By Valentin Mândrăşescu
It seems that the US Congress has prepared a new nerve-wrecking thriller for financial markets, federal employees and ordinary Americans. After bringing America to the edge of default, the Congress is not likely to miss the deadlines for adopting the 2014 budget.
NGOs, budget experts, trade unions, activists and business leaders demand that the Congress does its job and end the budgetary standoff before it gets out of hand. Bloomberg quotesMacGuineas, who is also president of the Committee for a Responsible Federal Budget, a fiscal advocacy group.
“The uncertainty has a chilling effect on job creators, households and anybody who’s trying to see around a corner”.
Business executives complain that fiscal and budgetary uncertainty hurts financial markets, decreases the number of available jobs and reduces the US attractiveness for foreign investors.
“It’s a stupid way to run a country,” Maya MacGuineas, head of the Campaign to Fix the Debt, told the press.
Despite the mounting pressure, there is little hope for a timely resolution of the budgetary stand-off. Republicans and Democrats have reignited old feuds and political bickering has replaced constructive negotiations.
Democrats want to end a number of corporate tax breaks but Republicans don’t accept any modifications of the tax code without a broader deal that must include spending reductions.
It is obvious that no broad solution to the fiscal problems of the US can be found before the New Year and therefore transforming budgetary negotiations into a battle of political principles is counterproductive and dangerous.
A compromise will have to be reached but it is highly probable that it will not be achieved before the deadline.
Chris Van Hollen, the top Democrat on the House Budget Committee told Bloomberg that “negotiations have to accelerate significantly if we’re going to get something done”.
However, no acceleration is visible. America will celebrate the New Year without a budget. Again.