Greg Ip

Articles by The Economist’s U.S. Economics Editor

The budget: The Blair House Project

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The White House and Republicans agree on where to go. They now have to work out how to get there.

May 12th 2011 | WASHINGTON, DC | from the print edition

BUDGET-MAKING in America is an exercise in brinkmanship. Last December Barack Obama and Republican leaders in Congress narrowly avoided a sharp rise in tax rates. Last month they averted a government shutdown with barely an hour to spare. They returned to the table on May 5th with another deadline looming: they must raise the ceiling on the national debt by August, or else make the federal government default on its obligations.

Judging by their public postures, the prospects look poor. On May 9th John Boehner, the Republican speaker of the House of Representatives, called for “trillions, not just billions” of spending cuts as a condition of raising the debt ceiling above its current $14.3 trillion. He suggested he would rather let the government default than fail to cut spending. Mr Obama’s spokesman responded that “maximalist positions do not produce compromise.”

The two sides may not be as far apart as the rhetoric suggests.

Read the entire article here.

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Written by gregip

May 12, 2011 at 3:21 pm

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