Dark clouds hang over the U.S. Capitol in Washington, D.C. (Bloomberg)
WASHINGTON (AP) ― President Barack Obama and congressional Republicans refused Saturday to concede any share of the blame for failing to stave off automatic spending cuts that will slash $85 billion in federal spending.
The still-fragile U.S. economy braced itself for the gradual but potentially grave impact of the across-the-board cuts, which took effect Friday night at the stroke of Obama’s pen. Hours earlier, he and congressional leaders emerged from a White House meeting no closer to an agreement.
Even as Democrats and Republicans pledged a renewed effort to retroactively undo the spending cuts, both parties said the blame rests squarely on the other for any damage the cuts might inflict. There were no indications that either side was wavering from entrenched positions that for weeks had prevented progress on a deal to find a way out: Republicans refusing any deal with more tax revenue and Democrats snubbing any deal without it.
“None of this is necessary,’’ Obama said in his weekly radio and Internet address Saturday. “It’s happening because Republicans in Congress chose this outcome over closing a single wasteful tax loophole that helps reduce the deficit.”
The president said the cuts would cause “a ripple effect across the economy” that would worsen the longer they stay in place, eventually costing more than 750,000 jobs and disrupting the lives of middle-class families.
Obama and the Republicans have been fighting over federal spending since the opposition party regained control of the House of Representatives in the 2010 midterm elections. The budget cuts were designed in 2011 to be so ruthless that both sides would be forced to find a better deal, but they haven’t despite two years to find a compromise.
The $85 billion in cuts apply to the remainder of the 2013 fiscal year, which ends Sept. 30. But without a deal they will continue slashing government spending by about $1 trillion more over a 10-year period.
The immediate impact of the spending cuts on the public was uncertain.
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. Defense Secretary Chuck Hagel, only a few days on the job, said: “We will continue to ensure America’s security” despite the challenge posed by an “unnecessary budget crisis.”
In the Republican-controlled House of Representatives, the party’s lawmakers washed their hands of the mess, arguing that bills they passed in the last Congress to avert the cuts absolved them of any responsibility. Those bills passed with little to no Democratic support and were never taken up by the Senate.
Obama was holding out hope that as Americans start feeling the effects of the sequester ― Washington’s term used for the automatic spending cuts ― public pressure will force lawmakers back to the table. Ever wary that such fiscal fiascos could jeopardize the rest of his second-term agenda, Obama vowed in his weekly address to keep pushing reforms on immigration, preschool, gun violence and transportation.
But attention was already turning to the next major budget hurdles, with less than a month to negotiate a funding plan to avert a government shutdown after March 27 and a debt-ceiling clash coming in May.
Hopes that a measure to undo the spending cuts could be wrapped into a March deal to keep the government running dimmed Friday when both Obama and House Speaker John Boehner said they’d prefer to keep the two issues separate.
Boehner said Friday the House will pass legislation next week to extend routine funding for government agencies beyond the current March 27 expiration.
Obama said he, too, wanted to keep the two issues separate.
If the parties can manage to avoid a government shutdown, yet another fiscal fight looms.
In May, Congress will confront a renewed standoff on increasing the government’s borrowing limit ― the same the issue that, two years ago, spawned the law forcing the current spending cuts in the first place.
Failure to raise the borrowing limit could force the U.S. to default on debt for the first time in history.
Obama suggested he was content to leave the cuts in place until Republicans change their minds about raising taxes by closing loopholes.
Many conservatives, meanwhile, are willing to accept the cuts as the only way to reduce government spending, even though the budget knife cuts into cherished defense programs.