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President Obama signs order to begin spending cuts
First Published Mar 01 2013 08:47 am • Last Updated Mar 01 2013 09:57 pm

Gridlocked once more, President Barack Obama and Republican congressional leaders refused to budge in their budget standoff Friday as $85 billion in across-the-board spending cuts bore down on individual Americans and the nation’s still-recovering economy. "None of this is necessary," said the president after a sterile White House meeting that portended a long standoff.

Obama formally enacted the reductions a few hours before the midnight deadline required by law. Yet their impact had been felt thousands of miles away well before then. In Seattle, the King County Housing Authority announced it had stopped issuing housing vouchers under a federal program that benefits "elderly or disabled households, veterans, and families with children."

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At a glance

Herbert: “Butt-biting time”

Gov. Gary Herbert said Thursday that he expects the sequestration to kick in at the end of the week and the $85 billion in cuts will hurt, but are necessary.

“We have always said that if we continue to [borrow and spend] it’s going to come back and bite us in the butt,” Herbert said. “Its butt-biting time right now. So we’re going to find some pain. We’re going to find some inconveniences here.”

However, Herbert compared the spending and debt problem in the country to a tumor, and said that while it may be painful, its best to have the tumor removed before it does more damage.

In the long-run, the governor said gaining some fiscal stability will provide certainty to the economy and help spur long-term growth.

Next steps in budget battle

Aside from the wrangling over automatic spending cuts, the White House and Congress are looking ahead to several more budget battles in the coming weeks. They include:

AVOIDING GOVERNMENT SHUTDOWN

Lawmakers and the White House face a March 27 deadline to prevent a partial shutdown of government agencies. That’s when a six-month stopgap funding bill passed last fall runs out. The GOP-led House plans the week of March 4 to approve a plan that would include new line-by-line budgets for the Pentagon and the Department of Veterans Affairs while keeping domestic agencies on autopilot, frozen at last year’s levels. Senate Democrats would like to incorporate more detailed spending bills for domestic programs but may face opposition from Republicans wary of concocting a foot-tall omnibus spending bill.

2014 BUDGET PLANS

In mid-March, both the House and Senate are expected to debate rival budget plans. These budget resolutions are nonbinding but represent an important statement of party principles. The House GOP plan promises a balanced budget by the end of a decade without raising taxes; the alternative by Senate Democrats is expected to mix in new revenues and not show balance. The two sides are not expected to be able to reconcile their differences, which promises to make it difficult to pursue follow-up legislation like the 12 annual appropriations bills.

OBAMA’S BUDGET

In mid-late March, President Barack Obama is expected to release his budget — over a month behind schedule. Budget observers will be watching for new initiatives that might help spur budget negotiations. But if he follows past practice, Obama’s budget will take few, if any, political risks.

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The president met with top lawmakers for less than an hour at the White House, then sought repeatedly to fix the blame on Republicans for the broad spending reductions and any damage that they inflict. "They’ve allowed these cuts to happen because they refuse to budge on closing a single wasteful loophole to help reduce the deficit," he said, renewing his demand for a comprehensive deficit-cutting deal that includes higher taxes.

Republicans said they wanted deficit cuts, too, but not tax increases. "The president got his tax hikes on Jan. 1," House Speaker John Boehner told reporters, a reference to a $600 billion increase on higher wage earners that cleared Congress on the first day of the year. Now, he said after the meeting, it is time take on "the spending problem here in Washington."

Senate Republican leader Mitch McConnell of Kentucky was equally emphatic. " I will not be part of any back-room deal, and I will absolutely not agree to increase taxes," he vowed in a written statement.

At the same time they clashed, Obama and Republicans appeared determined to contain their disagreement.

Boehner said the House will pass legislation next week to extend routine funding for government agencies beyond the current March 27 expiration. "I’m hopeful that we won’t have to deal with the threat of a government shutdown while we’re dealing with the sequester at the same time," he said, referring to the new cuts by their Washington-speak name.

Obama said he, too, wanted to keep the two issues separate.

Under the law, Obama had until midnight to formally order the cuts. Barring a quick deal in the next week or so to call them off, the impact eventually is likely to be felt in all reaches of the country.

The Pentagon will absorb half of the $85 billion required to be sliced between now and the end of the budget year on Sept 30, exposing civilian workers to furloughs and defense contractors to possible cancellations. Said Defense Secretary Chuck Hagel, only a few days on the job: "We will continue to ensure America’s security" despite the challenge posed by an "unnecessary budget crisis."


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The administration also has warned of long lines at airports as security personnel are furloughed, of teacher layoffs in some classrooms and adverse impacts on maintenance at the nation’s parks.

The announcement by the housing agency in Seattle was an early indication of what is likely to hit as the cuts take effect. It said it was taking the action "to cope with the impending reduction in federal funding," adding that it normally issues 45 to 50 vouchers per month.

After days of dire warnings by administration officials, the president told reporters the effects of the cuts would be felt only gradually.

"The longer these cuts remain in place, the greater the damage to our economy — a slow grind that will intensify with each passing day," he said. Much of the budget savings will come through unpaid furloughs for government workers, and those won’t begin taking effect until next month.

Obama declined to say if he bore any of the responsibility for the coming cuts, and expressed bemusement at any suggestion he had the ability to force Republicans to agree with him.

"I am not a dictator. I’m the president," he said. "So, ultimately, if Mitch McConnell or John Boehner say we need to go to catch a plane, I can’t have Secret Service block the doorway, right?" He also declared he couldn’t perform a "Jedi mind meld" to sway opponents, mixing Star Wars and Star Trek as he reached for a science fiction metaphor.

Neither the president nor Republicans claimed to like what was about to happen. Obama called the cuts "dumb," and GOP lawmakers have long said they were his idea in the first place.

Ironically, they derive from a budget dispute they were supposed to help resolve back in the fall of 2011. At the time, a congressional Supercommittee was charged with identifying at least $1.2 trillion in deficit savings over a decade as part of an attempt to avoid a first-ever government default. The president and Republicans agreed to create a fallback of that much in across-the-board cuts, designed to be so unpalatable that it would virtually assure the panel struck a deal.

The Supercommittee dissolved in disagreement, though. And while Obama and Republicans agreed to a two-month delay last January, there was no bipartisan negotiation in recent days to prevent the first installment of the cuts from taking effect.

It isn’t clear how long they will last.

Of particular concern to lawmakers in both parties is a lack of flexibility in the allocation of cuts due to take effect over the next few months. That problem will ease beginning with the new budget year on Oct. 1, when Congress and the White House will be able to negotiate changes in the way the reductions are made.

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Hagel vows budget cuts won’t erode US military

The Pentagon will not let an impending $46 billion in budget cuts erode U.S. military power, Defense Secretary Chuck Hagel said Friday. He said the cuts will “cause pain” but insisted that they can be managed without hurting national security.

At his first news conference since taking over for Leon Panetta as Pentagon chief, Hagel struck a more relaxed tone about the budget reductions, which are part of $85 billion in government-wide spending cuts that were taking effect Friday at midnight.

Whereas Panetta had warned of “catastrophic” effects that could reduce America to the status of a “second-rate” military power, Hagel said he believed the budget crisis can be managed in ways that do not put U.S. national security in jeopardy.

Hagel said the U.S. is “the best fighting force, the most capable fighting force, the most powerful fighting force in the world. The management of this institution, starting with the Joint Chiefs, are not going to allow this capacity to erode.”

Shortly before meeting with reporters, Hagel met for a little over an hour with the chiefs of each of the services, plus the chairman of the Joint Chiefs, Gen. Martin Dempsey, to discuss budget issues.

Hagel said numerous actions will be taken in coming days by the Army, Navy, Air Force and Marine Corps to begin meeting the requirement for $46 billion in budget savings by the end of the budget year on Sept. 30. He said thousands of defense civilian workers, for example, will be notified later this month that they could be required to take one day of unpaid leave per week through September.

“I know that these budget cuts will cause pain, particularly among our civilian workforce and their families,” Hagel said. “I’m also concerned, as we all are, about the impact on readiness that these cuts will have across our force. For these reasons, the department’s senior leadership and I will continue to work with the administration and Congress to help resolve this uncertainty.”



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