Obama wades into budget battle in US states

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The budget battle embroiling Washington is heating up in US states as newly elected Republican lawmakers move to bust public workers unions and slash services in the face of big deficits.

President Barack Obama, who earlier this week threatened to veto the Republican federal budget plan, has also stepped into the fray at the state level as his Democratic party engages in a deeply ideological fight over budget priorities.

At issue is a basic argument over the role of government, who should bear the brunt of the upcoming cuts, and how best to stimulate the economy.

"The Democratic party views government as a tool for accomplishing social goals and particularly for remedying the inequalities that can be caused by the marketplace," said Marjorie Hershey, a political science professor at Indiana University.

"To the Republicans, government is the beast that has to be controlled and the way you control something is you reduce its funding."

Democrats are looking to trim spending, but warn that deep cuts risk derailing the fragile US recovery and would sharply undermine core government functions.

Republicans insist that the government is bloated and that cutting taxes is the only way to spur economic growth.

After making major gains at the state level in November's mid-term election, they have set their sights on government workers.

They are facing fierce opposition.

More than 35,000 people surrounded the state capitol in Wisconsin Friday, capping days of protests against newly elected Republican Governor Scott Walker's plans to eliminate most collective bargaining rights for public employees.

Demonstrators insist they are willing to negotiate on pay and benefits, but say they cannot tolerate the loss of their democratic right to organize in a union.

"This is disgusting," said union iron worker Sean Collins of Waunakee.

"Everybody in Wisconsin should be scared, because if the unions go down, everybody else's standards will go down."

Republicans governors across the country are also pushing to knock down public unions, which are the largest element of the nation's labor movement and a major source of support for Democrats.

Obama dispatched political operatives to Wisconsin to help mobilize protesters and criticized Walker's plans as an "assault on unions" in an interview with a Milwaukee television station.

While acknowledging that "everyone's got to make some adjustments to the new fiscal reality," Obama noted that public employees "make a lot of sacrifices" and told TMJ4 that "it's important not to vilify them or to suggest that somehow all these budget problems are due to public employees."

Republican House Speaker John Boehner slammed Obama for helping to "incite protests against reform-minded governors across the country" that are similar to the violent anti-austerity marches which rocked Greece last year.

Walker said Obama should "stick to balancing the federal budget" and insists that the only way to get his states finances "on track" is to eliminate collective bargaining rights so public workers can't fight pay and benefit cuts.

State and federal revenues have taken a massive hit from tax cuts implemented under the Bush administration, increased costs due to the wars in Iraq and Afghanistan and the deepest economic downturn in decades.

Years of underfunding pension plans for government workers and ballooning medical benefit costs have also created major budget liabilities in many states and municipalities.

That has contributed to efforts to target the wages and benefits of public workers at a time when nine percent of Americans are out of work and private sector workers have seen wages fall and benefits slashed.

"The idea of trying to increase revenue to offset government expenditures just is not on the table," said Ken Janda, an emeritus professor of political science at Northwestern University.

"Somehow or other, beginning with (President Ronald) Reagan the idea of no more taxes has become an element of faith within the Republican Party."

And despite the fact that the United States has the lowest taxes in the industrialized world, much of the American public believes they are still paying too much, he said.

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