George Soros, a billionaire hedge- fund manager who has donated millions to Democrats, said Democratic President Barack Obama “has lost control of the agenda” on the U.S. economy, leaving it “now in the hands of the Republican Party.”
Republicans “are going to pursue a very strong effort to cut services by refusing to have any tax increases,” Soros said in an interview with CNN’s “Fareed Zakaria GPS” program.
“This agenda will be successful,” though it will be “more directed at cutting services and achieving the ideological purposes of the Republicans rather than to get the economy going,” Soros, 80, said, according to a transcript of the interview released by CNN. “This will have a negative impact on the economy.”
Soros is a major donor to the Democratic Party. He gave $2.5 million to an independent political group established by John Podesta, now an Obama adviser, in 2008 and contributed $50,000, the maximum allowed, for Obama’s 2009 inaugural celebrations. For the 2004 campaign against Republican President George W. Bush, Soros contributed $27 million to Democrats, according to Congressional Quarterly’s Moneyline.
The White House had no immediate comment on Soros’s remarks on the program, taped Feb. 17 and scheduled to be broadcast today.
Obama and Democrats face a fight over cutting the federal budget with Republicans, who gained control of the House of Representatives and reduced Democratic Senate control in November’s elections.
The president sent Congress on Feb. 14 a $3.7 trillion budget for fiscal year 2012 that projects the federal deficit will exceed $1 trillion for the fourth consecutive year. The deficit is forecast to hit a record $1.6 trillion in fiscal 2011. The Republican-controlled House voted yesterday to cut at least $61 billion in federal spending this year.
The reduction would come at a time when investment by businesses isn’t “strong enough to take up the slack,” he said. As a result, unemployment, 9 percent in January, probably will remain high, according to Soros, founder of Soros Fund Management LLC, which oversaw about $25 billion in assets as of September.
The U.S. government is facing a situation in which it may not be able to tap the bond market for funds, according to the Hungarian-born billionaire financier.
“That’s more or less in the cards because we aren’t applying fiscal stimulus, because of the ideologies that the government can’t do anything right, so we can’t expect the government to help,” Soros said. “So you have idle resources, and the Federal Reserve is providing quantitative easing. Well, I think when it expires, they won’t give it any more.”
The Federal Reserve’s so-called quantitative easing program is an effort to stimulate the economy and increase employment by purchasing government debt.
Interest rates ultimately will rise and “choke off the economic recovery,” Soros said.
Members of the fiscally conservative Tea Party network are “decent” and “hard-working” and being misled by people aiming to cut taxes and regulations for “selfish purposes,” Soros said. “They are being used and deceived,” he said.
Soros predicted that Iran’s ruling regime also will topple within the year, though warned the situation there could become “very ugly” before this happens.
“Opposition leaders could easily be killed through a false judicial process because the regime is fighting for its survival, because they know that they have committed such crimes that it’s either them or the people,” he said. “But I don’t think that they will be able to succeed.”
To contact the reporters on this story: Kim Chipman in Washington at firstname.lastname@example.org;