Not much urgency to avoid automatic spending cuts

WASHINGTON (AP) — Ten days before a new

deadline for broad, automatic government spending cuts, the sense of

urgency that

surrounded other recent fiscal crises is absent. Government

agencies are preparing to absorb an $85 billion hit to their budgets,

and politicians, at least for now, seem willing to accept the

consequences.

President Barack Obama, back from a Florida golfing weekend, warned Tuesday that "people will lose their jobs" if Congress

doesn't act. But lawmakers weren't in session to hear his appeal, and they aren't coming back to work until next week.

Still dividing the two sides are sharp differences over whether tax increases, which Obama wants and Republicans oppose, should

be part of a budget deal.

Obama cautioned that if the immediate

spending cuts — known as sequestration — occur, the full range of

government will feel

the effects. Among those he listed: furloughed FBI agents,

reductions in spending for communities to pay police, firefighters

and teachers, and decreased ability to respond to threats around

the world.

Aides say Obama is ready to take his case

more directly to the public in an effort to pressure Republicans, either

by traveling

to vulnerable states or, as the White House often does, through

local media interviews. They say neither Obama nor White House

officials are now engaged in direct negotiations with Republican

leaders.

"So far at least, the ideas that the

Republicans have proposed ask nothing of the wealthiest Americans or the

biggest corporations,"

Obama said. "So the burden is all on the first responders, or

seniors or middle class families."

The spending cuts, however, aren't perceived

to be as calamitous as the threatened results of recent fights over the

nation's

borrowing authority and the "fiscal cliff" that would have cut

spending and increased tax rates on all Americans paying income

taxes. Failure to raise the debt ceiling would have left the

government with no money to spend on myriad programs and could

have precipitated an unprecedented default. The fiscal cliff had

the potential of setting back the economic recovery.

In fact, many Republicans now see the

automatic cuts in spending as the only way to tackle the federal

deficit. And many Democrats

believe the cuts will have to materialize before Republicans agree

to some increase in taxes.

"Not only do I expect the sequester to kick

in, but unfortunately it will take a couple of temporary government

shutdowns

before Republicans realize they need to sit down and negotiate in

good faith," said Democratic consultant Jim Manley, a former

Senate leadership aide who periodically consults with Obama

officials.

White House officials say they believe

Republican House Speaker John Boehner of Ohio will ultimately relent in

his opposition

to additional taxes. They note that despite his initial stand

against increasing tax rates in December, he eventually allowed

a House vote to proceed raising the top rate on the wealthiest

taxpayers.

Not this time, he said Tuesday: "The American people understand that the revenue debate is now closed."

House Republicans have proposed an alternative to the broad, immediate budget cuts, targeting specific spending and extending

some of the reductions over a longer period of time. They also have said they are willing to undertake changes in the tax

code and eliminate loopholes and tax subsidies. But they have said they would overhaul the tax system to reduce rates, not

to raise revenue.

Boehner said in a statement following Obama's remarks: "Tax reform is a once-in-a generation opportunity to boost job creation

in America. It should not be squandered to enable more Washington spending. Spending is the problem, spending must be the

focus."

Tuesday's exchanges came as the co-chairs of

a bipartisan deficit-reduction commission called for reducing the

deficit by

$2.4 trillion over the next 10 years, with much of the savings

coming through health care changes, the closing of tax loopholes,

a stingier adjustment of Social Security's cost-of-living

increases and other measures.

The proposal by Republican former Sen. Alan

Simpson of Wyoming and Democrat Erskine Bowles, the former chief of

staff for

President Bill Clinton, calls for about one-quarter of the savings

to come from changes in health care programs and another

quarter from revenue generated by tax changes.

In their plan, Bowles and Simpson say the automatic cuts scheduled for March 1 are too steep and could set back the economy.

"Sharp austerity could have the opposite effect by tempering the still-fragile economic recovery. In order to protect the

recovery, the sequester should be avoided and deficit reduction should be phased in gradually," they wrote.

Obama has proposed about $1.5 trillion in

long-term deficit reduction with savings from changes in health care

programs, lower

cost-of-living adjustments in Social Security and other government

benefits, spending cuts and increases in revenue by overhauling

the tax system

Obama has said he wants to close tax

loopholes, but with a few exceptions. The White House says any

elimination of corporate

subsidies or tax breaks would be used to lower rates for

corporations to 28 percent and to 25 percent for manufacturers, not

to raise revenue.

Under Obama's plan, additional revenue of about $600 billion over 10 years would mostly come from reducing the value of itemized

deductions and other tax preferences to 28 percent for families with incomes over $250,000.

Even as Obama and Republicans battle over the automatic cuts, Congress is also struggling over how to fund the government

through the Sept. 30 end of the fiscal year. Every federal agency has been running on autopilot at essentially last year's

funding level since October.

The Pentagon, for instance, has been denied

long-sought increases for training and readiness, especially for the

Navy and

Marine Corps. House Appropriations Committee Chairman Harold

Rogers, R-Ky., favors attaching a half-trillion-plus Pentagon

funding bill and another measure funding veterans' programs to a

spending bill that would pay for government operations for

the final six months of the budget year.

Senate Democrats appear cool to the idea of permitting only defense-related spending measures to advance.