News / USA

Contentious US Fiscal Debate Has Worldwide Implications

House Speaker John Boehner, who spoke with President Barack Obama Tuesday, arrives for a closed-door meeting with the Republican caucus on Capitol Hill in Washington, Dec. 12, 2012.
House Speaker John Boehner, who spoke with President Barack Obama Tuesday, arrives for a closed-door meeting with the Republican caucus on Capitol Hill in Washington, Dec. 12, 2012.
VOA News
U.S. President Barack Obama and his Republican opponents in Congress are engaged in a contentious dispute over government spending and tax priorities that could have implications for the world economy.

In Washington, officials are calling it a "fiscal cliff."

It is a financial precipice calling for $500 billion in mandated government spending cuts and tax increases for most American workers that are set to take effect on January 1 unless Obama can reach a compromise with the Republican lawmakers on a new financial plan to begin to rein in chronic overspending by the American government.

Independent analysts say that if the crisis is not averted, the spending cuts and tax hikes would be so sharp that the jolt would likely plunge the U.S. economy, the world's largest, into its second recession in three years.

With the U.S. economy playing such a key global role, cascading over the fiscal cliff could prove detrimental to the world economy, said Steven Smith, a political scientist with Washington University in St. Louis.

"A lot of those economies in Asia, in Europe that count on a market for their goods in the U.S. would find that the U.S. consumer would be buying a lot less and it would exacerbate already serious conditions in those locations," he said.

Obama, the newly re-elected Democrat, has been trading proposals with the Republican leader of the House of Representatives, Speaker John Boehner. But the two sides do not appear to be close to an agreement. They remain hundreds of billions of dollars apart in the size of spending cuts the Republicans want compared to the White House and the scope of increased taxes being sought by the president and generally opposed by Republicans.

Boehner said he is still hopeful of an agreement, but concedes a wide gap remains in reaching one.

"I remain the most optimistic person in this town, but we've got some serious differences," he said.

The current dispute is one of Washington's own making.

Obama and his Republican foes were unable to reach a comprehensive spending agreement last year, and essentially agreed to postpone the tough choices until after last month's presidential and congressional elections. Now they are faced with the end-of-the-year deadline.

Obama wants to fulfill a campaign promise to end a tax break for the country's wealthiest households, those making more than $250,000 a year, but Republicans have balked, while saying they would agree to end unspecified tax loopholes that mostly benefit well-off families. Republicans, in turn, wants sharp cuts in the country's popular government health care plans for older people and impoverished Americans and pensions for senior citizens, programs most staunchly supported by Democrats.

The philosophical divide between the two parties is contributing to the stalemate, said Smith.

"It’s this balance, and where to achieve that balance, that is making things so difficult," he said. "Republicans are emphasizing more immediate deficit reduction and the Democrats are emphasizing the need to be patient and allow the economy to more fully recover."

Despite the rancor of the moment, Smith said he sees Obama and his political foes eventually reaching a compromise.

“My guess is that no one’s going to be happy with it. They’re also likely to kind of muddle through by not coming up with a large, long-term plan," he said. "My guess is that they can do some things to get through this crisis that will take them through a few months or a year that will have to be addressed again at a later time."

Smith predicted the two sides will make modest changes in the social welfare programs, impose spending caps on various government programs and modestly increase taxes on the wealthy.

He said a more comprehensive package is unlikely. "It seems unlikely they will come to a grand compromise. There’s a lot of pressure on them to do that... But it would require pretty serious concessions on both sides that neither side at the moment seems willing to make.”

You May Like

Philippines, Muslim Rebels Try to Salvage Peace Pact

Peace process faces major setback after botched military operation to find terrorists results in bloody gunbattle between government forces, Moro Islamic Liberation Front fighters More

Republicans Expect Long, Expensive Presidential Battle

Political strategist says eventual winner will be one who can put together strongest coalition of various conservative groups that make up Republican Party More

Video New Wheelchair Is Easier to Use, Increases Mobility

Engineers have come up with a lever-operated design that makes use of easily accessible bicycle technology More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Liberia's Almost Last Ebola Patient Grateful but Still Grievingi
X
Benno Muchler
March 26, 2015 3:41 PM
Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video US, South Korea Conduct Joint Military Exercises

The Eighth U.S. Army Division and the Eighth Republic of Korea Mechanized Infantry Division put on a well orchestrated show of force for the media this week during their joint military training exercises in South Korea. VOA’s Seoul correspondent Brian Padden was there and reports the soldiers were well disciplined both in conducting a complex live fire exercise and in staying on message with the press.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.
Video

Video Young Filmmakers Shine Spotlight on Giving Back

A group of student filmmakers from across the United States joined President Barack Obama at the White House this month for the second annual White House Student Film Festival. Fifteen short films were officially selected from more than 1,500 entries by students aged 6 through 18. The filmmakers and their families then joined the president and a group of celebrities for a screening of their films. VOA’s Julie Taboh reports.
Video

Video VOA Exclusive: Interview with Afghan President Ashraf Ghani

Afghan President Ashraf Ghani, during his first visit as president to Washington, gave a one-on-one interview with VOA Afghan Service reporter Said Suleiman Ashna, about his request for a change in U.S. troop levels, the threat from the Islamic State, and repairing relations with the United States and Pakistan. The interview was held at Blair House, late Sunday, in Pashto.
Video

Video California Science Center Tells Story of Dead Sea Scrolls

The ancient manuscripts were uncovered in the mid-20th century, and they are still yielding clues about life and religious beliefs in ancient Israel. As VOA's Mike O'Sullivan reports, an exhibit in Los Angeles shows how modern science is bringing the history of these ancient documents to life.
Video

Video Angelina Jolie Takes Another Bold Step

Hollywood actress and filmmaker Angelina Jolie has revealed she had her ovaries and fallopian tubes removed to lower her odds of getting cancer. Doctors say the huge publicity over her decision will help raise awareness about the importance of cancer screening. VOA’s George Putic has more

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More