By Alister Bull and Caren Bohan
WASHINGTON | Mon Sep 19, 2011 10:02am EDT
(Reuters) - President Barack Obama will lay out a plan on Monday to cut the U.S. deficit that will raise taxes on the rich, striking a populist tone to motivate his Democratic Party base before the November 2012 election.
Obama will vow to veto any cuts proposed for the government-run Medicare health program for the elderly unless Congress agrees to lift taxes on companies and the wealthy.
His plan, which has little chance of getting through Congress in one piece, sets up the congressional and presidential elections as an ideological battle over taxes and spending.
With opinion polls showing most Americans disillusioned with his economic leadership, winning re-election may hinge on his success in painting Republicans as the party of the rich.
Republicans have consistently opposed any measures resembling tax hikes, saying they will hurt the struggling U.S. economy. "It is disappointing the president has nothing but a fresh slogan for the same job-killing small business tax hikes opposed by bipartisan majorities in Congress," said Michael Steel, a spokesman for top House Republican John Boehner.
The president's recommendations to a congressional "super committee" would deliver deficit savings of more than $3 trillion over the next decade, his aides said, with roughly half of those savings coming from higher tax revenues. Read more
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USEFUL LINKS Business Articles - Business Dictionary - Economics Dictionary - Encyclopedia - Free Dictionaries - Health Corner: A to Z - Post a Free Ad - Classifieds - Mortgage & Loans Calculators - Country Currency Finder - Small Business Ideas - Business & Finance Tips - Business Links - Events Calendar - Post an Event - New York State Quiz - G8 Countries/World Maps The Federal Reserve System (also known as the Federal Reserve, and informally as the Fed) is the central banking system of the United States. It was created in 1913 with the enactment of the Federal Reserve Act, and was largely a response to a series of financial panics, particularly a severe panic in 1907. Over time, the roles and responsibilities of the Federal Reserve System have expanded and its structure has evolved. Events such as the Great Depression were major factors leading to changes in the system.[5] Its duties today, according to official Federal Reserve documentation, are to conduct the nation's monetary policy, supervise and regulate banking institutions, maintain the stability of the financial system and provide financial services to depository institutions, the U.S. government, and foreign official institutions. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors (or Federal Reserve Board), the Federal Open Market Committee (FOMC), twelve regional Federal Reserve Banks located in major cities throughout the nation, numerous other private U.S. member banks and various advisory councils. This division of responsibilities of the central bank falls into several separate and independent parts, some private and some public. The result is a structure that is considered unique among central banks. It is also unusual in that an entity (the U.S. Department of the Treasury) outside of the central bank creates the currency used. According to the board of governors of the Federal Reserve, "It is not 'owned' by anyone and is 'not a private, profit-making institution'. Instead, it is an independent entity within the government, having both public purposes and private aspects." The U.S. Government does not own shares in the Federal Reserve System or any of its component banks, but the Government does receive all of the system's annual profits after a statutory dividend of 6% on member banks' capital investment is paid and an account surplus is maintained. The government also exercises some control over the Federal Reserve by appointing and setting the salaries of the system's highest-level employees. The Federal Reserve transferred a record amount of $45 billion to the U.S. Treasury in 2009. Purpose The primary motivation for creating the Federal Reserve System was to address banking panics. Other purposes are stated in the Federal Reserve Act, such as "to furnish an elastic currency, to afford means of rediscounting commercial Read more... |
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