WASHINGTON-the US Government head over heels on Friday to broad cuts that threaten to hinder the economic recovery stumbled, after President Barack Obama and Congressional leaders not find an alternative budget plan.
Set up during an attack by deficit reduction fever in 2011, the automatic cuts can be stopped only by agreement between the Congress and the White House.
A deal proved elusive in talks at the White House on Friday, which means that government agencies start now will Hack a total of $ 85 billion from the budgets between Saturday and Oct. 1. Financial markets in New York shrugged off the impasse in Washington. Democrats predict the cuts, known as "sequestration," could quickly lead to delays in air traffic, furloughs for hundreds of thousands of federal employees and disruption to education.
While the International Monetary Fund warned that belt-tightening u.s. economic growth could slow by at least 0.5 percentage point this year that is not a huge barrier to an economy that is picking up steam.
Obama was resigned to shrinking public budgets. "Even with these cuts in place people all over this country will work hard to make sure we keep the recovery will be, but Washington certainly is not making it easy," he said after the meeting, democratic and Republican Congressional leaders.
In the heart of Washington's persistent fiscal crises is disagreement on how to slash the budget deficit and the national debt $ 16 trillion, bloated over the years by the wars in Iraq and Afghanistan and Government stimulus for the ailing economy.
Obama wants the fiscal gap with spending cuts and tax hikes, but Republicans don't want to admit again on taxes after do in the negotiations on the "fiscal cliff" on the new year.
"The discussion on the revenue, in my eyes, is over. It's about taking on the spending issue, "said House of representatives speaker John Boehner on leaving the meeting.
The full brunt of the automatic cuts will be worn more than seven months.
Congress can stop them at any time if the two parties agree on how to do this.
But no matter how Obama and Congress resolve the battle for 2013, this round of automatic cuts is just one of a decade worth of annual cuts total $ 1.2 trillion in command of the sequestration law.
Given the lack of a deal, Obama is required to make an order to federal agencies to reduce their budgets by midnight.
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