Clash over U.S. spending looms with Obama speech

WASHINGTON – Democrats and Republicans are gearing up for a clash over what is likely to be a central theme of President Barack Obama's address to Congress on Tuesday: deficit reduction and spending cuts.

Obama, a Democrat, is scheduled to make his State of the Union address at 9:00 p.m. on Tuesday (0200 GMT on Wednesday), and the White House has signaled the president will focus his time primarily on the economy and U.S. fiscal woes.

Reining in U.S. spending is likely to be part of that equation, but both parties disagree on how to do that.

Republicans have called for $100 billion in cuts. Democrats are fearful that large cuts in domestic spending could stifle the still-fragile economic recovery and jeopardize hopes of reducing the 9.4 percent unemployment rate.

That debate, which has played out in recent days, continued ahead of Obama's speech. Senator Jeff Sessions, a Republican from Alabama, expressed skepticism on Monday that Obama would get serious about reducing spending.

"He's got to get on the road to fiscal sanity, and I'm not sure we're going to hear that," Sessions said in an interview with Reuters Insider.

"Business as usual cannot be continued. And I am just terribly afraid the president (hasn't) got it, that he's in denial. He's talking about investments, still, which are spending programs. And I'm really worried about that."

Obama plans to emphasize the need for U.S. global competitiveness in the speech and views investment in education and infrastructure as crucial to that effort.

White House spokesman Robert Gibbs said both political parties agreed the issue of spending cuts needed to be addressed.

"We're not going to have a debate in Washington about whether we need to make some changes and whether we need to control our spending," he told reporters.

"We're going to have, hopefully, a bipartisan discussion and work together on how we go about doing that."

Gibbs declined to comment on whether the president would outline vision for deficit reduction measures or whether he would now endorse specific proposals from the bipartisan deficit commission that made a series of controversial recommendations last year.

Source: Reuters