Financial Experts Weigh In On Obama’s Budget Plan

Katie Klingensmith, an economic and policy analyst for USB, gave a talk Monday in Indian Wells about inflation and government debt. She says President Obama’s $3.7 trillion dollar budget is a good start.

“On the other hand,” she said, “the hard work that needs to be done is to involve entitlements.”

Klingensmith referred to social security and Medicare. The president’s blueprint ignores his own deficit commission’s recommendations to slash these two programs.

“I think it’s often very sensitive because no individual, especially those who are actually closer to claiming some of the social security and Medicare benefits, wants to see those benefits cut,” she said.

The president’s budget may reduce the deficit by more than a $1 trillion over ten years, but it will create new debt by more than $7 trillion.

Michael Ryan, chief investment strategist, said fiscal consolidation is necessary. “It means we can’t continue to run a $1.5 trillion budget deficit forever,” he said.

President Obama called his new budget one of “tough choices and sacrifices.”

Republicans called his deficit cutting efforts “too timid.” Some Democrats agreed.