If you want to understand the next impositions in the American budget dispute must remember the summer of 2011. President Barack Obama and the Republican majority of the House of Representatives argue - even then - on the state budget. They do not find a compromise quickly, threatening the most powerful country in the world insolvency.
On 26 July 2011, Obama's budget expert Jack Lew meets with Harry Reid , leader of the Democrats in the Senate. Lew says he has an idea that could force a compromise. "What's the idea?" Asks Reid.
"Sequestration," says Lew.
Reid bends as if to vomit. Lew's idea means, loosely translated, forced savings. Should President and Parliament can not agree to a date, it is automatically truncated, across all budgets.
Reid, a supporter Obama looks to the ceiling and laments his staff have recently proposed just that: forced savings. "I told them: Get out so that This is sick, the White House is determined to find a resonable way And now you come to me with sequestration..." But then it turned out: even the White House had no better idea.
The anecdote is from the book "The Price of Politics" by Bob Woodward . The automatic cuts that were agreed to in 2011, this Friday, the 1st March enter into force. They are the next chapter in a dispute that began in the fall of 2010: Back then, the Republicans regained the majority in the House, since they are trying to force Obama to save. Which explains why the savings ready, but only if it hits rich and poor alike.
Tax cuts, state bankruptcy
Because the two sides can not agree on long-term public finances overall, things appear as the trustee. Every few months now close deadlines by which new atrocities threaten: tax cuts, state bankruptcy. Recently, New Year's, this was the "budget cliff", with its tax increases. Actually the forced savings would be used at that time to, but it was the first on the March moved. Now the federal government needs to cut spending by 85 billion dollars a year, it is especially true of Defense, but also: prisons, schools, airports.
Washington's policy has been turned into an eternal game of poker. With each new "deadline" of each stock is doing as if the other one has a duty to avert the impending calamity. Who moves first, loses. America is now before a far-reaching austerity measures, but nobody wants to be the dictator.
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