Barrack Obama at summit

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Barrack Obama at summit

Sunday, President Obama tried to convince the audience about the benefits of a $4 trillion deal that would help the government to take the control over the deficits. Despite his arguments, the congressional leaders still don’t agree about the spending and the taxes that should be applied.
Although the negotiators agreed to be part of a meeting today, no significant progress was registered. On one side were the republicans which don’t want to agree to a deal that will cut the deficit if that means introducing an additional tax revenue.
This negotiation is highly important because the treasury officials have already informed that a decision about the ceiling debt must be taken by August 2. The Congress wants to be able to increase the ceiling to $14.3 trillion and in order to make sure it will have enough money to pay its bills next month needs to come to an agreement with all the parties involved by July 22.
Considering that the deadline is 10 days away, many have asked President Obama if he is confident about the possibility. The president just said: “We need to”.
Conservatives consider that the only way to increase revenues is by increasing taxes and that’s the main inconvenience that prevents the Congress from taking a final decision. The compromise solution involves striking a deal that doesn’t involve an ambitious level of spending cuts. A level of $2.5 trillion would be enough to determine the Congress to support the raise of the ceiling debt.
Some consider that a smaller deal like this would be even harder to achieve. That’s because such a deal would mostly involve reducing spending cuts on a large scale that will most likely affect every federal agency. A victim of the reduction will most likely be the Medicaid program that has been designed to help low-income and disabled Americans. If this were to happened, the protectors of the program, the Democrats would be against the deal. In addition, the Republicans and the Conservatives which also feel that deeper cuts are required will also be displeased with the compromise.
The budget experts believe that the cuts should be directed towards agriculture subsidies and federal pensions and should be doubled by new fees. But even so, getting to the point where all the parties will agree upon a final package will still be a challenge mostly because it’s almost impossible to come up in such a short amount of time with a brand new source of revenue.

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