Obama to Propose Short-Term Fix to Avert Sequester
By Steven T. Dennis
Feb. 5, 2013, 11:38 a.m.
President Barack Obama will call for a short-term fix Tuesday afternoon to avert across-the-board spending cuts, and he wants new revenue to be part of the deal, according to a White House official.
Obama scheduled a 1:15 p.m. announcement to ask Congress to act to avoid the “deep, indiscriminate cuts to domestic and defense programs” slated to take effect slated to begin taking effect under sequester starting March 1.
“Uncertainty around the sequester is already having a negative impact on our economic growth, and if it was to take effect it would cost hundreds of thousands of American jobs and have devastating impacts on our economy,” the official said.
To give negotiators time to pass a broader deficit and budget package, the official said the president is asking for “a smaller package of spending cuts and tax reforms to avoid the economically harmful consequences of the sequester for a few months. ... While we need to deal with our deficits over the long term, we shouldn’t have workers being laid off, kids kicked off Head Start, and food safety inspections cut while Congress completes the process.”
The sequester, included in the August 2011 deficit reduction agreement between the White House and Congress, would cut some $85 billion from federal programs during the current fiscal year. It is set to begin taking effect March 1.
About $43 billion in those reductions would come in Pentagon spending, and $26 billion would come from nondefense discretionary programs.
The White House last week blamed a 0.1 percent decline in the gross domestic product in the fourth quarter — an unexpected decline led in part by falling federal spending — in part on uncertainty over the sequester.
Obama will also emphasize that while the economy is poised to strengthen this year, “we can’t see another self-inflicted wound from Washington,” the official said.
Speaker John A. Boehner, R-Ohio, earlier Tuesday noted the House in the previous Congress passed plans to replace the sequester. “It’s time for the Senate Democrats to do their work. It’s time for the president to offer his ideas for how to replace the sequester.”
The Senate did not take up the bills the House passed last year, with Democrats saying the proposals were aimed at loading cuts onto domestic discretionary spending while sparing defense spending and avoiding tax revenue to replace any of the reductions.
In a statement, Boehner blamed the sequester on Obama, saying that he “insisted it become law.” And he was cool to the idea of more revenue.
“We believe there is a better way to reduce the deficit, but Americans do not support sacrificing real spending cuts for more tax hikes,” he said. “The president’s sequester should be replaced with spending cuts and reforms that will start us on the path to balancing the budget in 10 years.”
The White House said Obama offered balanced plans to do so in his December negotiations with Boehner. And Press Secretary Jay Carney has said the White House’s December “grand bargain” offer remains on the table.