G-20 nations pledge to cut deficits despite Obama’s push for stimulus

President Barack Obama’s push for continued global stimulus in light of
a tenuous economic recovery was largely pushed back at the G-20 as world
leaders agreed to focus on deficit reduction.

Obama and his team have repeatedly warned that while the worst of
the crisis has passed, the recovery is still “uneven and fragile” and
ongoing stimulus efforts are needed.

{mosads}But European leaders, led
largely by German Chancellor Angela Merkel, have pushed back on
increased spending as deficits rage out of control.

Those European leaders appeared to win out over the weekend at the
G-20 summit in Toronto as the world’s leaders agreed to cut deficits in
half by 2013.

But Obama lauded what he saw as a spirit of cooperation at the summit,
saying that he was aware that “the focus coming into these meetings was
on whether our nations would be divided by different approaches.”

“But as we have proven repeatedly over the last 18 months, our
nations can come together through the G-20, and build on the foundation
of our shared interests,” Obama said in his closing press conference.

Obama bristled at suggestions that he is not as concerned about
deficits as other countries, saying that Germany’s plans “are no more
front-loaded than ours.”

“Keep in mind that we had already proposed a long time ago that we were going to cut our deficits in half by 2013,” Obama said.

Obama
said there is “violent agreement” among the countries in attendance
that “we’re not rushing to the exits too quickly and at the same time”
while simultaneously putting in place preliminary plans for deficit
reduction.

Obama did, however, win language in the summit’s
declaration expressing a cooperative pledge to continue to build on
growth efforts established at last year’s G-20 summit in Pittsburgh.

The declaration noted that unemployment in many “countries remains
at unacceptable levels, and the social impact of the crisis is still
widely felt.”

“Strengthening the recovery is key,” the leaders
declared. “To sustain recovery, we need to follow through on delivering
existing stimulus plans, while working to create the conditions for
robust private demand. At the same time, recent events highlight the
importance of sustainable public finances and the need for our
countries to put in place credible, properly phased and growth-friendly
plans to deliver fiscal sustainability, differentiated for and tailored
to national circumstances.”

The leaders appeared to be walking a fine line, promising continued
growth efforts while at the same time curbing spending and reducing
deficits. The declaration makes clear that those decisions will be made
at the “national level,” leaving the paths to recovery up to each
individual country or on the European level.

The declaration stated that the leaders “agreed to follow through
on fiscal stimulus and communicating ‘growth friendly’ fiscal
consolidation plans in advanced countries that will be implemented
going forward.”

Despite Obama’s push for increased global stimulus spending,
efforts to do the same at home have largely stalled as Congress appears
less and less likely to pass any major stimulus bills as deficit
worries have increased significantly in the U.S.

Obama was scheduled to wrap up the G-20 and G-8 summits in Canada
with a press conference Sunday evening. He was scheduled to return to
Washington later Sunday night.

This story was updated at 6:45 p.m.