US leaders squabble despite warnings on budget cuts

Agence France-Presse

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With three days to go before the so-called 'sequester' -- $85 billion in across-the-board cuts -- takes effect, federal agencies are tightening belts as feuding lawmakers appear unable to reach a better-tailored deal

The US Capitol in Washington, DC, on January 2, 2013. AFP PHOTO / Saul LOEB

WASHINGTON DC, USA – US President Barack Obama on Tuesday, February 26, warned of potential devastation from looming spending cuts, but the bickering in Washington suggested lawmakers are too far apart to strike a timely compromise.

Even as the Federal Reserve chairman sounded the alarm 72 hours before $85 billion in sequester cuts begin to bite, the president’s top Senate ally said he would prefer the budget ax to a deal that did not raise new tax revenues.

“Until there is some agreement on revenue, I believe we should just go ahead with the sequester,” Senate Majority Leader Harry Reid said.

Not only was a compromise looking increasingly unlikely, but the two parties did not even appear to be negotiating a deal to prevent the mandated cuts, which would slice through popular military and domestic programs.

Obama traveled Tuesday to a Virginia shipyard that builds nuclear-powered aircraft carriers and submarines for the US Navy, amid fears the cuts will damage America’s defense readiness.

“These cuts are wrong, they are not smart, they are not fair,” Obama said in a vast assembly hall at Newport News Shipbuilding.

“They are a self-inflicted wound that doesn’t have to happen.”

But Republicans accused Obama of exploiting the military and refused to accept his demand to raise more taxes on the rich and corporations as part of the solution.

Fed chairman Ben Bernanke, in prepared testimony to Congress, cited data from the Congressional Budget Office predicting that the cuts in defense and discretionary domestic spending could reduce economic growth by 0.6 percent.

“The Congress and the administration should consider replacing the sharp, front-loaded spending cuts required by the sequestration with policies that reduce the federal deficit more gradually,” he said.

“Given the still-moderate underlying pace of economic growth, this additional near-term burden on the recovery is significant.”

The White House has warned of a “perfect storm” of widespread furloughs, nationwide airport delays and less secure US borders, and says pre-school programs could be canceled, teachers laid off and public services curtailed.

Republicans accuse the president of resorting to scare tactics and are balking at raising new revenue, after losing a showdown with the newly re-elected president late last year over raising tax rates on the rich.

They are willing to close loopholes, but only in the context of a sweeping overhaul of the tax system which could see rates for the wealthy fall.

Republican House Speaker John Boehner accused Obama of using “military men and women as a prop in yet another campaign rally to support his tax hikes.”

And he denied Republicans had done nothing to stop the sequester, as the House has voted twice to reframe the cuts — though the bills lacked the revenue hikes Obama demands.

“We should not have to move a third bill before the (Democratic-led) Senate gets off their ass and begins to do something,” Boehner boomed.

Several attempts were underway in Congress to give Obama authority to spread the cuts more evenly, but some Republicans saw such moves as an abrogation of their fiscal responsibilities.

Reid introduced a Democratic bill to replace the sequester and wants it brought to a vote Thursday, while Republicans could introduce a competing version with a possible vote later this week.

The painful, automatic budget cuts were envisioned as a mechanism to defuse a previous spending showdown by forcing both sides into a deal to cut the deficit, but Washington is so dysfunctional that no agreement has been reached.

Senate Minority Leader Mitch McConnell said Obama was blaming political rivals for the consequences of his own actions.

“The president’s been running around acting like the world’s going to end because Congress might actually follow through on an idea he proposed and signed into law — all the while pretending he’s somehow powerless to stop it.”

The White House argues that Republicans are equally to blame, as the sequester was passed by Congress before Obama signed it into law.

There seems little prospect that Washington’s feuding politicians will agree to halt the sequester before it comes into force on Friday.

The first point of possible compromise may then come with a “continuing resolution” bill due at the end of March to fund the government’s operations.

Republican Senator Lamar Alexander expressed what many in Washington see as the only way out of the mess: a budget bill that subtracts the value of the $85 billion sequester.

“Instead of a continuing resolution at the end of the next month, we’d have a bill that took care of both the sequester and the continuing resolution,” he said. –

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