"It's happening because Republicans in Congress chose this outcome over closing a single wasteful tax loophole that helps reduce the deficit"
- Barack Obama, President of the U.S.
The start of automatic spending cuts in the U.S. has not altered a stalemate between Democrats and Republicans on America's fiscal future. Moreover, President Barack Obama and congressional Republicans refused to concede any share of the blame for failing to prevent these cuts. The U.S. economy is facing $85 billion in domestic spending cuts this year and $1.2 trillion over the next decade, which will weigh on both Republicans and Democrats. The huge cuts in defence spending are expected to hurt Republicans, while more dovish Democrats are likely to suffer from cuts in other sectors of government spending like research, education, the Environmental Protection Agency and a potential 2% cut to Medicare providers. Even despite the fact that these cuts will have devastating impact on the economy, and more than a million people will likely lose their jobs, both parties claimed the blame rests squarely on the other for any damage the cuts might inflict.
"None of this is necessary," Obama said. "It's happening because Republicans in Congress chose this outcome over closing a single wasteful tax loophole that helps reduce the deficit."
"However, there was nearly unanimous agreement that some form of deficit reduction should be enacted over the next 10 years," said Bryson, who is also a senior economist at Wells Fargo Securities.
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