Obama slashes growth forecast
Washington, September 2, 2011
US President Barack Obama has sharply cut estimates for US economic growth, underscoring the difficult challenge he faces in spurring a stronger recovery and creating more jobs.
The president, who must curb high unemployment to improve his chances of winning re-election in 2012, will give a major speech on September 8 on how he plans to lift hiring and growth.
"The economic projections make clear there is a real need in the short term to kick start economic growth and get on a sustained higher growth path," White House budget chief Jack Lew said.
In a midyear review of its annual budget, the White House offered some hints of what Obama will say next week. It said the speech could include proposals for a mixture of tax cuts aimed at middle class families, infrastructure spending and aid for the long-term unemployed.
Under the new projections, the White House said the deficit would come down more sharply than expected to 8.8 per cent of GDP this year, compared with the 10.9pc forecast when the budget was released in February.
The improvement was largely due to spending cuts imposed under a deal struck last month by Obama and opposition Republicans to raise the US debt ceiling.