The countdown for the first bankruptcy in US history is running. Less than a week before the predicted default on 2nd August the two parties Democrats and Republicans are further divided on any rescue plan than a week ago. Republicans are holding to their guns with Mr Boehner Republican Leader in the House honestly holding to his plan to cut one trillion in spending and give one trillion to cover deficit but stiffly refusing to yield to the demand of creating new revenues by raising taxes which would hurt those at the higher scales of the income and salaries in the US. President Obama is adamant and has not agreed to this proposal but is supporting a plan by Senator Harry Reid who offered a 2.7 trillion spending cuts this time without creating any new revenues while holding that Medicare & Medicaid should be protected from heavy cuts. At the heart of the cuts according to Senator Reid would be military expenses.
Republicans denounced this as not only gimmick but jugglery of figures because reduction of military spending in Iraq and Afghanistan which has been included was a reduction which would come anyway and was therefore no real cut. At the back of all this is also the fate of Obama and the Democrats who need the lifting of the spending ceiling until at least after the forthcoming elections in November 2012. In any case Obama has shown a lot of weakness in this fight and whatsoever the outcome it would probably cost him the second term in next election.
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