Big US budget cuts begin as both sides trade blame

2013-03-03 18:59

WASHINGTON (AP) — President Barack Obama and congressional Republicans have refused 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.

But the Senate's Republican leader said Sunday that the automatic spending cuts that just started to kick in are modest and a step toward curing Washington of its "spending addiction."

Sen. Mitch McConnell said on CNN's "State of the Union" on the across-the-board cuts are not as devastating as some predicted. The Kentucky Republican also said families have had to trim their budgets and can appreciate Washington's step to curb spending.

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."

Still, fear and anger are consuming military communities, where economies are deeply tied to the forces there. Preparing for a worst-case scenario, Navy officials have plans to force mandatory furloughs on roughly 186,000 civilian employees across the country. Shipyards from coast to coast have outlined cost-cutting plans to delay huge maintenance contracts on nuclear submarines and aircraft carriers.

Oklahoma has five military installations. Chris Spiwak, owner of Chequers Restaurant and Pub outside Tinker Air Force Base in Midwest City, said he's afraid he might have to lay off an employee or two.

"We have customers telling us that if they're furloughed, they won't be coming in as much," Spiwak said. "That's their expendable income. They'll be eating at home or bringing their lunches."

And there is widespread uncertainty in Virginia, where many of the 21,000 workers at Newport News Shipbuilding are bracing for the worst. Obama addressed shipyard workers this week about the dangers of the spending cuts.

"Everybody's nervous, worried about what's going to happen," Ronnie Hall, a 27-year-old fleet support apprentice, said before the president spoke.

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.

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