US Budget Deadlock Dissolving

Treasury Secretary Jacob Lew was upbeat Thursday on the prospects of a grand-bargain deficit deal with congressional Republicans.

Lew told the House Ways and Means Committee that the two sides were only “two turns of the wheel” from reaching a deal last December.

“I think we are so close to getting an agreement…that I am still an optimist,” Lew said.

Outside observers remain skeptical.

Greg Valliere, chief political strategist at Potomac Research Group, said the most that could be hoped for was a modest deal to extend the debt ceiling until after the November 2104 mid-term congressional elections.

Lew defended President Barack Obama’s new $3.77 trillion budget as “a serious proposal at a serious time.”

“There is a path to a bipartisan agreement that moves the country forward,” Lew said. in remarks prepared for delivery to the House Ways and Means Committee.

The Obama budget would cut entitlement programs, a move that has angered some Democrats, and also proposes higher taxes on the wealthy, which has angered Republicans.

Lew repeated that entitlement savings are contingent on Republicans agreeing to higher taxes.

“The two cannot be separated, and were not separated last December when we were close to a bipartisan agreement” on a long-term budget plan, Lew said.

MarketWatch

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.