Case | HBS Case Collection | April 2013 (Revised October 2014)

America's Budget Impasse

by Richard H.K. Vietor

Abstract

In the spring of 2013, Barack Obama faced a difficult budgetary challenge—reducing fiscal deficits over ten years without dampening the weak economic recovery but soon enough to avoid another breach of the debt ceiling, with potential default. Finally, in April, he released his budget—calling for spending cuts and tax hikes adding to $1.8 trillion (over ten years). However, in the preceding two weeks, both the House Republicans and the Senate Democrats had approved budget resolutions that were exceedingly different. Now, amidst flurries over gun control and immigration reform came the time to bargain on the macroeconomy of the United States.

Keywords: United States; competitiveness; stimulus; Budgeting; Competition; Government Legislation; Government Administration; Budgets and Budgeting; Macroeconomics; United States;

Citation:

Vietor, Richard H.K. "America's Budget Impasse." Harvard Business School Case 713-078, April 2013. (Revised October 2014.)