US decides to trim govt spending, EU yet to agree on budget discipline
02 Mar 2013
The United States has gone ahead with planned cuts in government spending, to plug a widening fiscal deficit, even as member states of the European Union are still struggling with the proposed budget discipline.
President Obama on Friday signed an order authorising a $85 billion across-the board reduction in US government spending despite Republican objections. But, on the other side of the Atlantic, opposition ruled German states blocked a federal nod for EU fiscal pact on budget discipline.
The bill prescribing spending cuts took the automatic route with the Republicans continuing to insist that increased taxes should be part of the resolution till the Friday deadline, and the President opted to sign it into law.
The spending cuts could see US economic growth cut by over half a percentage point and could cost about 750,000 jobs.
Obama and the Republican majority Congress failed to arrive at a consensus on budgetary cuts and how to address the issue of deficit despite two hours of last-minute talks.
Obama said he was against spending cuts, but had to sign the order late on Friday night as talks failed to solve the issue of budget deficits.
