America temporarily avoid the financial abyss after marathon effort

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Entered into the United States signed an agreement on the budget after marathon effort at the last minute on the budget, which her side to engage in a new contraction phase. The U.S. Congress approved overwhelmingly on a compromise in order to avoid the worst impact of the so-called “financial abyss” and after about two hours of deadline expired midnight last night before it was scheduled to then begin automatically raise taxes and cut spending. He said U.S. President Barack Obama said Congress approved the support of 89 members, and the objection 8 on a plan to protect 98% of Americans and 97% of small business owners from raising the tax on the middle class. The agreement includes a compromise on tax levels for the abolition of tax exemptions and postpone spending cuts. The U.S. debt inflation to 16 trillion dollars due to a number of factors over the past decade, including tax exemptions under Bush and the war in Iraq and Afghanistan, the recession and the financial crisis and the crisis in the housing sector.

Deficit reduction

Obama said: There is a lot of work to be done in order to reduce the deficit and we will continue to reduce the deficit through a combination of spending cuts and new revenue from the wealthiest Americans. According to media reports, will be the abolition of tax exemptions approved under former President George W. Bush is increase his income to $ 400 thousand per year for individuals and $ 450 thousand per year for families. Obama said he did not receive the Democrats nor the Republicans everything they want in it, but the agreement is the proper thing. Republicans sought to keep in force all tax exemptions even for richer people, while Democrats pressed for higher taxes per person increase his income on the 200 and 250 thousand dollars.

Unemployment benefits

The agreement also extends unemployment benefits for two million long-term unemployed, and also increase the real estate tax. The other part consists of “financial abyss” of discounts on all aspects of public spending for social programs, defense and even by 10% was due to start in the first application in Jan.. But the deal postponed the implementation date for a period of two months, according to media reports.

Wide campaign

Democrats are waging a campaign in order to make those cuts more balanced in order to mitigate the impact of disability on the economy. The tax increases and spending cuts pose a threat to the world’s largest economy that has a painful blow grouped $ 600 billion has lead him to return to recession. Thanks to the first day of the year was a public holiday, reduced the impact of the failure of Congress to reach an agreement by the deadline.

Everyone loser

Despite reaching the Obama administration and members of Congress to the agreement, the situation as a whole does not bode well many with the start of the second term of President Obama and show everyone in the category of loss. The agreement reached in the final minutes of last year did not prevent entering the United States officially known as the “brink of financial” However still before Congress grace period of several days can the move before the onset of serious repercussions of a package of measures the brink of Finance, which economists argue that application means re-American to recession again.

Political crisis

Although most of the parties to agreement that will avoid the “brink of financial,” they also insist on the political losses caused by the failure of the U.S. administration and Congress to reach an agreement to save the American economy from the repercussions of the financial crisis over the past months. Congress has failed to reach an agreement before midnight the day before yesterday, although this deadline specified more than a year ago. At the same time what has been reached in the last minutes of the last year is not always agreement, but “compromise” which means that a new round of conflict between the administration and Congress will begin soon.

Similar scenario

The last days have been a repeat of a similar scenario experienced by the United States 18 months ago when the public purse was on the verge of bankruptcy because of the refusal of Congress to increase the U.S. debt ceiling to allow the continuation of government borrowing to finance the budget deficit. Over the 500 days since the approval of Congress to increase the debt ceiling failed administration and the legislature to reach a solution “balanced” as described by Obama will reduce the budget deficit and the rate of public debt at the same time protects the faltering economy from the repercussions of austerity measures represented in higher taxes and reduce public spending.

Misconduct

And now again Washington appears as if they were barely avoid the economic catastrophe for the second time it is done through prevarication and avoid dealing with the huge problem of spending cuts. Said Joe  Democratic senator: absolutely no excuse for us after that and we found ourselves in this position at this time. For his part, Ali said economic analyst Velchi in Network (CNN..) News that Congress misbehaved in dealing with this crisis it was low already to its lowest level ever. One commented viewers through site posts small “Twitter” by saying: if acted this way in my work I immediately Savsal. Indeed’ll blame the failure to reach agreement on the Republicans, who control the majority of seats in the House of Representatives because they insisted on the need for continued tax exemptions enjoyed by the rich while reducing allocations for social services for the elderly and the poor.

Tax cuts

In contrast, Obama, who insists on the need to abolish the tax cuts enjoyed by the rich finds that winning a second term in the elections held last November evidence of popular support for his position. But the U.S. president was forced to make concessions during the last few weeks before the Republicans who control the House of Representatives, which indicates that President Obama’s second term will not be easy.