Spending Cuts, Trillion | featured news

As automated federal spending cuts take effect, projected red ink for the next decade has been reduced by about $4 trillion. But this wasn't how Democrats or Republicans wanted to do it.

The U.S. Treasury Department will begin taking steps this week to delay hitting the government's $16.4 trillion borrowing limit. The government is facing a crunch on the debt ceiling because the issue has become ensnarled in talks to avoid some $600 billion in tax hikes and spending cuts due to begin in early January. Failing to raise the debt ceiling could cause the government to default on its debt.

The federal government recorded a $1.3 trillion budget deficit in fiscal 2011, the same as the previous fiscal year, the Congressional Budget Office said.

A Republican plan for the 2012 budget would cut more than $4 trillion over the next decade, more than even the president s debt commission proposed, with spending caps as well as changes in the Medicare and Medicaid health programs, its principal author said Sunday.

President Barack Obama is sending Congress a $3.73 trillion spending blueprint that pledges $1.1 trillion in deficit savings over the next decade through spending cuts and tax increases.