U.S. government braces for $85-billion in spending cuts
Sweeping U.S. government spending cuts totalling $85 billion begin taking effect Friday, slicing deeply into military and other programs in an unwanted move toward austerity that displays Washington's paralyzing partisan divisions.
The cuts are kicking in after the White House and congressional Republicans could not overcome bitter disagreements and come up with a better plan to tackle the country's $11.7 trillion debt.
The warring sides have spent this week assigning blame rather than seeking a way out, and rival Democratic and Republican measures to modify the cuts failed in the Senate on Thursday.
The automatic spending reductions are part of a law passed two years ago and designed to be so off-putting to both Democrats and Republicans as to force a compromise. It didn't work, although White House press secretary Jay Carney said the cuts will be put into force as close to midnight as possible on Friday because President
Barack Obama is ``ever hopeful.''
The immediate impact of the cuts on the public was uncertain, and the administration pulled back on its earlier warnings of long lines developing quickly at airports and teacher layoffs affecting classrooms. It's expected to be a fiscal speed-bump on the road to economic recovery that is otherwise looking good.
The cuts would carve 5 per cent from domestic agencies and 8 per cent from the Pentagon between now and Oct. 1 but would leave several major programs alone, including the Social Security pension program, the Medicaid health care program for the poor and food stamps.
Federal agencies must give workers a month's notice before imposing furloughs, which will likely force many to take one day a week of unpaid leave indefinitely. The delay gives lawmakers time to seek a deal that might retroactively reverse the spending cuts
before they could do much damage to the economy.
But the painful cuts are just the first of a series of budget crises that will confront Congress and the White House before summer.
Obama is meeting congressional leaders of both parties Friday but the talks will look past the automatic spending cuts to the next looming fiscal fight: a possible government shutdown. The annual ritual of passing agency spending bills collapsed entirely last
year, and Congress must act by March 27 to prevent the partial shutdown.
Then, in April, Congress will confront a renewed standoff on increasing the government's borrowing limit _ the same the issue that, two years ago, spawned the law forcing the current spending cuts in the first place. Failure to raise the borrowing limit could force the U.S. to default on debt for the first time in history.
In a cycle of crisis followed by compromise over the past two years, Obama and congressional Republicans have agreed to more than $3.6 trillion in long-term deficit savings over a decade. While much of that has come from spending restraint, Republicans allowed legislation pass late last year that raised taxes on upper-income
Americans by $600 million.
(The Associated Press)