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Obama calls for US government pay freeze
AFP - Tuesday, November 30
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WASHINGTON (AFP) - – US President Barack Obama on Monday proposed a two-year freeze on most government pay, as a fierce political battled loomed over spending and taxes.
On the eve of a face-to-face meeting with his Republican adversaries, Obama said the freeze -- which must be approved by Congress -- would save more than five billion dollars in the rest of the 2011 fiscal year and in 2012.
Kicking off what he termed a "serious and long-overdue" debate on the deficit, Obama insisted the United States must make a "broad sacrifice" to correct its long-term fiscal course.
The freeze will apply to all civilian federal employees including those at the Department of Defense, but military personnel will not be affected.
The plan would cut only a fraction of the deficit, which stood at about 1.3 trillion dollars in fiscal 2010.
But coming on the eve of a White House meeting with Republicans and as a presidential deficit commission finalizes its findings, Obama's announcement marked an opening salvo in what is sure to be a tough political fight.
Fresh from congressional election victory, Republicans have pressed hard for Obama to slash federal spending.
While the need for some spending cuts is agreed, the parties have clashed over how far and how fast to trim costs, with Democrats insisting measures cannot be so draconian that they stymie growth.
They argue the US government, with an annual budget of over 3.5 trillion dollars, is a key driver of growth in the world's largest economy and provides many vital services.
"There is no doubt that if we want to bring down our deficits it is critical to keep growing our economy," Obama said. "We can't put the brakes on too quickly."
But trying to head off Republican claims that a bloated government bureaucracy was burdening future generations with unsustainable debt, Obama said federal employees would share in a broader sacrifice.
"The hard truth is that getting this deficit under control is going to require some broad sacrifices and that sacrifice must be shared by the employees of the federal government," he said.
"After all small businesses and families are tightening their belts, their government should too."
The pay freeze was welcomed by some Republicans, but wary of big government, some said they did not go far enough.
Congressional Republics have proposed pay cuts of up to 10 percent for federal employees and a swathe of layoffs.
Obama's proposal proved unpopular with the Democratic base.
"In the context of the deficit, Obama will get chump change from freezing federal pay," said Lawrence Mishel, president of the Economic Policy Institute, who accused Obama of reinforcing the "conservative myth" that federal workers are overpaid.
On Tuesday members of the deficit commission are expected to hold meetings in Washington as they prepare to put forward a broad range of measures to bring down the deficit.
Initial plans from the panel caused widespread opposition on both sides of the political divide.
The task force -- co-led by former Republican senator Alan Simpson and veteran Democratic operative Erskine Bowles -- set out deep spending cuts and sweeping tax reforms in a bid to slash US budget deficits by four trillion dollars over the next decade.
The measures include a 200 billion dollar cut in discretionary spending in 2015, split equally between defense and domestic outlays, to bring the annual deficit down to 2.2 percent of gross domestic product.
But amid a bitter partisan divide some observers have questioned whether the committee can reach significant recommendations, as 14 out of 18 votes are needed to agree such a step, meaning several Republicans on the panel would have to vote with Democrats.
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