President Barack Obama and his administration are urging Congress to avert the $85 billion in automatic spending cuts set to occur March 1, saying they would harm the economic recovery.
These across-the-board “sequestration” cuts, which Congress agreed to following the 2011 debt ceiling crisis and delayed as part of the recent fiscal cliff negotiations, total approximately $1.2 trillion in savings over 10 years by cutting from defense and domestic programs.
“Some in this Congress have proposed preventing only the defense cuts by making even bigger cuts to things like education and job training, Medicare and Social Security benefits,” Obama said in his State of the Union address last week. “That idea is even worse.”
Obama warned the automatic spending reductions would result in harm for defense spending and “job-creating investments.” Thus, he called upon Congress to delay the sequestration.
White House Chief of Staff Denis McDonough appeared on the Sunday talk show circuit to reiterate Obama’s plan to avert the sequester by raising new revenue in addition to cuts.
“We’re going to insist on doing this in a balanced way, a way that allows us to maintain the kinds of investments that middle-class families in this country rely on,” McDonough said on ABC’s “This Week.”
Central Michigan University political science professor Sterling Johnson said the sequester cuts could have a marginally positive effect on the economy.
“The sequestration cuts for the Pentagon will be beneficial,” Johnson said. “The $800 billion defense budget is where the most spending is wasted.”
Meanwhile, House Republicans are attempting to prevent any increase to federal revenues via taxation as part of a potential plan to delay the sequestration cuts.
“Tax reform should be about making the code simpler and fairer for American families and helping employers create jobs,” Rep. Dave Camp, R-Midland, said. “The president’s proposal is nothing more than another tax hike to pay for more Washington spending. That is not what America needs.”
The sequestration cuts arrived with another form of spending reduction; the capping of federal agencies’ budgets by $1 trillion over the next decade.
Even so, a recently released report by the nonpartisan Congressional Budget Office projects an accumulation of an additional $7 trillion in debt over the next 10 fiscal years.
The current CBO anticipates “underlying economic factors and fiscal tightening” to result in real GDP growth of 1.4 percent and an unemployment rate of around eight percent for the coming year.