Budget cuts may see US lose ‘Arab Spring’ opportunity

Economic pressure may hobble US support for democratic change, says Clinton
Budget cuts may see US lose ‘Arab Spring’ opportunity
US Secretary of State Hillary Clinton said the country may not have the resources to invest in supporting change in the Arab world
By Reuters
Wed 17 Aug 2011 11:54 AM

The
United States may lose its chance to reshape the politics of the Middle East if
budget pressures hobble US support for democratic forces emerging in countries
such as Egypt and Tunisia, Secretary of State Hillary Clinton said Tuesday.

Clinton
and Defense Secretary Leon Panetta, appearing in a townhall-style meeting,
argued strongly against further cuts to military, diplomatic and development
spending as the United States struggles to slash its $1.4 trillion deficit.

"We
have an opportunity right now in the Middle East and North Africa that I'm not
sure we're going to be able to meet because we don't have the resources to
invest," Clinton said, citing Egypt, Tunisia and Libya as badly in need of
US help.

"Budget
documents are value statements: who we are as a people, what we stand for, what
investments we're making in the future," Clinton said.

"Whether
we will continue to be strong and be able to project American power is up for
grabs, and we're going to make the best case we can that American power is a
power for the good...we hope that it will find a ready audience in the Congress
as these negotiations resume."

Clinton's
remarks were her strongest to date warning that fiscal austerity at home,
depending how it's implemented, could weaken the US leadership role overseas.

Panetta
renewed his warnings against a "devastating" second round of defense
cuts, saying Congress should look elsewhere for additional savings.

Panetta,
who took over the top Pentagon post last month, has said the initial $350
billion savings in security spending already signed into law was manageable --
but that further reductions could imperil the country.

"If
they go beyond that ,.. [to] double the number of cuts that we're confronting,
that would have devastating effects on our national defense," Panetta
said, adding it would "terribly weaken our ability to respond to the
threats in the world."

Under
the deficit deal approved this month by the US Congress, lawmakers and the
Obama administration will weigh priorities as they seek to find at least $1.2
trillion in savings on top of the $917bn already agreed.

Over the
longer term, Washington must figure out a way to put the federal government on
a more fiscally sustainable path and reverse the trend of huge annual budget
deficits.

The
Pentagon's base budget this year was $526bn, excluding the cost of wars in Iraq
and Afghanistan, and is one obvious target. But congressional appropriators are
also looking at a bill that would cut State Department funding by $8.5bn next
year, 18 percent below fiscal 2011 levels and 22 percent below President Barack
Obama's request.

The
International Monetary Fund has estimated that the oil-importing countries of
the Middle East and North Africa such as Egypt and Tunisia will need more than
$160bn over the next three years.

Obama
has pledged to support democratic transitions in both countries, but to date
has offered relatively limited assistance including a debt swap worth roughly
$1bn for Egypt and another $1bn in loans and loan guarantees.

Clinton
said that despite the financial constraints, the United States remained the
world's leading power - but was using that power, as in the case of the
internationally-backed campaign against Libya's Muammar Gaddafi, to build
alliances and share burdens with other countries.

"This
is exactly the kind of world that I want to see, where it's not just the United
States and everybody is standing on the sidelines while we bear the costs,
while we bear the sacrifice, while our men and women...lay down their lives for
universal values," she said.

Clinton
and Panetta, while saying everything was on the table for cuts, pointedly noted
that any realistic revamp of US finances should include mandated spending such
as government-run health insurance and retirement programs as well as possible
new taxes -- something many Republicans staunchly oppose.

Clinton
said the weak US financial position had cast a pall over her efforts to expand US
engagement overseas to face security challenges ranging from the struggle
against al Qaeda to the rise of China in the Pacific.

"We
need to have a responsible conversation about how we're going to prepare
ourselves for the future," Clinton said.

"We've
got to be competitive. We can't just hope, we have to work and we have to make
a strong case for the continuing leadership of the United States."

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