According to the Financial Times: The $1.2 trillion in
automatic spending cuts that Barack Obama once promised to avert are looking
increasingly likely to occur because of entrenched politics in Washington,
threatening a shock to confidence in the US economy.
Economists have long assumed that the so-called sequester -
a budgetary mechanism passed in 2011 that takes effect on March 1 and slashes
the Pentagon's budget by $600bn over 10 years while cutting discretionary
spending for government programmes by another $600bn - would be replaced or
reversed by Congress.
Many saw a recent move by Republicans on Capitol Hill to
extend the US
borrowing authority as a sign of greater co-operation with the White House. But
conservative lawmakers have recently made it clear that they were simply
gearing up for another fight, and are prepared to take a hard line on the
$1.2tn in cuts even amid objections from military hawks……
Find out more at http://www.cnbc.com/id/100410660
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