Deal to Delay Spending Cuts in Doubt

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Chances seem to be dwindling for a deal in time to avert deep, automatic government spending cuts from beginning on March 1. The Republican-controlled House remains at loggerheads with the Democratic-led Senate and President Barack Obama over key issues.

With no top-level talks under way and Congress off until next Monday, each side is blaming the other.

The so-called sequester cuts "won't help the economy, won't create jobs, will visit hardship on a whole lot of people," Obama said Tuesday. "Congress didn't come together, do their jobs. And so as a consequence we've got these automatic, brutal spending cuts that are poised to happen next Friday."

Obama wants both more tax revenues and spending cuts.

Congressional Republicans oppose further tax hikes. "Just last month, the president got his higher taxes on the wealthy and he's already back for more," says Republican House Speaker John Boehner.

The scheduled cuts would trim roughly $85 billion from military and domestic spending in this budget year. Spending on Social Security, Medicare, Medicaid, and other "entitlement" programs would be spared.

One reason there's little progress toward a deal is that there's yet another deadline ahead -- March 27, when a temporary budget agreement expires and Congress must scramble to find funds to run the entire government.

During those negotiations next month, the most damaging automatic sequester cuts could be repealed or softened, the thinking goes. That effectively buys more time. And lawmakers seldom miss chances to put things off.

Meanwhile, deficit hawks Alan Simpson and Erskine Bowles are offering a new deficit-reduction plan they see as a possible compromise for Democrats and Republicans.

It combines rewriting the tax code -- to eliminate many deductions -- with deep spending cuts for some $2.4 trillion in deficit-reduction over 10 years.

Of the current impasse, "everybody's at fault," says Simpson, a Republican.

"Not only do we not have a long-range plan, we don't even have a budget," says Democrat Bowles. "We're operating this country on a month-to-month basis."

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2263350, ~/Articles/ArticleHandler.aspx, 9/30/2016 2:59:06 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,343.22 199.77 1.10%
S&P 500 2,173.21 22.08 1.03%
NASD 5,321.86 52.71 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes