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The House-approved spending plan has no chance of passing in the Senate, where Democrats hold a slim majority. That sets the stage for gridlock until after the November elections when lawmakers will be faced with a number of end-of-the-year deadlines. Romney has proposed broad but largely unspecified spending cuts. He would reduce the federal work force by 10 percent and keep the tax cuts for all incomes, not just families making less than $250,000. Romney is also wants to drop all tax rates by 20 percent. He would curtail deductions, credits and exemptions for the wealthiest to pay for the lower rates, but he does not specify what tax breaks would be trimmed. Tax cuts approved during President George W. Bush's administration are scheduled to expire at the end of December. In addition, a set of automatic spending cuts totaling about $1.2 trillion over 10 years are scheduled to kick in. Both parties oppose the automatic spending reductions because they include deep cuts in defense. However, they have been unable to reach an agreement so far on alternate spending cuts or tax increases that would keep the automatic cuts from taking effect. The International Monetary Fund warned that the U.S. economy could suffer another recession if Congress doesn't do something to avert the so-called "fiscal cliff." The impact could shave 4 percentage points off U.S. growth, the IMF said.
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