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WASHINGTON: The US government stumbled headlong yesterday toward wide-ranging spending cuts that threaten to hinder the economic recovery, after President Barack Obama and congressional leaders failed to find an alternative budget plan.
Put in place during a bout of deficit-reduction fever in 2011, the automatic cuts can only be halted by agreement between Congress and the White House.
A deal proved elusive in talks at the White House yesterday as expected, meaning that government agencies will now begin to hack a total of $85 billion from their budgets between Saturday and October 1. Financial markets in New York shrugged off the stalemate in Washington.