In a time of downturned economies all around the world, the US government has finally reached a budget agreement for their fiscal year that ends September 30th. Until this week, the US government had been operating without a budget and had only managed to keep open by passing numerous contingencies since last October. On April 8th, just minutes before a potential US government shutdown, an agreement was reached between parties and on April 14th the bill was finally passed in both the Congress and the Senate. The final bill now will hit President Obama’s desk to be signed into law.
Final Budget Figures
The budget, despite conservative’s disappointment, cuts just $38 billion in spending for the remainder of the fiscal year, still leaving the US very near their deficit cap which they are expected to break by mid May under current spending levels. The overall budget for the US fiscal year comes in at 1.049 trillion, which is 78.5 billion less than the budget first proposed by Obama last year.
While the US government and citizens alike are happy to finally have a budget, at the same time there is not huge optimism as these small cuts are just the beginning and larger ones will need to follow. In the midst of what many now are saying is a global financial crisis, the US has numerous cuts to make in the very near future. Looking at the difficulties they had just to pass this year’s budget, the road ahead will probably be even more challenging.
One current issue that will have to be decided in the very near future for the US is whether or not they will raise their deficit limit. Conservative republicans have come forward and said that they will not vote for such a measure unless there is some type of agreement and a plan for broad spending cuts. The debt ceiling currently allowed by the US government is 14.3 trillion which could be broken as early as May.
What Happens Now?
Looking ahead to the next fiscal year, US President Obama has a plan to start reducing the country’s debt. His proposed initiatives would cut the debt by four trillion over the next twelve years. The US congress will be faced with some very tough decisions in order to make sure that the current debt levels do not get passed on to future generations. Being able to better balance the government’s checkbook will help to bring the US out of the current recession and at he same time give the US a competitive edge globally.
According to the home page for the White House:
The President’s 2012 Budget is a responsible approach that puts the nation on a path to live within our means so we can invest in our future – by cutting wasteful spending and making tough choices on some things we cannot afford, while keeping the investments we need to grow the economy and create jobs. It targets scarce federal resources to the areas critical to winning the future: education, innovation, clean energy, and infrastructure. And it proposes to reform how Washington does business, putting more federal funding up for competition, cutting waste, and reorganizing government so that it better serves the American people. It was firstly helping people to use repayments calculator home loan and they were getting happy to get in peace.
Australians and others around the world will be watching in the coming months to see what steps the US takes next as they continue to fight for an economic recovery while at the same time slashing government spending. Will the US raise their debt ceiling? Will they make deep enough cuts in the 2012 budget to get them on the path to stable finances? We will just have to wait and see. People who have been availing home loan repayment calculators are also stopped a bit to watch for the new changes.
http://www.abc.net.au/news/stories/2011/04/15/3192149.htm
http://www.washingtonpost.com/business/economy/house-debates-gop-budget-plan-sets-vote-on-deal-that-averted-shutdown/2011/04/14/AFNJALdD_story.html
http://www.whitehouse.gov/omb/budget
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