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White House, Republicans trade blame over looming spending cuts

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Sept. 15, 2012, 10:05 a.m. | World — by Associated Press

U.S. President Barack Obama
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Associated Press

Associated Press

WASHINGTON, Sept 14 (Reuters) - The White House presented a detailed breakdown Friday of $109 billion in across-the-board spending cuts scheduled for January, setting off a fresh blame game between the Obama administration and Republicans over responsibility for what both say is a preventable budgetary calamity.

The itemization of the so-called "sequestration" plan showed potential pain all around: $11 billion out of the Medicare healthcare program for the elderly, a $15.3 billion cut in defense procurement accounts and hefty cuts to a Department of Agriculture program that supports farm prices.

There was also a cut of $129 million from embassy security, which would be particularly ill-timed in light of deadly attacks on U.S. diplomatic posts in the Middle East, Africa and Afghanistan by Islamic militants in recent days.

The list, in 394 pages, included millions slashed from familiar programs such the National Institutes for Health, the national parks, the Smithsonian and all the regulatory agencies. It could generate new public concerns as the presidential and congressional races enter the home stretch.

For example, the American Cancer Society issued a statement saying the automatic cuts would result in 50,000 fewer low-income and underinsured women being screened for cancer next year.

State and local government officials will read the fine print carefully. For example, payments to issuers of Build America Bonds, a financing tool created as part of the 2009 economic stimulus, will be cut by $255 million, according to the document. The taxable municipal bonds are designed to help finance capital projects.

The reductions, aimed at lowering U.S. budget deficits, would result in a 9.4 percent cut in defense programs and an 8.2 percent reduction in an array of domestic government activities, the White House budget office said.

The sequestration is the result of the failure of Congress and the administration to agree to a long-term deficit reduction package.

DEFENSE INDUSTRY FIGHTING BACK

The broad percentages were no surprise. But until attached to specific programs, the results were difficult for all but skilled lobbyists and corporations to digest. The defense industry mobilized months ago to fight the sequestration, issuing its own studies about the impact.

But many other interest groups and voters have remained on the sidelines.

Congress can undo the cuts at any time but has shown no signs of doing so. The two parties are expected to make another attempt to replace the indiscriminate reductions after the election on Nov. 6.

While adding that it was ready to work with Congress on a replacement plan, the White House said it had done its part and that it was time for lawmakers to do theirs.

"The only thing that has stood in the way (of a deficit-cutting deal) has been the continued refusal of Republicans in congress to accept a more balanced approach to deficit reduction," a senior administration official told reporters.

John Boehner, Speaker of the Republican-controlled House of Representatives, responded in kind, referring to the slashing as "the president's sequester."

Republican presidential candidate Mitt Romney said in a statement that "President Obama invented the sequester, President Obama signed the sequester, and President Obama has failed to show any leadership to stop the sequester."

The White House and the Congress, Democrats and Republicans, including Romney's vice-presidential running-mate Paul Ryan agreed on the automatic, cutting exercise under a deal reached in August, 2011. The cuts were meant to be so painful a prospect they would force Democrats and Republicans to come to terms on a deficit reduction package.

REPUBLICANS FOCUSED ON SECURITY

The cuts are part of the so-called "fiscal cliff" scenario that economists say could throw the country into a new recession. Expiring tax cuts - which if not renewed will take billions out of American pocketbooks next year - are the other side of the cliff.

Top Republicans have focused their criticism largely at the defense reductions, using them in the campaign to accuse the president of hurting national security.

Senate Republican leader Mitch McConnell said the White House report "makes it glaringly clear that those programs most closely related to combat readiness of the (military) force will be severely cut."

"The president needs to provide the leadership to avoid these reductions," McConnell said.

McConnell's statement only addressed concerns about military cuts and did not mention reductions to other domestic programs that would be carried out under the sequestration.

Boehner said the report "confirms that the president's sequester is a serious threat to our national security and must be replaced," he said. "With only a few months before they're scheduled to go into effect, President Obama and Senate Democrats have taken no action whatsoever to avert these cuts."

His comments come amid heightened tensions in the Middle East that saw the deaths of the U.S. ambassador to Libya and three other U.S. officials.

TAX INCREASES AT ISSUE

Democrats and Republicans are deadlocked over the issue of whether the deficit reduction should rely entirely on spending cuts, as Republicans favor, or whether it could include revenue from raising taxes on wealthy Americans, as the president wants. Republicans also object to any cuts to military spending.

The White House attacked Republicans in Congress for offering only "unbalanced solutions" that it said were not "realistic, fair or responsible ways" to avoid the $109 billion meat-ax approach.

This was in response to months of Republican claims that they had approved an alternative in the House of Representatives that the Democratic Senate has ignored.

The Republican alternative would cancel all of the military spending cuts while mandating deep new reductions to domestic programs, including social safety net activities that Democrats want to protect.

A Defense Department spokesman said sequestration "would have devastating effects on important defense and non-defense programs."

"If sequestration is triggered, the Department would be forced to cut $55 billion in 2013 in an across-the-board, senseless manner and it's clear that allowing these indiscriminate cuts would be irresponsible," said Acting Assistant Secretary of Defense for Public Affairs George Little.

Despite the White House offer to work with Congress on a new plan, there is no expectation any such effort would get underway until after the Nov. 6 presidential and congressional elections.

The 394-page document, which was transmitted electronically by the White House, goes line by line through federal agency programs, applying the percentage cuts to achieve the $109 billion in savings.

Most of these programs already have come under the budget knife in previous deficit-reduction laws.

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