Deficit, Tax Hikes | featured news

French President Francois Hollande has set himself a deadline to turn around the economy by the end of 2014, but having hamstrung the effort with tax rises to meet deficit targets, economists doubt his growth goals will ever fly.

Spain's new government said on Friday the public deficit for 2011 would come in at 8 percent of gross domestic product, well above a target of 6 percent, and announced income and property tax hikes and a civil servant wage freeze in response.

Republicans planned sharp cuts to foreign aid and education on Wednesday, while Democrats weighed a tax hike on millionaires, highlighting the yawning divide between the two parties in the budget debate.