Sequester becomes next Washington budget battle

Posted on

President Barack Obama is asking Congress for a short-term deficit reduction package of spending cuts and tax revenue that will delay the effective date of steeper automatic cuts now scheduled to start on March 1.

Obama said Tuesday that the looming cuts would be economically damaging and must be avoided, the Associated Press reported.

The president reiterated his insistence on long-term deficit reduction that combines taxes and cuts, a blend that faces stiff resistance from anti-tax Republicans in Congress.

Obama made his case Tuesday afternoon in the White House briefing room just minutes after the Congressional Budget Office released revised budget projections that showed the deficit will drop to $845 billion this year, the first time during Obama’s presidency that the red ink would fall below $1 trillion.

The budget office also said the economy will grow slowly in 2013, hindered by a tax increase enacted in January and by the automatic spending cuts scheduled to take effect this spring.

It is those cuts that Obama is seeking to put off with less onerous measures. Neither the president nor White House aides specified what those measures should be.

Obama said Congress needs more time to work out a 10-year plan worth more than $1 trillion in deficit reduction. Obama did not place a time span or a dollar amount on the short-term plan. Officials said he will leave that to Congress.

His request comes as some congressional Republicans were signaling that they might allow the automatic cuts to kick in as the only viable means of achieving deficit reduction, even though it cuts into programs they support, such as defense.

The president’s request would continue what has become a common practice in Washington — dealing with fiscal issues in small steps in hopes that over time Congress and the administration are able to agree on broader and more lasting policies. In his remarks, Obama alluded to the incremental nature of the work ahead.

Finding deficit reductions of as much as $85 billion would put off the automatic cuts, known as a “sequester” in government budget language, until the start of the new fiscal year.

Obama has insisted that any efforts to reduce the deficit be “balanced” between spending cuts and new tax revenue. Obama already won about $600 billion in higher taxes at the start of the year and congressional Republicans say they are not about to approve more tax revenue. The Senate has a Democratic majority, but the House is controlled by the GOP.

In a statement earlier in the day, House Speaker John Boehner, R-Ohio, said additional tax hikes were out of the question.

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Comments are moderated and generally will be posted if they are on-topic and not abusive. For more information, please see our Comments Policy.

Vote Today

What are your expectations for the spring and summer selling season?

View Results

Loading ... Loading ...

Search Boats for Sale

Length
Year
Price