Monday, July 11, 2011

Obama: No quick fix for economy

US President Barack Obama

Source: Press TV

US President Barack Obama says reaching a deal on reducing the country's huge budget deficit is not enough to elevate the country out of economic recession.

"I am not somebody who believes that just because we solve the deficit and debt problems short-term, medium-term or long-term, that that automatically solves the unemployment problem," Obama said at a White House news conference on Monday.

Obama backed economic stimulus plans such as the creation of an infrastructure bank, the extension of payroll tax cut and the passage of trade deals and said he would push for more economic stimulus if he could.

"My strong preference would be for us to figure out ways that we can continue to provide help across the board, but I'm operating within some political constraints here, 'cause whatever I do has to go through the House of Representatives," Obama said.

In a White House meeting on Sunday, Obama and his fellow Democrats tried to revive a push for a sweeping USD 4 trillion package that would cut the deficit through spending cuts and tax hikes.

Republicans, however, urged a focus on a smaller, USD 2 trillion measure while insisting on their opposition to tax hikes for the wealthy.

The US Treasury has announced that it will exhaust its borrowing capacity by August 2, which means that it will run out of funds to timely repay all its debts.

Treasury officials have warned that failure to seal a deal by the August deadline could spook investors, causing US interest rates to surge, stock prices to plummet and putting the US at risk of another recession.

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