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Talks fail, US budget austerity sets in

President Barack Obama and congressional Republicans failed to find a compromise that would have blocked an $85 billion budget reduction. Now, spending cuts will start to hit the US military and a vast array of other government programs.

 

Both Obama and the Republican leaders in the House and Senate declared themselves still deadlocked after a last-minute White House meeting Friday. The two sides are at odds over the president's insistence on increasing tax revenue as part of any plan for attacking the country's $16.6 trillion indebtedness. (AP)