Obama criticises Republicans for ‘meat cleaver’ economics

US president Barack Obama has berated Republicans for their inaction on the economy, saying that reversing the growing inequality between the rich and poor in America should be "Washington's top priority."

In a major speech on the economy, the first in a series of addresses on the topic this week, Mr Obama revealed little new in his strategy to stimulate economic growth but set a more aggressive tone ahead of budget battles with his political opponents over the country’s borrowing limit and government funding.

Revisiting Knox College in Illinois where in 2005 he gave his first economic speech as a newly-elected senator for the state, Mr Obama spoke about how the middle-class had remained depressed as almost all of the income gains of the last 10 years had flowed to the wealthy.

Facing his lowest approval rating since November 2011 and an unemployment rate mired above 7 per cent, Mr Obama took credit for a tentative US economic recovery and devoted most of his speech to blaming congressional Republicans for blocking legislative changes that would spur further growth in the economy.

Mr Obama criticised a “faction of Republicans in the House” for the automatic budget cuts known as the sequester, for “gutting” a bill to help farmers and “the most vulnerable children”, and for blocking immigration legislation that would boost the economy by more than $1 trillion.

“With an endless parade of distractions, political posturing and phony scandals, Washington has taken its eye off the ball and I am here to say this needs to stop. Short-term thinking and stale debates are not what this moment requires,” he said.

Scalpel
Rather than reducing government deficits "with a scalpel by cutting programmes we don't need" House Republicans insisted on "a meat cleaver called the sequester" that had cost jobs, curbed investments and harmed government programmes that stimulate economic growth, said Obama.

Gridlock in Congress had "gotten worse" over the past six months, the president said. Setting up a fight with Republicans, he warned that he would take his own measures if Congress refused to act.

“I will not allow gridlock, inaction or wilful indifference to get in our way,” he said, warning that the stakes for the middle-class could not be higher as Washington faces another budget deadline in the autumn.

If Republicans were looking for “a bipartisan place to get started,” they should pass immigration reform which economists say would “shore up” social welfare funding for years, Obama said.

In a preemptive strike ahead of the speech House Speaker John Boehner, a Republican, labelled the address "a hollow shell" saying that it rehashed old themes.