Fate of federal budget in hands NDP (Reuters)

OTTAWA (Reuters) – If the Conservative government wants to hang on to power when it presents its budget on March 22 it will need the support of a small opposition party with which it shares almost no common ground.

The Conservatives do not have enough seats in the House of Commons to pass the budget by themselves and need the backing of one of the three opposition parties. If all three vote against the budget, the government will fall and Canadians will head for an election in early May.

This leaves the government's fate in the hands of the New Democrats, the only party that has not already said it will reject the budget.

Leader Jack Layton says Canadians want Parliament to work and is pressing the government to commit to a series of measures to help seniors, cut home heating costs and hire more doctors.

Layton, whose party favors more social programs and higher corporate taxes, often attacks the tax-cutting tough-on-crime Conservatives and is an odd political partner for Prime Minister Stephen Harper and Finance Minister Jim Flaherty.

But two crucial factors are at play: Layton's health, and whether the New Democrats can shrug off polls showing the party would lose seats in an election.

The energetic 60-year-old is under treatment for prostate cancer and recently suffered a hairline fracture of the hip, which means he is walking on crutches. Aides insist this would not overly hinder his traditionally hard-driving style of campaigning, which often involves a string of 16-hour days.

"Mr. Layton is doing well ... He is ready to campaign whenever the election may come," said spokesman Karl Belanger.

If the government gives Layton enough of what he wants, he will back the Conservatives while telling supporters that only his party is able to get things done in Ottawa.

Belanger said Harper and Flaherty "can decide to help Canadian families by including some of the practical and affordable proposals the NDP has put forward. We hope that these measures will be included in the budget, but so far, we haven't been given any guarantees."

Flaherty said on Tuesday he was still talking to some opposition legislators and had not finalized his budget plans.

"There are lots of things we can do in the budget ... there are a group of older people in Canada who are not entitled to (state pension) benefits who could use some support from government," he told reporters.

If the government makes enough concessions this could help Layton gain popularity at the expense of the Liberals, a traditionally big tent centrist party that has been inching left.

In 2005, the New Democrats kept the then minority Liberal government in power in return for pledges to boost spending on social programs. Both parties are now fighting for the support of the same segment of the electorate, a factor which helps the Conservatives stay in power.

If Layton decides to bring down the Conservatives, polls indicate the NDP would lose some of the near-record 37 seats it won in the 2008 election. It now holds 36 seats.

This would pain Layton, who took over as leader in 2003 when the party only about a dozen seats and was regarded as politically irrelevant. The House of Commons has 308 seats.

(Reporting by David Ljunggren; editing by Peter Galloway)

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Mukherjee budget menaces Indian forests (OneWorld.net)

Feb 28 (OneWorld.net) - India is the first major economy to present an annual budget since the disruption of oil production in Libya. Plans for the economy in 2011/12 revealed earlier today surprised observers by making no provision for volatile oil prices.

Finance Minister, Pranab Mukherjee, is bound to be challenged for speaking for almost two hours without a single reference to the subject. The price of oil has increased by more than 35% over the last year.

Like many countries with predominantly poor populations, India holds down prices of food, fuel and fertilizer through subsidies. In the last financial year these subsidies accounted for 12.5% of government expenditure, rising sharply in recent months as the oil market spiked.

Representing the world's largest democracy, the Indian government is acutely aware that 80% of its population of 1.2 billion survives on less than $2 per day. Rampant inflation in food and other essentials means almost certain political death at the hands of the electorate.

Last Wednesday New Delhi was the scene of noisy anti-government protests organised by the trade union movement. Failure to combat inflation by negligent and corrupt government ministries was the call to action.

Annual food price inflation in India is already running at 10%. Rising fuel prices may make matters worse through higher transport and fertilizer costs.

Many observers anticipated that Mr.Mukherjee would make provision for increased subsidies to assist the poor, taking the risk of a deeper fiscal deficit.

The minister is gambling that good harvests in 2010 will be repeated this year. In his speech he departed from traditional budget rigour in conceding that: "like last year, I seek the blessings of Lord Indra to bestow on us timely and bountiful monsoons."

Other developing countries may be less trusting to fate. But they will also look to India for pointers on the shared challenge of reducing dependence on oil. The budget speech did hint at a new emphasis which may alarm environmentalists.

As for many countries in Africa, the cheapest and quickest escape from oil for India is to accelerate exploitation of its ample coal reserves.

Such a move would undermine the country's pledge to the UN Framework Convention on Climate Change to reduce the energy intensity of GDP by 20% between 2005 and 2020. Coal reserves also tend to be located in protected forest regions.

India does not lack for alternative advice on how to kick the oil habit. Towards a Green Economy is the title of a major report published by the UN Environment Programme last Monday.

It encourages developing countries to abandon subsidies of fossil fuel products and grasp the nettle of low carbon investment. UNEP claims that "the report comprehensively challenges the myth of a trade off between environmental investments and economic growth."

The events of a busy budget week in New Delhi suggest rather more nuanced thinking by the Indian government. "A developing country like ours must find ways to strike an appropriate balance between environmental imperatives and developmental needs," warned Indian President Pratibha Patil.

Her speech marked the ceremonial opening of the parliamentary budget session which took place on the same day as the UNEP report was released.

Mukherjee repeated this sentiment in his budget presentation and then went further: "A Group of Ministers has been set up to consider all issues relating to reconciliation of environmental concerns.....including those related to infrastructure and mining," he said.

These statements are ambiguous in their intent but the choreography appears to be circling the embattled champion of India's environmental movement, minister Jairam Ramesh. Famous for enforcing environmental laws in the teeth of powerful business interests, Ramesh has lately been accused of choking off economic growth with his green principles.

Within the Indian cabinet, this argument is most vigorously pursued by the Minister for Coal. Shriprakash Jaiswal is unhappy that Ramesh has banned the development of 203 coal blocks located in sensitive forest areas.

"Saving forests is indeed crucial, but not at the cost of compromising with the nation's industrialisation and growth," Mr. Jaiswal told a press conference on Wednesday.

Greenpeace India is alarmed that the environment minister may be unable to withstand an ambush by his colleagues. A staff blogger claims that Ramesh "has drastically reduced the areas demarcated as No Go zones."

"What do you want: forests or coal?" is the current lead campaign of Greenpeace India. As the complex interaction between poverty, food and energy evolves over coming months, the question will have to be answered.

More Information:

Support the Forests the Greenpeace India campaign

OneWorld India briefings

* Bill Gunyon is Editor of OneWorld Guides

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Wis. GOP poised to cut worker rights in budget fix (AP)

MADISON, Wis. – Wisconsin is poised to strip collective bargaining rights from most of the state's 175,000 public employees in the boldest step by a new Republican governor and Legislature to solve budget problems by confronting organized labor.

The state Senate and Assembly are expected to vote as soon as Thursday on Gov. Scott Walker's plan to end collective bargaining for all state, county and local workers except for police, firefighters and the state patrol.

More than 10,000 public employees staged demonstrations at the state Capitol Tuesday to protest the measure, banging on drums and screaming "Save our state!" and "Kill the bill!" A parade of witnesses railed against the bill and testified to lawmakers for hours about the impact on middle-class families; hundreds still waited to speak as the clock ticked toward midnight.

Madison school district officials canceled Wednesday classes because teachers planned stay away to protest the bill. As of late Tuesday, 40 percent of the district's 2,600-member teacher bargaining unit had called in sick and the number was expected to increase.

Opponents of proposal essentially were mounting a "citizen filibuster" in hopes of delaying a committee vote on the bill, said Rep. Robin Vos, R-Rochester. But legislative leaders said earlier that Walker has enough support in both chambers to approve the measure, which he said is necessary to address a projected $3.6 billion budget deficit.

"We're broke and we don't want to lay off almost 20,000 people," said Senate President Mike Ellis, a Republican, who added, "They've got the votes to pass it."

Union representatives were attempting to sway key moderates for a compromise but Democrats said the bill would be tough to stop.

"The Legislature has pushed these employees off the cliff but the Republicans have decided to jump with them," said Sen. Bob Jauch, one of 14 Democrats in the 33 member chamber.

New Republican governors and legislatures in other states have proposed cutting back on public employee costs to reduce budget shortfalls, but Wisconsin's move appears to be the earliest and most extensive.

Wisconsin was the first state to enact a comprehensive collective bargaining law in 1959 and also is the birthplace of the American Federation of State, County and Municipal Employees, the national union representing all non-federal public employees, which was founded in 1936 in Madison.

But the election of Walker, an outspoken conservative, last November and the GOP's seizing of control of both legislative chambers set the stage for a dramatic reversal of Wisconsin's strong labor history.

Johanna Lanner-Cusin, 29, a history teacher who came to the University of Wisconsin-Madison to pursue a graduate degree, told lawmakers Tuesday that Walker's proposal would hurt the school's ability to recruit quality instructors and graduate students.

"It's hard to go into a classroom and teach people about a society that's moving backwards," she said. "I'd rather not do that.

Walker's plan would make workers pay half the costs of their pensions and at least 12.6 percent of their health care premiums. State employees' costs would go up by an average of 8 percent. The changes would save the state $30 million by June 30 and $300 million over the next two years.

Unions could still represent workers, but could not seek pay increases above the Consumer Price Index unless approved by a public referendum. Unions also could not force employees to pay dues and would have to hold annual votes to stay organized. Local police, firefighters and state troopers would retain their collective bargaining rights.

In exchange for bearing more costs and losing leverage, public employees were promised no furloughs or layoffs. Walker has threatened to order layoffs of up to 6,000 state workers if the measure did not pass.

Wisconsin is one of about 30 states with collective bargaining laws covering state and local workers.

Walker has argued that the public employee concessions are modest considering what private sector workers have suffered during the recession.

But Democratic opponents and union leaders said Walker's real motive was to strike back at political opponents who have supported Democrats over the years.

Protesting workers arrived in buses from across the state and poured into the Capitol, where they rallied under the watch of a large security force. Protesters chanted, waved signs and occasionally applauded testimony broadcast from the legislative hearing on monitors set up in the Rotunda.

"We're focusing on being heard as a people, as one, all the unions," said Michael Hyde, a sergeant at the prison in Waupun. "Government is supposed to be our representative."

Kathy Lusiak, 59, a computer lab aide at Prairie Lane Elementary School in Kenosha, said the bill would cost her about a third of her $21,000-per-year salary. "I'm totally shocked. I never thought it would be this drastic," said Lusiak, who joined the protest. "It's very much a nightmare scenario."

The public employee bill is the latest that Walker has pushed through the GOP-controlled Legislature in rapid order since taking office in January. He's also signed into law tax cuts for businesses that relocate to Wisconsin and those that create jobs and sweeping lawsuit reform. To achieve additional budget savings, he is seeking authority to make changes in the Medicaid program, sell state power plants and restructure existing debt to save about $165 million.

Democrats, who lost the governor's office and control of the Legislature in the November midterm elections, have been powerless to stop to the juggernaut. Republicans hold a five vote margin in the Senate and a 57-38-1 edge in the Assembly.

The threat of layoffs helped many lawmakers reluctant to compromise. "Anybody who promises you that there's an easier way to close this gap is trying to sell you something," Senate Majority Leader Scott Fitzgerald said in an open letter to Wisconsin workers.

Governors in a number of other states, including Ohio, Indiana, Nevada and Tennessee, have called for forcing concessions from public employee unions but no similar measures have moved to final action.

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Harper plays down chances of tax cuts in budget (Reuters)

OTTAWA (Reuters) – Canadian Prime Minister Stephen Harper played down the chances that next month's budget would contain tax cuts, saying in an interview broadcast on Tuesday that people were not going "to have a lot of goodies".

The minority Conservative government insists the budget will mark the end of a two-year C$48 billion ($48.5 billion) stimulus program designed to fend off the worst of the economic crisis.

It says one of its main priorities now is to eliminate a government budget deficit forecast to have hit C$56 billion in the 2009-10 fiscal year.

"We're looking for ways in the budget that we can continue to support growth, but obviously ways that aren't expensive to the treasury and will allow us to keep our deficit coming down," Harper told the 1310 News radio station.

"I don't think Canadians are expecting that they are going to have a lot of goodies. I think everyone understands the government has constrained financial room. But at the same time we're committed to not raising taxes."

The Conservatives, who only have a minority of seats in the House of Commons, could be defeated over the budget if all three opposition parties vote against it.

Harper repeated his position that an election now would be an unnecessary distraction.

The Liberals, the biggest opposition party, are vowing to scrap C$6 billion in annual corporate tax cuts if they win power.

"Raising taxes at this point in the credit recovery I think would be just about the dumbest thing any government could possibly do," Harper said.

($1=$0.99 Canadian)

(Reporting by David Ljunggren; editing by Peter Galloway)

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Obama says budget will feature cuts, investment (AFP)

WASHINGTON (AFP) – US President Barack Obama said on Saturday he was determined to carry out budget cuts needed to improve America's balance sheet, but insisted on making key investments in the country's future.

The president unveils his spending blueprint on Monday, with White House officials saying it will freeze annual domestic spending for the next five years and help the United States reduce the budget deficit by more than $400 billion over the next decade.

"We?ve stripped down the budget by getting rid of waste," Obama said in his weekly radio address.

"For example, we?re getting rid of thousands of government-owned buildings that sit empty because they aren?t needed," the president explained.

"I?ve also proposed freezing salaries for hard-working government employees, because everyone has to do their part. And I?m going to make sure politics doesn?t add to our deficit, by vetoing any bill that contains earmarks."

But Obama said his administration was determined to continue making what he called "job-creating investments" in roads, high-speed speed trains, and broadband Internet connections.

He also emphasized the need of creating new industries like clean energy and biotechnology, improving schools and making college more affordable.

"So, after a decade of rising deficits, this budget asks Washington to live within its means, while at the same time investing in our future," the president stressed. "It cuts what we can?t afford to pay for what we cannot do without."

The comments came after the US Treasury Department reported Thursday that the budget deficit in January was $49.8 billion, a 16.8 percent rise from a year earlier but less than had been expected.

The number was encouraging as analysts had forecast a figure in the range of $59.5 billion.

Nevertheless, expenditures grew 11.3 percent year-on-year in January, faster than receipts, which increased only 10.2 percent.

It was the 28th consecutive month that Washington spent more than it took in in taxes.

Overall, the US national debt has now reached $14 trillion with a $1.5 trillion yearly government deficit.

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Obama likens budget to family pocketbook choices (AP)

WASHINGTON – Portraying his fiscal choices as kitchen table budgeting, President Barack Obama says he is making difficult cuts to allow needed spending increases in education, technology and basic infrastructure like roads and bridges.

In a broad preview of his administration's budget for fiscal 2012, Obama says the combination of cuts and new spending will result in an overall freeze in annual domestic spending for the next five years.

"This budget asks Washington to live within its means, while at the same time investing in our future," the president said Saturday in his weekly radio and Internet address. The White House plans to release his budget on Monday.

With public opinion turning against increased spending, Obama is making a concerted sales pitch to cast his initiatives as fiscally prudent. But the dual goal of taming deficits while adding dollars to selected projects comes as the government faces a projected $1.5 trillion deficit this budget year, which ends in September. Republicans are demanding greater deficit reduction efforts and members of the House GOP say they want to cut the current 2011 budget year by $61 billion.

Obama, in his address, recounted the struggles of a Missouri family — David and Brenda Breece — who have faced difficult financial times by living frugally so they can continue to pay for their daughter's college tuition.

"So Brenda and her husband know what they can do without," Obama said. "But they also know what investments are too important to sacrifice."

The White House projects that the five-year freeze will save $400 billion over 10 years. Cost-saving measures include a two-year freeze on wages for civilian federal workers. The budget also would make cuts in some cherished programs such as the Low-Income Home Energy Assistance Program, which could be trimmed in half — by about $2.5 billion. The Energy Department plans to propose cutting the Office of Fossil Energy by 45 percent, or $418 million.

The Pentagon's budget would see reductions of $78 billion.

Obama said the government also is getting rid of unused government-owned buildings and he said he would also save money by vetoing legislation that contains earmarks, congressionally inserted spending measures for special projects.

At the same time, Obama has proposed a series of new spending initiatives: Education Secretary Arne Duncan said Friday the administration is looking to spend on new early learning programs, on educational overhauls and on making college more affordable.

Obama also has a plan to raise $30 billion over 10 years by auctioning off space on the radio spectrum to commercial wireless carriers. The money would be used to develop a $10 billion national broadband network for public safety agencies and $5 billion for infrastructure to help rural areas access high-speed wireless.

And he wants to spend $53 billion over six years on high-speed rail.

"I'm proposing that we invest in what will do the most to grow the economy in the years to come," he said.

In the Republican address, Sen. Orrin Hatch, R-Utah, argued Obama's reduction plans are too timid.

"The president's proposal for a freeze in government spending might give the White House a nice talking point," he said. "But it is a totally inadequate solution to our nation's spending problems."

Hatch, who is facing re-election this year, is eager to display a tough line on fiscal issues to dissuade a strong tea party challenge like the one that defeated his former Utah colleague, Republican Sen. Bob Bennett.

Hatch called for an overhaul of the tax code, fewer regulations, the start of a debate about changing Social Security and Medicare, and new trade deals with South Korea, Panama and Colombia.

"The bottom line is we are a nation working on borrowed time; we have to make some significant changes in order to compete," he said.

___

Online:

Obama address: www.whitehouse.gov

GOP address: http://www.youtube.com/gopweeklyaddress

___

Online:

http://www.whitehouse.gov

http://www.youtube.com/gopweeklyaddress

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Republicans unveil budget proposal with $100 billion in cuts (Daily Caller)

After weeks of internal debate within the party, House Republicans revealed their proposal for a government funding bill that met demands from party conservatives for no less than $100 billion in cuts to the federal budget.

The intentionally-timed continuing resolution (CR) proposal precedes President Obama’s own budget request, which the White House will release next week.

“The CR contains over $100 billion in cuts compared to the President’s request – fully meeting the spending reduction goal outlined in the Republican ‘Pledge to America’ while providing common sense exceptions for our troops and veterans. These cuts go far and wide, and will affect every community in the nation,” said Appropriations Committee Chair Hal Rogers.

When compared to Obamas budget proposals for fiscal year 2011, the GOP bill includes $18 billion in cuts to the nation’s security budget and $81 billion to discretionary spending levels.

“These were hard decisions,” Rogers said.

Finding the cuts, however, will probably be the easiest part of the process.

Assuming members of the conservative Republican Study Committee do not protest over the fact that the proposal counted $19 billion in security cuts to reach the $100 billion goal, the bill will likely coast through the Republican-majority House. In the Democrat-majority Senate, however, the bill is virtually guaranteed to be gutted and sent back with fewer spending cuts.

Senate Democrats said Friday night that they would not pass a CR with $100 billion in cuts to the president.

“Republicans have taken a meat ax to the initiatives that invest in our economy and create jobs for the sake of appeasing their base,” Senate Majority Leader Harry Reid said shortly after Republicans released the bill. “It’s time for them to stop bowing to the extremists in their party and start working with Democrats to find common-sense solutions to cut government spending and create jobs instead of rolling back the investments that are moving this country forward.”

With funding allocation for the federal government set to expire on March 4, the next three weeks will be a race to finding some sort of agreement between the parties.

To find out what Republicans want to cut, see the complete list of program cuts and a summary of the bill.

Email Chris Moody and follow him on Twitter

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Obama makes sales pitch for his 2012 budget (Reuters)

WASHINGTON (Reuters) – President Barack Obama made a sales pitch on Saturday for his forthcoming fiscal year 2012 budget, pledging that it would help the United States "live within our means while investing in our future."

The budget, due to be unveiled on Monday, contains a mix of cost cuts and targeted spending to achieve Obama's twin goals of reducing the deficit and boosting U.S. competitiveness.

But Republicans, who control the House of Representatives, have balked at any spending increases and accused the Democratic president of not being serious about reining in the deficit, which is forecast to reach $1.48 trillion this fiscal year.

The 2012 fiscal year begins on October 1.

In his weekly radio and Internet address, Obama highlighted his plan to freeze non-security discretionary spending for five years, which the White House says will reduce the deficit by $400 billion over the next 10 years.

"We've stripped down the budget by getting rid of waste," he said in the address, adding that the government would get rid of thousands of empty buildings and freeze salaries on "hard-working government employees" as part of the push.

Obama said the budget proposes to invest in roads, high-speed trains, broadband Internet, clean energy and education. After a decade of rising deficits, Obama said, "I'm proposing a new budget that will help us live within our means while investing in our future," he said.

Republicans, who have a sales pitch of their own to make, said Obama's budget was not taking the deficit problem seriously enough.

"The president's proposal for a freeze in government spending might give the White House a nice talking point. But it is a totally inadequate solution to our nation's spending problems," Senator Orrin Hatch, the top Republican on the Senate Finance Committee, said in his party's weekly address.

"If the president's new budget simply freezes his last budget, he'll stifle job growth by continuing to spend too much, tax too much, and borrow too much."

(Editing by Will Dunham)

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Energy budget calls for cuts in several programs (AP)

By FREDERIC J. FROMMER, Associated Press Frederic J. Frommer, Associated Press – Fri Feb 11, 5:36 pm ET
WASHINGTON – The Obama administration will propose significantly cutting fossil fuel research and closing two facilities, Energy Secretary Steven Chu said Friday.
"Fiscal responsibility demands shared sacrifice — it means cutting programs we would not cut in better fiscal times," he wrote in a blog post Friday outlining the cuts, as well as a big increase for clean energy, that will be proposed in next year's budget.
Chu said that the budget proposal, which will be released Monday, would cut the Office of Fossil Energy by 45 percent, or $418 million. That includes eliminating the Fuels Program, the Fuel Cells Program, the Oil and Gas Research and Development Program and the Unconventional Fossil Technology Program.
The budget would also save $70 million by reducing funding for the hydrogen technology program in the Office of Energy Efficiency and Renewable Energy.
The administration would also end operations at the Tevatron facility at Fermi National Laboratory in Illinois, saving $35 million, and close the Holifield Radioactive Ion Beam Facility at the Oak Ridge National Laboratory in Tennessee, saving $10.3 million. The department made the decision to close that facility in January.
Chu said the budget would also cut DOE corporate management by nearly 13 percent, saving nearly $45 million.
He did not say how much of an increase or decrease the administration would seek for the overall DOE budget, and a spokeswoman declined to provide that information Friday.
Following up on President Barack Obama's State of the Union call for the nation to get 80 percent of its electricity from clean sources by 2035, Chu said the budget would include over $8 billion for research, development, and deployment investments in clean energy technology programs. A White House fact sheet last month said that represents a one-third increase.
Obama, in that speech, also called for eliminating billions in tax breaks to oil companies, and Chu said that the administration will propose repealing several tax preferences for fossil fuels. Chu said those repeals, which are not part of the DOE budget, would save $3.6 billion next year and $46.2 billion over 10 years.
The cuts and increases, which were first reported by National Journal, are only proposed; any changes would have to be approved by Congress.
Another energy program not part of the DOE budget, the Low-Income Home Energy Assistance Program, would be cut in half — by about $2.5 billion, two people familiar with the budget proposal told The Associated Press this week. That program provides home heating aid program for the poor.
Bill Wicker, a spokesman for the Senate energy committee chairman, Jeff Bingaman, D-N.M., said that "some of the cuts DOE is proposing seem sensible to us, others we do not quite understand." He said that the committee will ask Chu about the latter ones at a budget hearing next week.
Rep. Fred Upton, R-Mich., who chairs the House energy committee, had no immediate comment.
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