Yesterday, Barack Obama set out his budget for ‘Fiscal Year 2013’ – that is, for the year beginning October 2012 (in the US, the fiscal year runs from October to September, rather than April to March as it does here). Of course, the federal budget has to be passed by both houses of Congress before being signed off by the President, so the final version will look very different to this one. It is better
thought of as a statement of Obama’s intent, and his starting point for the negotiations between Congress and the White House. Nevertheless, it throws up a few interesting points, not least in how it relates to our own economic debates in the UK:
1. Deficit reduction. Last year, we said that Obama’s 2012 budget cut the deficit ‘faster, but not further, than Osborne’s’. And that’s still pretty much the case now: Obama plans to slash the deficit to below 4 per cent of GDP by 2014, but then keep it roughly flat.
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