Fingers point as budget ax falls
WASHINGTON - The federal government will start cutting spending as early as Saturday, with President Obama and congressional leaders unable to bridge their fundamental disagreement over spending and taxes.
About the only thing the leaders who met at the White House for less than an hour agreed on: It's the other party's fault.
The administration has warned for weeks that the spending cuts - known in Washington as sequestration - will cause delays in air traffic, prompt teacher layoffs, and hamper food inspections. But the White House has been accused of overstating the effects, and Obama said Friday that the $85 billion slice in federal spending, though painful for a still-recovering economy, will be survivable.
Obama formally enacted the reductions a few hours before the midnight deadline required by law.
"This is not going to be an apocalypse, I think, as some people have said," Obama said. "It's just dumb. And it's going to hurt. It's going to hurt individual people and it's going to hurt the economy overall."
Obama's remarks came minutes after he and congressional leaders wrapped up a 50-minute, last-ditch attempt at avoiding the series of spending cuts, designed by the administration and Congress in 2011 to be so objectionable to both parties that they would be forced to reach an alternative deal to trim projected deficits by $1.2 trillion over 10 years.
But resolution has proved elusive, and Obama put the blame squarely on Republicans, who opposed replacing some spending cuts with tax increases. He wants a mix of tax revenues and spending cuts; Republicans say they already agreed to a tax increase in January to avoid an earlier fiscal crisis.
"None of this is necessary; it's happening because of a choice that Republicans in Congress have made," Obama said. "They've allowed these cuts to happen because they refuse to budge on closing a single wasteful loophole."
House Speaker John A. Boehner (R., Ohio) underscored the Republican position, saying Obama "got his tax hikes" on Jan. 1. Republicans agreed to raises taxes on annual household income over $450,000 as part of a deal to avoid a collision of spending cuts and tax increases dubbed the fiscal cliff. That deal also raised the Social Security payroll tax on all Americans, regardless of income.
"This discussion about revenue, in my view, is over," Boehner said outside the White House. "It's about taking on the spending problem here in Washington."
Senate Minority Leader Mitch McConnell (R., Ky.) vowed that he would "not be part of any backroom deal" on the sequester and that he would "absolutely not agree to increase taxes."
By Friday afternoon, administration officials were writing to governors outlining some initial effects of the cuts.
The Defense Department, saying there isn't yet "a complete inventory," warned Gov. Corbett that 26,000 civilian employees in Pennsylvania could face unpaid furloughs of up to 22 days. The effective pay cuts mean the workers "will presumably spend less in your economy" and could result in a $155 million payroll drop in Pennsylvania, the letter said.
Rental and housing aid to the poor and to people with AIDS could be cut by $37.5 million in Pennsylvania, federal officials wrote. Comparable New Jersey numbers were not immediately available.
Corbett had already told state agencies to plan "for the eventuality that sequester would occur," said Jay Pagni, a spokesman for his budget office. "At this point things are still fluid. We did tell agencies that we would not be filling any federal dollars with state dollars."
Obama and congressional Republicans did signal that they would try to keep the sequestration fight separate from the next crisis: avoiding a shutdown later this month. Government funding expires March 27 and will require budget legislation to keep many agencies running.
"There's no reason why we should have another crisis by shutting the government down in addition to these arbitrary spending cuts," Obama said. And Boehner said the House would take up legislation next week to continue funding the government past the end of the month.
Some congressional Democrats and Republicans have suggested that the cuts could be restored, or at least reconsidered, during that debate.
Obama said he hopes that as Congress starts hearing from constituents "who are being negatively impacted," Republicans will come back to the table. He said he would also keep pressing for the kind of "grand bargain" he and congressional Republicans nearly reached in 2011.
Obama has angered Republicans who accuse him of preferring to stage campaign-style events outside the Beltway rather than negotiate. Though he and congressional leaders talked once by phone, the meeting in the Oval Office was the first significant face-to-face sequester meeting. But Obama dismissed suggestions that he bears some blame for the situation.
"I'm presenting a fair deal. The fact that they don't take it means that I should somehow do a Jedi mind-meld with these folks and convince them to do what's right," he said, creating a Star Wars/Star Trek reference that the White House quickly seized on, creating a Web address: http://www.wh.gov/jedimindmeld, which takes viewers to the White House plan to avoid the sequester.
Obama argued that he has offered proposals that his fellow Democrats oppose, including changes to entitlement programs such as Medicare and Social Security.
House Minority Leader Nancy Pelosi (D., Calif.) said she believes Democrats will make "judgments about entitlements as we go forward," but she warned, "You can't say to seniors and to others, 'You're paying the whole price, and these others are getting off scot-free.' "
House Republicans threatened to call cabinet secretaries before Congress to determine how federal furloughs will be applied.
Staff writers Jonathan Tamari and Amy Worden contributed to this article.