* Obama budget defers significant action on deficit
* Now not the time for austerity - White House's Lew
By Alister Bull
Washington, Feb 12 President Barack
Obama's chief of staff, Jacob Lew, defended his boss on Sunday
for failing to cut the U.S. budget deficit, making the
election-year argument that now was the wrong time to impose
austerity measures that could sap an economic recovery.
Republicans have slammed Democrat Obama for laying out a
budget plan that raises taxes on the rich, which they view as
designed to help his campaign for re-election on Nov. 6, rather
than controlling the growth of the U.S. deficit and debt.
But Lew, speaking on Sunday television news shows on the eve
of Obama's 2013 budget proposal to Congress, said the plan would
outline $4 trillion in 10 year deficit reductions, alongside
measures to deliver essential suport to near-term growth.
"I think there is pretty broad agreement that the time for
austerity is not today," Lew, Obama's budget chief until few
weeks ago, told NBC's "Meet the Press".
This was also why Congress ought to pass a payroll tax cut
extension before it expires in two weeks' time, he said.
Obama's budget will request over $800 billion in multi-year
spending for job creation and infrastructure programs, including
tax breaks for companies and individuals worth more than $300
billion in 2012 if passed into law.
Congress is free to ignore the president's proposals and
Republicans have said Obama's budget will be dead on arrival.
"Jack Lew did the full tour of all five Sunday shows this
morning, failing on each show to articulate how their upcoming
budget would lift the crushing burden of debt," said Gerrit
Lansing, spokesman for House of Representatives Budget Committee
Chairman Paul Ryan, a Republican.
The budget, which will delivered to Congress on Monday,
projects the deficit at $1.33 trillion this fiscal year or 8.5
percent of gross domestic product, declining to $901 billion, or
5.5 percent of GDP, in 2013.
Obama pledged in 2009 to have halved the deficit by next
year, and his failure to deliver has provided Republicans with
ammunition as they seek to deny him a second term by portraying
him as old style tax and spend liberal.
"On this issue - the debt - this president has been
completely AWOL. Republicans have had to fight tooth and nail
for every dime in savings we've secured," Mitch McConnell, the
top Republican in the U.S. Senate, said on Thursday.
Lew, however, argued that Obama's deficit promise was made
before he truly understood the depth of the recession he had
inherited from Republican President George W. Bush.
"When we took office, the economy was falling so fast that
the first thing we had to do was put a bottom in ... It cost
money in terms of lost revenue and slower economic growth. We're
on track now," Lew told ABC News.
The White House said the funding gap will shrink to 2.8
percent of GDP by 2018, below the 3 percent/GDP threshold that
credit rating agencies and investors see as the goal to
stabilize the growth in national debt as a share of the economy.
Lew said Congress and the administration are working to see
if a compromise can be reached over extending the payroll tax
cut for 160 million Americans, which will expire on Feb. 29
unless Congress acts.
"They have two weeks now to do the important business so
they don't get in the way of our economic recovery," he told
NBC. The White House estimates extending the payroll tax cut for
all of 2012 could add a percentage point to growth this year.