Photo: Barack Obama
U.S. President Barack Obama reluctantly ordered the launch of $85 billion in budget cuts over the remainder of fiscal year 2013 after efforts by the White House and Congress to avert them failed.
Late Friday, Obama formally authorized the massive spending reductions that are known as the “sequester” and which stemmed from the Budget Control Act of 2011.
That federal statute raised the U.S. debt ceiling but required $1.2 trillion in automatic, across-the-board cuts over the next decade if a “supercommittee” failed to reach agreement on an additional $1.2-1.5 trillion in deficit reduction.
Sequestration had been scheduled to go into effect on Jan. 2, 2013, but it was delayed for two months by a New Year’s Eve deal that, among other things, raised tax rates on incomes of up to $400,000 for individuals and $450,000 for couples.
Under the sequester, Pentagon and non-defense spending are to be slashed by 13 percent and 9 percent, respectively.
After a closed-door meeting at the White House with congressional leaders, Obama blamed Republicans for the “dumb, arbitrary cuts.”
“Not everyone will feel the pain of these cuts right away. The pain though will be real. Beginning this week, many middle-class families will have their lives disrupted in significant ways,” Obama told reporters Friday.
According to the president, the $85 billion in budget cuts will take effect gradually through the end of September and will result in the loss of 750,000 jobs and shave roughly a half percentage point off GDP growth.
Nevertheless, he stressed that the United States will move forward and that the sequester “is not going to be an apocalypse.”
Republican leaders, meanwhile, fired back by saying that the president got the tax increases he wanted two months ago and that they would not budge further in that regard.
“Let’s make it clear that the president got his tax hikes on Jan. 1,” House Speaker John Boehner (R-Ohio) said Friday. “This discussion about revenue, in my view, is over. It’s about taking on the spending problem here in Washington.”
In the last-ditch negotiations, Obama touted what he called a balanced approach that would have included the closure of tax loopholes for the wealthy.
Earlier this week, administration officials warned that the sequester cuts would lead to air-traffic-control disruptions and furloughs of federal employees and have an adverse impact on education and national defense.