Skip to content
Catholic Online Logo

By Catholic Online (NEWS CONSORTIUM)

11/21/2011 (3 years ago)

Catholic Online (www.catholic.org)

Failure to reach agreement will trigger an automatic 'sequester'

A deadline looms this coming Wednesday. If a "super committee" comprised of both Republican and Democratic lawmakers fail to reach a plan in order to reduce the U.S. deficit, economists warn of dire consequences.

Failure to reduce the deficit could trigger another rating's agency downgrade, economists warn. 'With all this pressure to reach an agreement, it really doesn't look good if they can't find a solution,' Paul Ashworth, chief North American economist at Capital Economics says.

Failure to reduce the deficit could trigger another rating's agency downgrade, economists warn. "With all this pressure to reach an agreement, it really doesn't look good if they can't find a solution," Paul Ashworth, chief North American economist at Capital Economics says.

Highlights

By Catholic Online (NEWS CONSORTIUM)

Catholic Online (www.catholic.org)

11/21/2011 (3 years ago)

Published in Business & Economics

Keywords: Super committee, cuts, deficit, economists, downgrade


LOS ANGELES, CA (Catholic Online) - The committee is tasked with drawing up plans for a $1.2 trillion reduction in the nation's deficit. Failure to do so will trigger an automatic "sequester" that will make cuts of that size to defense and social welfare programs beginning in 2013. Both Republican and Democrats seem distant from finding a solution after clashing over tax revenues.

The super committee has until Monday to tell the Congressional Budget Office about the impact any plan they send to Congress will have on the budget.

"Time is running out. What I can say is we are leaving no stone unturned, negotiations continue and we are looking to find a way. We recognize what's at stake and we're hoping to reach an agreement," Democrat committee member Chris Van Hollen said.

Reducing the massive deficit is relatively small. Just 0.7 percent of the gross domestic product in 2013 needs dialing back. Failure to do so could trigger another rating's agency downgrade, economists warn.

"With all this pressure to reach an agreement, it really doesn't look good if they can't find a solution," Paul Ashworth, chief North American economist at Capital Economics says.

Ashworth says that the U.S. had much more serious problems that would need tackling first.

"The U.S. is already spending 7 percent of GDP on Medicare and Medicaid [the government-run health schemes] and that will be up to 10-11 percent in the next two decades. Debt is on an unsustainable path, and if they can't reach an agreement on this, it doesn't look good for the future," he adds.

Ratings agency Standard & Poor's cited the "extremely difficult" political conditions in Washington when it made the controversial decision to downgrade its rating on US debt in August. The firm also put the U.S. "on watch' meaning further cuts may wait in the wings.

Morgan Stanley analyst Christine Tan predicted earlier this month that there was now a one-in-three possibility of another downgrade.

"If the super committee fails to reach a $1.2tn deficit reduction deal, if such a deal relies more upon accounting changes than real deficit reduction, or if congressional action lessens the impact of the $1.2tn automatic trigger, we believe this could potentially provide S&P with a pretext to downgrade the US further from AA+ to AA," wrote Tan.

---


Pope Francis: end world hunger through 'Prayer and Action'


Copywriter 2015 - Distributed by THE NEWS CONSORTIUM

Pope Francis Prayer Intentions for March 2015
Universal:
Scientists: That those involved in scientific research may serve the well-being of the whole human person.
Evangelization: Contribution of women: That the unique contribution of women to the life of the Church may be recognized always.


Rosaries, Crosses, Prayer Cards and more... by Catholic Shopping .com


Comments


More Business & Economics

Federal taxes unbelievably through the roof for February Watch

Image of Uncle Sam took in a lot of cabbage for the first few months of 2015. Why is the U.S. still trailing a momentous deficit, then?

By Catholic Online (NEWS CONSORTIUM)

Uncle Sam took in a lot of cabbage for the first few months of 2015. Inflation-adjusted federal tax revenues hit a record $1,185,613,000,000 in the first five months of fiscal 2015. Why is it that the U.S. federal government still ran a $386,537,000,000 deficit ... continue reading


Top 10 most financially important cities in the world Watch

Image of

By Hannah Raissa Marfil (NEWS CONSORTIUM)

New York City is still the most important center in the financial world, according to the latest ranking made by the Long Finance in The Global Financial Index 17. In the latest rankings, it was observed that more cities in Asia are becoming important within the world ... continue reading


Apple topples AT&T from Dow Jones in reflection of iPhone's dominant position Watch

Image of The move by S&P Dow Jones Indices had been widely anticipated since a seven-for-one stock split in June 2014.

By Catholic Online (NEWS CONSORTIUM)

Largest company in the world, Apple will join the Dow Jones Industrial Average to replace AT&T. The change reflects the dominant position of the iPhone maker in the U.S. consumer economy today. The figures tell the tale: Apple has a market capitalization of ... continue reading


'Underage Red': Sephora shocks consumers with inappropriately named lipstick shades Watch

Image of

By Hannah Raissa Marfil (NEWS CONSORTIUM)

With lipstick shades called "Underage Red" and "Lolita," the cosmetic retailer brand Sephora is under fire once again. Using names that refer to young girls being described in a sexualized manner, the lipstick shades grabbed the attention of shoppers, eventually ... continue reading


Oprah Winfrey sadly shuts down Harpo Studios forever Watch

Image of 61-year-old, Oprah Winfrey continues to play an active role in Hollywood, despite the ending of her talk show and now Harpo Studios.

By Abigail James (NEWS CONSORTIUM)

Oprah Winfrey is set to shut down production at her Chicago-based Harpo Studios by the end of 2015. After much thought, the billionaire mogul has decided production for her personal network OWN will be better done in Hollywood. LOS ANGELES, CA (Catholic Online) - The ... continue reading


SHINY, RED APPLE: Computer giant is now twice as big as world's second largest firm, ExxonMobil Watch

Image of Strong sales of the larger-screened iPhones resulted in the largest quarterly profit reported by a company, with device sales rising 29.5 percent in the final three months of 2014 to $74.6 billion,

By Catholic Online (NEWS CONSORTIUM)

How big is Apple? The creator of the iPhone and tablets is SO BIG that it is now currently twice as big as its second-closest rival, ExxonMobil. This is being reflected in the stock market, where shares in Apple jumped 2.7 percent at the start of the week to ... continue reading


WHERE IS YOUR MONEY GOING? Government collects $1 trillion from taxpayers - and there's still a deficit! Watch

Image of Where is all of our hard-earned money going?

By Catholic Online (NEWS CONSORTIUM)

Where is all of our hard-earned money going? Real federal tax revenues for the first time ever topped $1 trillion in the first four months of the fiscal year, October through January, according to data released Wednesday by the U.S. Treasury. LOS ANGELES, CA ... continue reading


80 MILLION Americans have their privacy invaded in Anthem data breach Watch

Image of An internal investigation, days later verified that the company was a victim of a cyber-attack, the company said, and federal authorities were alerted.

By Catholic Online (NEWS CONSORTIUM)

Insurance giant Anthem suffered a massive security breach when hackers broached computer safeguards and mad a wild data grab. Up to 80 million Americans have had their privacy effectively invaded, although authorities say more sensitive information was not ... continue reading


Electronic giant RadioShack files for bankruptcy - but will keep some stores open Watch

Image of The Chapter 11 filing, made in federal bankruptcy court in Delaware, surprised few. RadioShack had not turned a profit since 2011.

By Catholic Online (NEWS CONSORTIUM)

RadioShack, an iconic, 94-year-old electronics chain has filed for bankruptcy protection. The company has decided to sell up to 2,400 of its stores to the wireless service provider Sprint and a hedge fund that is its biggest shareholder. LOS ANGELES, CA ... continue reading


Is your bank account suffering? Here are 5 INCREDIBLY EASY TIPS on how to save money! Watch

Image of

By Abigail James (NEWS CONSORTIUM)

Saving money is not a simple task. It is hard to resist eating out or buying the hottest new music. How can your savings account grow when spending money is so easy in today's world? LOS ANGELES, CA (Catholic Online) - Whether you're planning on moving or looking to ... continue reading


All Business & Economics News

Newsletters

Newsletter Sign Up icon

Stay up to date with the latest news, information, and special offers

Daily Readings

Reading 1, Isaiah 49:1-6
1 Coasts and islands, listen to me, pay attention, ... Read More

Psalm, Psalms 71:1-2, 3-4, 5-6, 15, 17
1 In you, Yahweh, I take refuge, I shall never be put ... Read More

Gospel, John 13:21-33, 36-38
21 Having said this, Jesus was deeply disturbed and ... Read More

Saint of the Day

Saint of the Day for March 31st, 2015 Image

St. Benjamin
March 31: St. Benjamin, Martyr (Feast Day - March 31) The Christians in ... Read More

Inform, Inspire & Ignite Logo

Find Catholic Online on Facebook and get updates right in your live feed.

Become a fan of Catholic Online on Facebook


Follow Catholic Online on Twitter and get News and Product updates.

Follow us on Twitter