Spending cuts deal: Barack Obama pushes short-term solution in US budget battles
Finding deficit reductions of up to $85 billion would put off the automatic cuts, known as a "sequester'' in government budget language, until the start of the new fiscal year. White House officials say the delay will give Congress and the administration time to negotiate a long-term deal through the regular legislative budget process.
The automatic cuts are part of a 10-year, $1 trillion deficit reduction plan that was put together in 2011 that was supposed to spur Congress and the administration to tackle the federal debt by lowering it a total of $4 trillion over 10 years. Though Congress and the White House have agreed on about $2.6 trillion in cuts and higher taxes since the beginning of 2011, they have been unable to close the gap between that figure and the long-term, decade-long goal.
The Congressional Budget Office analysis said the government will run a $845 billion deficit this year, a modest improvement compared to last year's $1.1 trillion shortfall but still enough red ink to require the government to borrow 24 cents of every dollar it spends.
The agency projected that the economy will grow just 1.4 percent this year if $85 billion in across-the-board spending cuts take effect as scheduled March 1.
Economists say that too-high deficits and debt are a drag on the economy and could eventually precipitate a fiscal crisis like many European countries are experiencing.
"The CBO's report is yet another warning that we need to
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