Obama, Spending Cuts Will Begin Friday

Congress effectively missed the deadline to avert the automatic spending cuts, originally passed into law in the summer of 2011. President Obama will officially enact the cuts by the end of the day Friday – but there will be cuts.

As the White House has come to acknowledge, the impact of the cuts will – for the most part — not be felt immediately.

The billions of dollars in budget cuts are most likely going to phase in over the next few months. Furloughs of government workers will begin several weeks from now. Administration officials say the impact of this and other cuts will build up over time; President Obama describes the effect on the economy as a “tumble downward.”

But some fiscal hawks see a silver lining, in that the sequester will force the government to trim the waste in order to shield higher-priority items. Already, the White House budget office is recommending agencies take a skeptical eye toward costly conferences and training programs.

And there’s still time for a deal, only now the debate over the sequester gets wrapped into the debate over an expiring budget provision.

On Friday, Obama is scheduled to meet with congressional leaders from both parties at 10 a.m. This comes after Republicans and Democrats each put forward a proposal Thursday to avert the sequester; each was defeated, paving the way for talks toward a possible compromise.

Still, the two sides remain deadlocked over the issue of raising taxes. Republicans want to replace the current regime of cuts with different, more sensible, cuts. Democrats want to blend in a set of tax increases, closing loopholes for top earners and some corporations.

The effects of the 2013 sequestration will be rolled out over the next several months. It won’t be a government shutdown but it will be a government slowdown.

“The impact of this policy won’t be felt overnight but it will be real,” Obama said. “The longer these cuts are in place, the greater the damage.”

The predicted impact of the spending cuts could come in flight delays, limited hours at national parks, longer wait times at border crossings and furloughs of civilian Pentagon employees – and workers at several other agencies.

Some officials say the administration has the leeway, or should be given the leeway, to spread around the budget pain.

“There is so much hype on this, it’s ridiculous,” David Walker, former U.S. comptroller general, told Fox News. “We spend as much money as the next 15 countries put together and some of the people who are hyping this big time are going to be really embarrassed.”

How the public reacts to the cuts will have an effect on how Congress addresses the issue. If voters react with a shrug, the GOP may be less compelled to agree to the kinds of tax increases Obama wants. If there’s a big backlash, the Obama administration may take it as vindication that the public won’t stand for big cuts to federally funded programs. Still, Republicans point out that the sequester idea originated at the White House.

“The sky is not going to fall but things will get progressively worse,” Maryland Democrat Rep. Chris Van Hollen said.

White House spokesman Jay Carney said Friday’s talks are designed to be a “constructive discussion” about how to keep the deep spending cuts from having harmful consequences.

The meeting, the first face-to-face since Obama was sworn in for his second term in January, will essentially look past the current $85 billion in cuts to the next looming fiscal crisis – a possible government shutdown.

On March 27, the fiscal 2013 continuing appropriations resolution expires, cutting off the ability of most agencies and programs to operate. A new spending bill will be needed to keep the government from shutting down.

Following March Madness – budget style – Congress will have two months to decide on the debt limit. Congress has suspended enforcement of the $16.4 trillion limit on federal borrowing until May 18. The short-term debt limit deal will then raise the borrowing limit the following day, on May 19, to the debt accumulated up through May 18. The short-term extension, approved in January, will allow what budget experts project will be $450 billion in additional borrowing before the debt limit is raised to a new, higher level.

And then, even if no increase in granted by May 19, the Treasury Department will be able to stave off a final day of reckoning until late July or early August by redeploying cash management measures which would allow it to claw back about $220 billion worth of borrowing capacity.

http://www.foxnews.com/politics/2013/03/01/white-house-to-enact-sequester-cuts-friday-amid-questions-over-impact/

13 thoughts on “Obama, Spending Cuts Will Begin Friday”

  1. “I am not a dictator, I am the president.”

    Well Mr. President, methinks thou prostesteth too much.

  2. DON’T BELIEVE THE PRESIDENT

    DON’T BELIEVE THE NEWS MEDIA

    The Superintended of the Capitol had to rush to tell employees

    “There was a specific mention in the news today by a high ranking official that said ‘The employees that clean and maintain the US Capitol will receive a cut in pay’ (not specific quote but very close to it),” Elias continued.

    “This is NOT TRUE,” wrote Elias. “Therefore, I request that you please notify all of our employees about the importance of ignoring media reports.”

    We should all remember:’

    “the importance of ignoring media reports.”

    Mr. Obama said. “The janitors, the security guards, they just got a pay cut, and they’ve got to figure out how to manage that. That’s real.”

    The president’s mention prompted Carlos Elias, the superintendent of the U.S. Capitol building and the Capitol Visitors Center, to email his employees within hours of Mr. Obama’s comment.

    http://www.cbsnews.com/8301-250_162-57572180/u.s-capitol-official-obama-wrong-on-janitors-pay-cut/

  3. The thing is…. liberals are GULLIBLE.

    Republican moderates are GULLIBLE.

    They believe whatever their Thought-Guardians in the news media tells them.

  4. and conservatives put both fingers in their ears and go “la, la, la, la, la…” to all attempts to engage them…

  5. Kavips
    If you want to engage us in meaningful dialogue, use substantive debate points. All we’ve gotten from the left is useless rhetoric. Boring!!!

  6. Kavips, what I am saying is that when someone says something in the news media, we shoudl investigate and discuss it and find the truth.

    So how is that not engaging in a discussion?

    I don’t want peopel to just swallow hook, line, and sinker what the President or anyone else says.

  7. Constructive budget discussions to this administration is anything which expands the scope and resources of the government.

  8. First of all, sequestration was Omaba’s idea- not the GOP. of course, he never thought that the House would sit-back and let sequestration occur, due to the draconian nature of defense cuts therein.

    Now, BO has another strategy. The House offered BO a carte blanche opportunity to manage the cuts as he saw fit, but no tax increases. Omaba refused. In other words, BO would rather let people suffer than to compromise.

    Now, BO is supposed to be politically acute, but if he thinks that by holding his position that the Socialist-Dems will gain the House in ’14, then he is delusional- that does not and will not happen in a mid-second-term election. Period.

    Recent revelations show BO to be a liar. Is he also stubborn to the point of being stupid? Is his saving face more important than peoples lives? I guess so.

  9. Rick, your history is backwards. Everyone knows this sequestration, most particularly the 20% reduction of all military personnel’s pay, could have been prevented by the House accepting the Senate legislation that levied only one more penny per dollar on income over the $1 million mark.

    Republicans said no; we are protecting our billionaires from losing one penny. We hate the military anyway. We, Republicans simply don’t care if they get a 20%, 40%, or a 60% a pay reduction. We don’t care if they get 100% pay reduction. Screw them; screw them all. We don’t care who gets hurt!!! We are not going to tax our best friends, the billionaires one more single penny.

    Everyone knows that. So when you state the opposite, everyone knows you are making stuff up, because…. there is no way you simply don’t know….

  10. Probably no real reason for much of this:

    We need to stop playing the fool in this charade. If someone tried to charge us a penny for every breath we took, we would rebel. Oxygen doesn’t belong to anyone. It is our birthright. The same applies to the money supply (currency.) It is a medium of exchange, like a coupon. It is created out of thin air, and has no intrinsic value. It’s value lies in what we an exchange for it.
    Just as we are entitled to breathe, our government should be able to create money without incurring a debt to anyone. But under the Federal Reserve fraud, it appears as “debt” to the private central banking cartel and needs to be paid back. This is the real debate and it is not happening. We should rebel. The government does not need these bankers to create the money supply.
    As we have seen clearly, the money supply is the tonic needed to make the economy grow. It is oxygen to the fire. Grow the money supply- grow the economy.

    Governments can create as much as they need debt-free to make the economy hum. Markets will determine their value relative to other currencies.
    But the Illuminati bankers have created all currency in the form of a debt to them. Our society is wholly complicit in this fraud. Everybody in positions of power or influence owe it to their collusion in this fundamental fraud. Link

    If it looks like a big theatrical production designed to use the ability to create money/debt from nothing to manipulate people into behaviors that they wouldn’t engage in if left to their own ideas about debt, maybe that’s what it is.

    Also, why do we always want the economy and the military industrial complex to grow more and more in order to generate even more debt/money and “federal reserve notes”? What does that mean… and how is a paradigm of infinite growth driven by Wallstreet and D.C. sustainable in a finite world?

  11. Republicans said no; we are protecting our billionaires from losing one penny.

    Every time you have Blue Team swing at Red Team all you seem to wind up doing is hitting the middle class or the upper middle class, not to mention the poor too.

    If you really wanted to do away with manipulation by the rich then you would try to do away with their ownership of “our” federal reserve notes and “our” debt/money instead of continuing to play their games. Duh.

  12. Kind of ironic:

    We need to stop playing the fool in this charade. If someone tried to charge us a penny for every breath we took, we would rebel. Oxygen doesn’t belong to anyone. It is our birthright. The same applies to the money supply (currency.)

    Not if the elite are successful in their campaign to essentially monetize CO2. And as stupid and ignorant as lemmings are, monetizing CO2 is not outside the realm of possibility. I’m not sure what the charges would if you owned the land where a volcano went off or there was a forest fire though. Trillions of dollars, burned! Etc.

    Meanwhile: In China Clean Air Sells At $0.80 Per Breath

Comments are closed.