The Obama administration is walking a tightrope as far as U.S. finances are concerned because Democrats and Republicans have not yet reached full agreement on the nation's fiscal reform. The U.S. economy appears to be on an upward path as production and employment are recovering and consumer spending including car sales revives.
But a failure to reach an agreement on fiscal reform will put a brake on the U.S. economic recovery, thus negatively impacting the global economy. It is hoped that the Obama administration and congressional leaders stop bickering and settle this important economic issue at an early date.
Currently obligatory federal spending cuts of $1.2 trillion (worth about ¥112 trillion) over 10 years has been put on a two-month freeze. If the freeze ends without any new agreement, the spending cuts will start March 1. Thus the U.S. will face a fiscal cliff — a combination of an end to large-scale tax cuts plus obligatory spending reductions.
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