U.s. Budget dispute: chances of agreement dwindle

u.s. budget dispute: chances of agreement dwindle

Although obama returned to washington early from his christmas vacation in hawaii on thursday, in order to prevent the so-called fiscal cliff with automatic tax increases and spending cuts at the last minute. But insiders warn the deadline of new year’s eve is too short. U.S. Media do not expect a solution until the beginning of the year – i.E. After the deadline, but still in time to prevent a slide into recession.

However, new complications are already looming: treasury secretary timothy geithner has warned that the u.S. Could reach its debt limit again by the end of the year. The current budget of $16.4 billion (12.4 billion euros) is due to expire on 31 december. December knocked out. Although geithner says he wants to gain some breathing room through budget reallocations. But he made it clear that the clock is ticking here, too – otherwise the USA will no longer be able to pay its bills in two months at the latest.

Meanwhile, the warring factions are already blaming one another. Senate democratic leader harry reid publicly acknowledged that the U.S. Was allowed to fall off the fiscal cliff. "It seems that’s where we’re headed," he told the senate, which reconvened thursday.

Reid said republicans would torpedo a solution. House of representatives ruled by the "dictatorship" of majority leader john boehner. U.S. Media suspected that the beleaguered boehner, who had been obama’s preferred negotiating partner until now, first wanted to secure his re-election as majority leader on 3. January wait. In the aftermath, it was more flexible, it hewed.

The U.S. News network CNN, meanwhile, takes a relaxed view of the tug-of-war, reporting that an agreement is likely in ten days at the most. "This is all about political points," CNN quotes republican representative ileana ros-lehtinen as saying. Experts say this is still timely because tax increases and spending cuts didn’t take effect immediately. There is still time.

Obama and senators had "one last shot," the "washington post" wrote on thursday. However, the paper, citing staff from both parties, said that failure was "not only a possibility, but the most likely outcome.".

Main point of contention is tax hikes for the rich. Obama wants households with annual incomes of $250,000 (just under 190,000 euros) or more, or at least $400,000, to pay more in the future. He wants to keep tax cuts for the middle class.

Boehner most recently offered a limit of one million dollars in annual income for tax increases. But he was then met with massive resistance from radical conservative deputies from the tea party movement who oppose any increases. That has made negotiations even more difficult.

Because the time pressure is so enormous, at best a "small" solution is expected before the end of the year. Obama himself had expressed his willingness to compromise in several steps last friday. According to the report, his main goal is to demand tax cuts for the middle class and unemployment benefits before new year’s eve, which would otherwise expire at the end of the year. The threat of automatic spending cuts from next year onward could be suspended for the time being in a kind of framework agreement, and then details of a compromise savings plan could be worked out in january.