Photo Credit: AP/Alex BrandonBy Tom Howell Jr.
The chief of the International Monetary Fund says the U.S. government’s stalemate over spending and its debt limit is “very, very concerning” and could roll back economic progress around the world.
Christine Lagarde, who took over the financial watchdog-and-rescue organization in 2011, said global finance ministers assembled for meetings in Washington last week feeling like Japan had finally turned the corner and that economies in the U.S. and Europe were on the upswing.
“And then they found out that the debt ceiling was the issue,” she said Sunday on NBC’s “Meet the Press.” “They found out that the government had shut down and that there was no remedy in sight. So it really completely transformed the meeting in the last few days.”
Ms. Lagarde, a lawyer from France, added a global perspective to the standoff that has roiled Washington for weeks and befuddled overseas investors who typically view the U.S. as a paragon of financial rectitude.
Instead, Senate leaders are trying to forge a deal that would extend the federal debt limit and end a government shutdown about to enter its third week.
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Budget Talks at Impasse; Democrats Won’t Agree on Spending Cuts
By The Associated Press.
Senate Republicans and Democrats hit an impasse Sunday over spending in their last-ditch struggle to avoid an economy-jarring default in just four days and end a partial government shutdown that enters its third week.
After inconclusive talks between President Barack Obama and House Republicans, Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., took charge in trying to end the crises although no resolution seemed imminent.
“Americans want Congress to compromise,” Reid said at the start of a rare Sunday session in the Senate in which he pressed for a long-term budget deal.
The two cagy negotiators are at loggerheads over Democratic demands to undo or change the automatic, across-the-board spending cuts to domestic and defense programs that the GOP see as crucial to reducing the nation’s deficit.
McConnell insisted that a solution was readily available in the proposal from a bipartisan group of 12 senators, led by Sens. Susan Collins, R-Maine, and Joe Manchin, D-W.Va., that would re-open the government and fund it at current levels for six month while raising the debt limit through Jan. 31.
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