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SHADOW PRESIDENT UPDATE

President vs. Republicans – Budget Battles Continue

Dr. andserson
Dr. Matthew Anderson
Shadow President
President Barack Obama went from battling Republicans to the edge of the fiscal cliff, to what appears to be a series of impending budget battles with Republicans in Congress over a deal to offset the impact of the across-the-board spending cuts known as the Sequester which kicked in March 1st.  The President failed to negotiate a deal that would offset the impact of 85 billion dollars in budget cuts aimed primarily at domestic and defense programs. On March 1 President Obama met with four Congressional leaders for an hour-long meeting in an effort to come up with a solution to the budget cuts, but politicians on both sides were unwilling to yield on demands to negotiate an alternative.

President Obama had until midnight on March 1 to instruct the various branches of government to shrink their budgets based on a specific formula. After the budget adjustments, federal agencies will begin to inform the state and local governments on how the cuts will impact the amount of federal money they will receive.  Emergency /extended unemployment benefits are set to be cut immediately.  Many fear the cuts will negatively impact military readiness and the broad national economy.

According to reports, the President remains optimistic about reaching a deal to offset the budgets cuts, but President Obama spoke with uncertainty on how long he thought it would take to hash out a deal.  He has been quoted as saying, "it may take a couple of weeks," "it may take a couple of months."  President Obama has maintained that any deal will have to include across-the-board tax increases and spending cuts.  Republicans are opposed to any further tax increases after agreeing to 600 billion dollars in tax increases to avert the "so called" fiscal cliff. Obama has been criticized by Republicans for going to the public in campaign mode, linking Republican unwillingness to compromise to the overall detriment the Sequester will have on the economy.

Most business executives are not concerned with the impacts of the budgets cuts.  Some executives have spoken in favor of the cuts as opposed to more across-the-board tax increases proposed by the President.  During the fiscal cliff debates, CEOs unsuccessfully advocated for a deficit reduction deal that included both tax increases and reductions in entitlement spending.  President Obama came into an economic crises and it seems as if the majority of his two-term presidency will be beset with economic issues. Attention now will shift to another budget deadline—the need for a bill to extend government funding by March 27th.  If there is no extension, the result will be a partial government shutdown.

Dr. Matthew Anderson
Shadow President

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