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Obama Turns Up the Pressure for a Deal on Budget Cuts Obama Turns Up the Pressure for a Deal on Budget Cuts
(about 5 hours later)
WASHINGTON — President Obama, back from his three-day golf getaway, on Tuesday made use of his bully pulpit, while Congress remains out all week, to turn up the pressure for a bipartisan agreement to avoid indiscriminate across-the-board budget cuts that will otherwise hit March 1. WASHINGTON — Days away from another fiscal crisis and with Congress on vacation, President Obama began marshaling the powers of the presidency on Tuesday to try to shame Republicans into a compromise that could avoid further self-inflicted job losses and damage to the fragile recovery. But so far, Republicans were declining to engage.
Speaking in a White House auditorium surrounded by blue-uniformed emergency responders to illustrate some of the jobs threatened if the cuts were to take effect, Mr. Obama warned that military readiness and vital domestic services would be hurt “if Congress allows this meat-cleaver approach to take place.” To turn up the pressure on the absent lawmakers, Mr. Obama warned in calamitous terms of the costs to military readiness, domestic investments and vital services if a “meat-cleaver” approach of indiscriminate, across-the-board spending cuts takes effect on March 1. Surrounding him in a White House auditorium were solemn, uniformed emergency responders, invited to illustrate the sort of critical services at risk.
“Changes like this affect our responsibility to respond to threats in unstable parts of the world,” the president said. “These cuts are not smart, they are not fair, they will hurt our economy, they will add hundreds of thousands of Americans to the unemployment rolls. This is not an abstraction — people will lose their jobs.” The president plans to keep up the pressure through next week for an alternative deficit-reduction deal that includes both spending cuts and new revenues through closing tax loopholes. He will have daily events underscoring the potential ramifications of the automatic cuts, aides said, and next week will travel outside Washington to take his case to the public, as he did late last year in another fiscal fight on which he prevailed.
Some Republicans in Congress have proposed alternative savings that would spare any cuts in military spending but not in domestic accounts. Mr. Obama and Congressional Democrats are calling for a mix of spending cuts and additional tax revenues by closing some tax breaks for wealthy investors and corporations. In stern tones, Mr. Obama said that the automatic cuts, known in budget terms as a sequester, would “affect our responsibility to respond to threats in unstable parts of the world” and “add thousands of Americans to the unemployment rolls.”
Mr. Obama’s comments were among his harshest toward Republicans, and reflected the political frame that he has devised to try to force Republicans into compromising with him by supporting some higher revenues — something they so far refuse to do. He framed the debate in the way that he hopes will force Republicans into accepting some higher tax revenues, something they so far refuse to do.
“The ideas that the Republicans have proposed ask nothing of the wealthiest Americans or biggest corporations, so the burden is all on first responders or seniors or middle-class families,” Mr. Obama said, adding that those proposals would “slash Medicare and investments that create good middle-class jobs.” “Republicans in Congress face a simple choice,” Mr. Obama said. “Are they willing to compromise to protect vital investments in education and health care and national security and all the jobs that depend on them, or would they rather put hundreds of thousands of jobs and our entire economy at risk just to protect a few special-interest tax loopholes that benefit only the wealthiest Americans and biggest corporations?”
“So now Republicans in Congress face a simple choice,” he added. “Are they willing to compromise to protect vital investments in education and health care and national security and all the jobs that depend on them, or would they rather put hundreds of thousands of jobs and our entire economy at risk just to protect a few special-interest tax loopholes that benefit only the wealthiest Americans and biggest corporations?” Mr. Obama once again finds himself in a budget showdown with the opposing party, and numerous polls show his position to be more popular than Republican calls for spending cuts only, including cuts in Medicare. Mr. Obama and senior aides hardly disguised their sense of political advantage.
Republicans, seeking to put blame on Mr. Obama if the cuts occur, have repeatedly noted that the White House proposed the sequester idea during debt talks in mid-2011. But both parties overwhelmingly supported the proposal as part of their deal. And as Mr. Obama said on Tuesday, the purpose of the sequester was to threaten something so unthinkable that the two parties would come together to agree on an alternative. “We are trouncing them,” said one senior administration official about the Republicans.
The president’s latest deficit reduction push comes as the heads of his 2010 deficit reduction commission — former Senator Alan K. Simpson and Erskine B. Bowles, a former chief of staff to President Bill Clinton — unveil a new plan that would reduce the deficit by $2.4 trillion through a series of spending cuts and an overhaul of the tax system. Still, the president’s leverage might in fact be limited, since by all appearances he seems to want a deal far more than Republicans do. As the leader of the nation, Mr. Obama is eager to see an end to the repeated evidence of Washington dysfunction, or what he referred to again on Tuesday as the cycle of “manufactured crisis.” And with his legacy ultimately at stake, he needs to lift the fiscal uncertainty that since 2011 has held down economic growth.
When Congress returns from a winter recess next week, just days remain before the deadline for the so-called sequester of spending cuts, a deadline that already was moved once — at the start of the year — to allow more time for the two parties to negotiate. Despite the risks of an impasse for Republicans, those who control the House have all but forfeited this battle to Mr. Obama and seem poised to let the automatic cuts take effect. Many Republicans, particularly newer members elected with Tea Party support, have pushed party leaders to accept the sequester and lock in the spending cuts rather than compromise. The leaders seem to have decided to wage battle later this spring in the larger fight over the annual federal budget.
Contributing to Republican calculations is the fact that at least in the short term, an impasse over the sequester is not as potentially catastrophic as the threats that loomed in past partisan showdowns, like a full shutdown of government or the nation’s first-ever default on its global debt obligations.
The potential impact is potentially hazardous nonetheless, both economically and politically. As Mr. Obama noted, the prospect of the sequester has already affected military deployments and hiring by military contractors, and threatens layoffs of teachers, air traffic controllers and researchers, among others.
Hours after the president’s remarks, economic forecasters at Macroeconomic Advisers, based in St. Louis, projected that sequestration would reduce the firm’s forecast of growth this year by nearly a quarter, 0.6 percent, and cost roughly 700,000 civilian and military jobs through 2014, with heightened unemployment lingering for several years.
“By far the preferable policy,” the analysis said, “is a credible long-term plan to shrink the deficit more slowly through some combination of revenue increases within broad tax reform” as well as “more carefully considered cuts” in spending programs, including Medicare and Medicaid. That prescription for both long-term spending reductions and revenue increases, as an alternative to immediate deep spending cuts that inhibit job growth, generally tracks Mr. Obama’s approach.
He has proposed $1.5 trillion in spending cuts over 10 years and revenue increases that would build on the roughly $2.5 trillion over the decade that he and Congress have agreed to in the past two years. The total, $4 trillion, is the minimum reduction that many economists say is necessary to stabilize the growth of the nation’s debt at a time when the population is aging and health care costs are rising.
That approach mixing spending cuts and increased revenues got another endorsement on Tuesday when the chairmen of Mr. Obama’s 2010 debt-reduction commission — former Senator Alan K. Simpson, a Republican, and Erskine B. Bowles, a Democrat and former chief of staff to President Bill Clinton — released a revised fiscal plan that would reduce annual deficits by $2.4 trillion in a decade through spending cuts, including in Medicare and Social Security benefits, and an overhaul of the tax system.
But Republicans say they will not consider additional tax increases since Mr. Obama in January won more than $600 billion over 10 years in higher revenues from the wealthiest taxpayers. “The revenue debate is now closed,” Speaker John A. Boehner said in a statement reacting to the president’s remarks.