Millennium Post

Determined to avoid repeat shutdown, US Congressmen clinch 2-yr budget deal

US President Barack Obama hailed the budget deal, which if approved by the Congress, would avoid government shutdown for at least two years.

'Today's (Wednesday) bipartisan budget agreement is a good first step,' Obama said on the deal that was announced after weeks of negotiations between the Republican and Democratic lawmakers.

'This agreement replaces a portion of the across-the -board spending cuts known as 'the sequester' that have harmed students, seniors, and middle-class families and served as a mindless drag on our economy over the last year,' Obama said.

'It clears the path for critical investments in things like scientific research, which has the potential to unleash new innovation and new industries. It's balanced and includes targeted fee increases and spending cuts designed in a way that doesn't hurt our economy or break the iron-clad promises we've made to our seniors,' he said.

Announcing the budget deal, Republican Congressman Paul Ryan said this reduces the deficit by $23 billion. 'And it does not raise taxes, and it cuts spending in a smarter way,' he said.

'I think this agreement is a clear improvement on the status quo. This agreement makes sure that we don't have a government shutdown scenario in January. It makes sure we don't have another government shutdown scenario in October. It makes sure that we don't lurch from crisis to crisis,' Ryan said.

Democratic Senator Patty Murry said the deal puts jobs and economic growth first by rolling back sequestration's harmful cuts to education, medical research, infrastructure investments and defense jobs for the next two years.

'This deal builds on the $2.5 trillion in deficit reduction we have done since 2011 and continues the precedent that we set in the fiscal cliff deal, that sequestration shouldn't be replaced with spending cuts alone,' he said.

'This bipartisan deal will help millions of Americans who are wondering if they were going to keep paying the price for DC dysfunction,' Murry told reporters at a press conference.

House Majority Leader Eric Cantor said this agreement is a step forward consistent with prior Republican attempts to replace the sequester's indiscriminate across-the-board cuts.

EU crisis not yet over: IMF chief Lagarde

BRUSSELS: International Monetary Fund (IMF) Managing Director Christine Lagarde has warned Europe that it is too early to declare victory over its crippling economic crisis and urged fresh efforts to enact much-needed reforms. Speaking at the European Parliament, she noted that the Europe Union has made some progress in tackling the crisis that has brought the economy to its knees but stressed, ‘Looking past the headlines, there are clearly signs that not all is well.’

‘Can we actually argue that the crisis is really well behind us when, at the same time, 12 per cent of the labour force is without a job?’ asked Lagarde. ‘We don’t think it’s appropriate to claim victory and to assume that the crisis is over. More needs to be done and more focus needs to be applied,’ said the IMF chief.

She called on the European Central Bank (ECB), which surprisingly cut interest rates in November, to keep its lending rates low and to act against further declines in inflation. A Banking Union, which finance ministers were thrashing out just metres (feet) away in a separate building, ‘remains a priority’, she said of the plans for a new bank regulatory system. ‘It is critical that the flow of credit on reasonable terms to businesses and households be restored.’ She emphasised that ‘there can be no letting up on reforms and it is not because the euro area will grow at 1 percent that we should just slow down, give up and reduce the pace of reforms. Reforms have to be continued... because they will lead to something that is better.’
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