Finger-pointing continues as automatic US budget cuts kick in

By Agencies in Washington | China Daily | Updated: 2013-03-04 07:52

US 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 over nearly seven months.

The still-fragile US economy braced itself on Saturday for the gradual but potentially grave impact of the across-the-board cuts, which took effect on 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 have 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 on 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 will cause "a ripple effect across the economy" that will 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 Republicans 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 on Sept 30. But without a deal, they will continue slashing government spending by about $1 trillion more over a 10-year period.

The economic effects of the spending cuts may take time to kick in, but political blowback has already begun and is hitting Obama as well as congressional Republicans.

A Reuters/Ipsos poll on Friday showed neither Republicans nor Obama and his fellow Democrats escaping blame.

Obama's approval rating dropped to 47 percent in a Gallup poll on Friday, down from 51 percent in the previous three-day period measured.

While most polls show voters blame Republicans primarily for the fiscal mess, Obama could see himself associated with the worst effects of sequestration like the looming furloughs of hundreds of thousands of federal workers. He signed an order on Friday night US time that started putting the cuts into effect.

In his address on Saturday, Obama appealed for Republicans to work with Democrats on a deal, saying US citizens were weary of seeing Washington "careen from one manufactured crisis to another".

"There's a caucus of common sense" in Congress, Obama said in his address. "And I'm going to keep reaching out to them to fix this for good."

At the heart of Washington's persistent fiscal showdowns is disagreement over how to slash the budget deficit and the $16 trillion national debt, bloated over the years by wars in Iraq and Afghanistan and the government stimulus for the ailing economy.

The president offered a litany of hardships in his radio address he said will flow from the forced spending cuts.

"Beginning this week, businesses that work with the military will have to lay folks off. Communities near military bases will take a serious blow. Hundreds of thousands of Americans who serve their country - Border Patrol agents, FBI agents, civilians who work for the Defense Department - will see their wages cut and their hours reduced," he said.

AP-Reuters