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Obama's Deficit-Reduction Plan Hindered

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TEHRAN, July 10 (ICANA) – The Republicans have withdrawn form a bipartisan effort to craft a broad 4-trillion-dollar deficit-reduction deal as part of a plan to avoid a government default.
Sunday, July 10, 2011 11:57:37 PM
Obama's Deficit-Reduction Plan Hindered

House Speaker John Boehner has announced that the house would only consider a USD 2 trillion package, half the amount that President Barack Obama was seeking.

America, still grappling with the repercussions of the previous economic downturn could be propelled into a fresh recession, should the congressmen fail to arrive at a consensus on the debt limit by August 2, the deadline for raising the debt ceiling.

"Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes," Boehner stated in a phone conversation on Saturday, a day before the Obama administration and the congressional leaders are due to meet.

Boehner's comments have raised the gloomy prospect of the congressmen failing to reach a compromise on raising the government's debt limit.

Obama's rare Sunday meeting would be his second in four days, itself indicative of the gravity of the situation.

The Democrats are calling for an increase in tax revenue and an end to the tax cuts made in the Bush era for the wealthier Americans. This is while the Republicans are against any tax increase and advocate a reduction of civil services such as Social Security and Medicare.

While the country is facing austerity measures and a huge debt crisis, the US House of Representatives recently approved a USD 649 billion military spending bill, increasing the Pentagon budget.

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