Warning of serious repercussions for the economy and the military if Congress fails to halt the next round of $85 billion in budget cuts next month, President Obama on Tuesday called for replacing the automatic spending “sequesters” with a vague mix of smaller cuts and more tax increases.
At a time when many top Republicans have said the cuts should take effect, Mr. Obama’s call renews the battle over spending that has dominated Washington for the past two years, but which seemed to cool after the January deal that raised taxes across the board.
The president said he would like another big tax reform that targets the wealthy, cutting deductions and loopholes, but said at the very least Congress should avert the sequester, which he called an avoidable self-inflicted economic wound.
“If they can’t get a bigger package done by the time the sequester is scheduled to go into effect, then I believe they should at least pass a smaller package,” he said. “There is no reason that the jobs of thousands of Americans who work in national security or education or clean energy — not to mention the growth of the entire economy — should be put in jeopardy.”
His offer is a rehash of proposals he has made to end tax breaks and lower projected increases in health care spending, though the White House has yet to lay out a full list of deductions it wants Congress to target.
Even before Mr. Obama spoke, Republicans were rejecting his offer.
House Speaker John A. Boehner, Ohio Republican, issued a statement saying it was the president who came up with the sequester idea. He also said House Republicans have passed two bills to avert the sequesters, so Mr. Obama must lay out his own specific plan.
Still smarting from his “fiscal cliff” deal with Democrats in which Republicans agreed to increase taxes without spending cuts, the speaker made it clear that he was ruling out any need to increase taxes further.
“President Obama first proposed the sequester and insisted it become law. Republicans have twice voted to replace these arbitrary cuts with common-sense cuts and reforms that protect our national defense,” he said. “We believe there is a better way to reduce the deficit, but Americans do not support sacrificing real spending cuts for more tax hikes.
“The president’s sequester should be replaced with spending cuts and reforms that will start us on the path to balancing the budget in 10 years,” he said.
Senate Minority Leader Mitch McConnell, Kentucky Republican, rebuked Mr. Obama for lecturing Congress about the need to avoid the cuts he proposed.
“If Democrats have ideas for smarter cuts, they should bring them up for debate,” he said. “But the American people will not support more tax hikes in place of the meaningful spending reductions both parties already agreed to and the president signed into law.”
Mr. McConnell also criticized Mr. Obama for failing to submit a budget by the statutory deadline this year.
“The clock is ticking. It’s time to get serious,” he added.
The White House first came up with the idea of the arbitrary, across-the-board spending cuts during budget talks in summer 2011 as a way to pressure Democrats and Republicans in Congress into coming up with their own spending cut plan to reduce the deficit over the next decade.
But partisan Washington gridlock quickly took hold and a supercommittee of lawmakers tasked with coming up with a plan to find alternative spending cuts to replace the sequester failed to reach a deal after negotiating for months.
As the country braced for the cuts to kick in and Washington to tumble off the fiscal cliff Jan. 1, lawmakers struck a last-minute deal that shifted the first two months of cuts into future spending bills and replaced the rest with an increase in the way retirement accounts are taxed. Still, the deal postponed another $85 billion in cuts to March 1 — a way to buy more time to find alternative sources of revenue.
The Pentagon in recent weeks has grown increasingly pessimistic about the chances of avoiding the cuts, and the branches of the military have issued memos outlining what programs and sections would be hit hardest.
Washington think tanks and policy centers have warned repeatedly of the havoc that the cuts could wreak on the economy. The Bipartisan Policy Center has estimated that 1 million jobs could be lost this year and next as a direct result of the spending cuts, and defense industry analysts say that number could rise to 2 million this year alone.
The president made his plea as Senate Democrats were meeting in Annapolis for their annual retreat. Mr. Obama is scheduled to address the group Wednesday.