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Obama faces skepticism ahead of G-8 and G-20 summits

WASHINGTON — What a difference a year — and a few trillion dollars of debt — makes.

When Barack Obama first dashed as president onto the world stage at a London economic summit a little more than a year ago, he was greeted like a rock star. Leaders clambered to get a picture with him. Queen Elizabeth invited him to Buckingham Palace. All at a summit largely in sync with his plea to stimulate and regulate the world economy.

Now, when he arrives Friday in Canada for another round of summits, he will find a more skeptical audience.

Obama heads to back-to-back meetings of leaders of the world's eight largest industrial democracies, the Group of 8, and then the 20 largest economies, G-20, urging them to keep spending to stimulate the economy and warning that cutting spending too soon risks sending the global economy back into recession.

However, he faces resistance at home and abroad.

At home, a debt-weary Congress fearful of a "tea party" backlash is balking at his request for more spending as lawmakers look toward November elections. At the G-8 and G-20 summits, he will face leaders from Europe frightened by the spreading debt crisis that began in Greece and is now moving to tighten their belts.

In a pre-summit letter to world leaders, Obama urged his peers to keep stimulating their economies, and to postpone cutting back spending until later.

"Our highest priority in Toronto must be to safeguard and strengthen the recovery," he said. "We cannot let it falter or lose strength now."

Europe is moving to rein in budgets regardless of his warnings.

Europeans pointedly suggest that Obama should fix his own budget, which is running up trillion-dollar-plus deficits.

"Fiscal discipline is a virtue, one which Americans would do well to embrace," added former Arizona Republican Rep. Jim Kolbe, a senior fellow at the German Marshall Fund, in a blog post.

Spending cuts loom

• Greece, which was on the verge of defaulting on its loans in May, needed a 110-billion euro bailout from the European Union and the International Monetary Fund.

• German Chancellor Angela Merkel has announced plans to cut spending by $98 billion during the next four years.

• United Kingdom this week announced a package of spending cuts and tax increases.

• France has also signaled that it could cut spending late this year if tax revenues drop.

• Japan's government debt amounted to a record $9.7 trillion as of March 31, according to the Ministry of Finance. Prime Minister Naoto Kan proposes "sweeping" tax reforms.

Man arrested: In what police are calling a G-20 summit-related arrest, Byron Sonne, 37, of Toronto, was charged Wednesday with several offenses: possession of explosives, dangerous weapons, intimidating a justice system participant and mischief.

Obama faces skepticism ahead of G-8 and G-20 summits 06/23/10 [Last modified: Thursday, June 24, 2010 7:52am]
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