10:26

By Agencies

Share Link:

The US president's State of the Union address is set to focus on the economy, with the announcement of a spending freeze in certain areas of the US budget, according to the White House.

Barack Obama is set to deliver his biggest set-piece speech for the year in the House of Representatives in Washington DC at 9pm local time (02:00 GMT).

It comes at a time, one year into Obama's presidency, when unemployment in the US is at 10 per cent and a the government deficit has run to about $1.4 trillion.

"In this speech, what he'll discuss more than anything is getting our economy moving again," Robert Gibbs, the White House spokesman, said.

Obama is expected to promise a three-year freeze on non-discretionary spending in an effort to reign in the government's debt.

Disputed proposal

That has led to speculation that the president may be moving closer to the middle ground of American politics.

"It's a centrist strategy going forward," Manu Raju of the Politico.com website, said.

But aides have also signalled that Obama will make clear he has not lowered his sights and is determined to enact planned reforms, including his signature health care initiative, now in limbo in congress.

Ahead of his speech Obama has appeared on local television, saying: "The one thing I'm clear about is that I'd rather be a really good one-term president than a mediocre two-term president."

There is no guarantee that congress will agree to a spending freeze, an idea that Obama initially rejected when it was proposed by John McCain, his then Republican rival, in the 2008 election campaign.

The proposal has been met with derision by both Democrats and Republicans.

Democrats argue a freeze would hurt the economic recovery, while Republicans dismiss the move as window-dressing after what they call an "unprecedented spending binge" by the Obama White House.

Reform moves

According to the administration, the proposed freeze would exclude Defence, Veterans Affairs, Homeland Security and as well as entitlement programmes such as Medicare and Medicaid and Social Security, which make up the biggest and fastest-growing part of the federal budget.

White House budget officials estimate it could amount to savings of $250bn over 10 years.

But that would be less than 3 per cent of the roughly $9 trillion in additional deficits the government is expected to accumulate over that time.

In his speech, Obama is also likely to touch on other initiatives including immigration reform, cap-and-trade global warming legislation, wide-ranging education reform and regulatory rules to halt risky business practices on Wall Street.

Also expected is a promise to improve national security in regard to bio-attacks, tax breaks that could ease the way to college or retirement for Americans and a framework for the US role in rebuilding earthquake-hit Haiti.