Obama Pushes Short-Term Delay of Sequester Cuts
Business + Economy

Obama Pushes Short-Term Delay of Sequester Cuts

REUTERS/Larry Downing

President Obama injected fresh urgency Tuesday morning into discussions over how to avoid deep, automatic cuts to domestic and defense spending that are set to take effect in 10 days.

Speaking at the White House, surrounded by firefighters and other emergency personnel, Obama urged Congress to pass a short-term measure that would delay the cuts, known as the sequester, for a period of time until Congress can pass a permanent fix.

The president chided what he called Congress’s “meat cleaver approach” to reduce the deficit at the cost of hurting the poor and middle class. Washington appears increasingly resigned to allowing the sequester to go ahead.

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In prepared remarks released by the White House earlier, Obama said the jobs of emergency personnel who would appear at Tuesday’s event could be in jeopardy if the sequester takes effect.

“If these cuts go into effect, hundreds of thousands of jobs could be lost and middle class families all across the nation will feel the devastating impact,” the statement said.

He added that Republicans would be blamed for the economic damage from the sequester. “With less than two weeks before these cuts hit, the president will challenge Republicans to make a very simple choice,” the statement said. “[D]o they protect investments in education, health care and national defense or do they continue to prioritize and protect tax loopholes that benefit the very few at the expense of middle and working class Americans?”

Obama favors replacing the sequester with a combination of spending cuts in automatic programs like Medicare and Medicaid and new tax revenue, raised by scaling back tax breaks that benefit the wealthy and select industries, such as energy firms. With a sweeping deal unlikely in two weeks, Obama is pushing for a short-term measure to delay the start of the sequester — such as one proposed last week by Senate Democrats that would use alternative spending cuts and tax hikes to postpone the sequester through the end of the year.

Republicans argue that Obama has focused too much on raising taxes to solve the nation’s debt problem and not enough on cutting spending. While many Republicans are not happy with the depth of defense cuts in the sequester, they are more sanguine about locking in the deep cuts to domestic programs that they have long sought.

While the cuts — the first of $1.2 trillion set to occur over a decade — may start March 1, they would only be felt over time. The cuts could be devastating for government contractors, civilian employees and the overall economy — which economists say could lose 750,000 jobs as a result of the deep reductions in spending.

Senate Democrats last week proposed a $110 billion plan to delay the sequester through the end of the year. The proposal would generate budget savings from spending cuts — including an end to direct payments to farmers as part of agricultural subsidies as well as reduced defense spending — and the introduction of a minimum level of taxation for households earning more than $2 million a year.

The House passed a bill last year to eliminate the defense cuts in the sequester and, in their place, slash spending on domestic programs more deeply.

Neither approach is likely to gain political support in the next two weeks — with lawmakers still on Presidents’ Day recess until next week.

This article originally appeared in The Washington Post.