Obama Vows Budget Cuts While US and UK Mull Stimulus Packages
President-elect Barack Obama vowed to cut waste in the federal budget that 'bleeds billions' in order to offset the costs of his stimulus package. Obama spoke to reporters in Chicago and introduced a new member of his economic team to be the director of the Congressional Budget Office.
Obama is promising an economic-stimulus package three times larger than one originally proposed while streamlining the government's own budget.
"If we are going to make the investments we need, we also have to be willing to shed the spending that we don’t need," he said.
President-elect Barack Obama, encouraged by congressional Democrats, will propose early next year an economic-stimulus package three times larger than one he was discussing only weeks ago, with the main focus on infrastructure, aides and lawmakers said.
The US government announced today that the stimulus package would get $800 billion, in addition to the $700 billion already promised. US treasury secretary Hank Paulson defended the changes, saying no one response was adequate by itself.
The stimulus package is a fresh lifeline to consumers and is in addition to the $700bn (£460bn) rescue plan enacted by the US Congress last month - the largest US government bail-out in history.
At a press conference, US treasury secretary Hank Paulson defended the changes, saying there was no one response adequate by itself to deal with "a once or twice-in-a-century financial crisis".
London also announced a huge stimulus package that will help reignite consumer spending and recover from an expected recession. The package is worth 20 billion pounds.
Britain has unveiled a major economic stimulus package worth 20 billion pounds to reignite consumer spending and help the nation recover from a deep and painful recession expected next year.
Chancellor of the Exchequer Alistair Darling said he would cut tax on goods and services and would fund the plan -- worth 23 billion euros or 30 billion dollars -- by borrowing more and raising income tax on the wealthy from 2011.
The United States and Europe prepared fresh measures on Tuesday to tackle a sharp economic downturn, which top miner BHP Billiton cited in abandoning a $66 billion bid for Rio Tinto.
While Canada isn't talking about a stimulus package just yet, Finance Minister Jim Flaherty may table the next federal budget earlier than expected. The government wouldn't be able to take action until the budget is tabled in March, stated Flaherty.
The Canadian economy is rapidly losing speed, and demands government action before the March budget is tabled, Flaherty said Monday.
He said any package could be included in a sooner-than-scheduled budget, although he did not give a specific date. His officials also suggested that announcing stimulus measures before the next budget is a possibility.
Despite an early bump as Markets digested the stimulus plans, the Canadian and American markets were both falling amid concern within the technology sector.
U.S. stocks also gave up early gains by midday as concerns arose about how the slowing economy will affect the technology sector. The Dow Jones industrial average was down about 20 points, or 0.2 per cent, at 8,420. The Nasdaq composite index fell 20 points, or 1.4 per cent, to around 1,450.