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.