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Obama threatens severe cuts if no agreement

White House pushes for more tax hikes, but GOP is opposed

- The Washington Times - Sunday, February 10, 2013

The White House on Sunday stepped up pressure on Republicans to adopt a short-term budget patch that would cancel the $85 billion in spending "sequesters" due on March 1, saying that government spending is still needed to prop up a stubbornly sluggish economy.

Late last week, White House officials laid out a list of potential cuts they would have to make if the sequesters aren't averted, saying they'd be forced to kick children out of the Head Start education program and cut federal loans to small businesses. The officials even warned that more American workers could die as a result of furloughs for occupational safety inspectors.

(SEE RELATED: Let the sequesters begin, some Republicans say)

Those are the latest moves in what's become a continuous chess match between the GOP and Democrats as the former pushes for spending cuts, and the latter argue for higher taxes.

"We should have a debate over how to best reduce the deficit," White House spokesman Dan Pfeiffer said in a blog Sunday, expanding on an attack the administration began last week. "But with only three weeks until these indiscriminate cuts hit, Congress should find a short-term package to give themselves a little more time to find a solution to permanently turn off the sequester. That package should have balance and include spending cuts and revenues."

By balance, the White House means tax increases -- something Republicans have rejected, arguing they already accepted tax increases at the beginning of the year when the agreement they struck with Mr. Obama raised payroll taxes on all Americans, and raised income-tax rates on the top 1 percent.

"He got his tax hikes. Now we need to address our spending problem," House Speaker John A. Boehner's office said in a memo Friday, pushing back against the White House's demands.

(SEE RELATED: Sequestration may force Obama to make climate change compromises)

Both parties are following much the same script as when confronting other budget deadlines over the past two years -- though this time the stakes involve less than 10 percent of government spending, rather than an entire government shutdown or massive tax hikes on all Americans.

Still, the White House argues those cuts are untenable.

"Across the government, we'll see assistance programs slashed; we'll see contracts cut; we'll see employees out of work," Danny Werfel, the federal controller for the White House's Office of Management and Budget, told reporters last week. "And we'll have no choice. The blunt, irresponsible and severe nature of sequestration means that we can't plan our way out of these consequences or take steps to soften the blow."

Among the cuts he laid out were:

600,000 women and children he said would lose food stamps.

100,000 formerly homeless people who would lose their government-financed housing.

Cuts to special-education money that would eliminate federal support for 7,200 school employees around the country.

Potential furloughs for job-safety inspectors, which the White House warned "would leave workers unprotected and could lead to an increase in worker fatality and injury rates."

Republicans say Mr. Obama came up with the idea of a sequester back in 2011 as a way to earn a record-sized increase in the debt limit back then. All sides were supposed to try to negotiate over the following year to come up with a way to replace the sequesters, but those negotiations failed.

"This was a presidential suggestion back in 2011," said Rep. Tom Cole, Oklahoma Republican. "And yet the president himself hasn't put out any alternative. Republicans twice in the House have passed legislation to deal with it, once as early as last May; again, after the election in December. The Senate never picked up either of those bills, never offered their own thing. Now, we're three weeks out, and folks are worried. They ought to be worried."

He told ABC's "This Week" that Republicans are open to rearranging the $85 billion in cuts so that they don't hit key Defense Department programs or other domestic needs, but he said they'll have to be replaced with other cuts -- not new taxes.

But the GOP is sending mixed messages. Some Republicans say they must do whatever it takes to prevent the Pentagon budget cuts, but others argue the Defense Department has grown along with the rest of government and can be trimmed.

For her part, House Minority Leader Nancy Pelosi, cut straight at the GOP's chief argument, saying Sunday that the government doesn't have an overspending problem, and that Congress already has made enough cuts.

"It is almost a false argument to say we have a spending problem," she said on "Fox News Sunday."

The Congressional Budget Office released its annual budget projections last week, and they showed that the tax increases from earlier this year will push government revenues to about 19 percent of the economy within a few years and remain there for the rest of the decade, while spending will be at 23 percent by the end of the decade.

The average for recent years has been taxes at 18 percent and spending at about 21 percent, which means the government will in fact be taxing at a higher rate than it has -- but spending will have grown even faster.

Susan Crabtree contributed to this report.

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