Source: AP
The first phase of a deal to raise the government's borrowing limit would pose little threat to the economy in the short term because almost none of the spending cuts would occur before 2014.
Read Full Article Here
Discretionary spending, which excludes Social Security, Medicare and Medicaid, would be cut by $21 billion in 2012 and $42 billion in 2013, according to an analysis by the Congressional Budget Office. That's a small fraction of the nation's $14 trillion economy.
"The immediate economic impact of the ... deal should be relatively minor," Brian Gardner, an analyst at Keefe, Bruyette and Woods, said in a research note. "As is usually the case, most of the cuts" have been put off for several years.
The first phase of cuts would reduce spending by $917 billion over 10 years. Acongressional committee would decide on a second phase of cuts totaling $1.5 trillion.
The Obama administration had said the government would have run out of cash to pay its bills without an increase in the $14.3 trillion borrowing limit by Tuesday.
The deal comes as the U.S. economy is worsening. Manufacturing activity dropped to its lowest level in two years, according to a survey released Monday.
No comments:
Post a Comment