President Obama signed an order Friday night to begin automatic budget cuts across most federal departments.
The White House released a copy of the order at 8:31 p.m. Friday, directing federal agencies to reduce spending in various accounts by percentages calculated by the Office on Management and Budget.
After failing to reach a deal with congressional leaders to avoid $85 billion in automatic “sequester” budget cuts, President Obama on Friday blamed the crisis squarely on Republican lawmakers.
“They’ve allowed these cuts to happen because they refuse to budge on closing a single wasteful loophole to help reduce the deficit,” Mr. Obama said at the White House after a Friday morning meeting with top congressional Republicans and Democrats that broke no new ground. “Many middle-class families will have their lives disrupted in significant ways.”
But neither side showed any signs of yielding Friday, and Republicans said the reason for the impasse is Mr. Obama’s insistence on more tax increases.
In the Oval Office meeting, GOP House Speaker John A. Boehner told the president it was time to focus on spending cuts instead. He reminded Mr. Obama that he succeeded in raising income taxes Jan. 1 on families earning more than $450,000 and payroll taxes on all wage earners, a deal that had no spending cuts.
“The American people know that Washington has a spending problem,” said Mr. Boehner told reporters after the session.
The president said he told Mr. Boehner and Senate Minority Leader Mitch McConnell, Kentucky Republican, that “these cuts will hurt our economy, they’ll cost us jobs, and to set it right, both sides need to be willing to compromise.”
The GOP leaders told Mr. Obama they were willing to close tax loopholes, but only if the revenue was used to lower tax rates and create jobs, not to replace the sequester spending cuts.
The meeting was Mr. Obama’s last-minute attempt to postpone a fiscal crisis that has been building for two months. Both sides agreed to the $85 billion across-the-board sequester cuts in 2011 as a way to force Congress to find less arbitrary ways to reduce deficits, but the House and Senate were unable to agree on another solution. In spite of Friday’s deadline, the president had not held any previous face-to-face meetings with the Republican leaders on the budget cuts.
Both sides did agree to work towards a measure to keep the government running beyond the end of March, when the current appropriations legislation expires.
Mr. Obama said he would sign a continuing resolution if Republicans kept the same spending levels agreed to in the 2011 Budget Control Act, although the sequester cuts would still take effect.
“I think it’s the right thing to do to make sure that we don’t have a government shutdown,” he said.
Without an alternative to the automatic cuts, the president was to sign an order Friday directing federal agencies to begin trimming their budgets, roughly 8 percent from defense programs and about 5 percent from domestic spending. Many federal programs are exempt, such as Social Security, welfare, food stamps and pay for uniformed military personnel.
Thousands of federal employees are to be furloughed, although the extent hasn’t been determined yet. The president said the cut will slow economic growth.