White House budget office says automatic cuts – many focused on defense spending – would have a ‘devastating impact’
The US government will slash spending targeted for the protection of embassies around the world as part of a $100bn program of automatic spending cuts set to be start this January if Congress can not find a compromise.
The news comes after ambassador to Libya, Christopher Stevens, and three other Americans died following attacks the US consulate and a safe house refuge in Benghazi on Tuesday night. US embassies across the Muslim world are now being targeted by protesters angered by a video that denigrated the prophet Muhammad.
According to a 400-page White House report released on Friday, automatic spending cuts to be made at the end of the year will include $129m a year earmarked for the next nine years to go to maintaining and protecting US embassies.
The cuts are a small part of massive cuts to the military, air traffic control, the federal bureau of investigation, housing and social welfare programs, government salaries and private contracts that “would have a devastating impact on important defense and nondefense programs”, according to the report from the White House budget office. Starting in January, some $54.7bn per year will be cut from defense spending and continuing for nine years.
The report details cuts for 1,200 separate budget line items. The White House said the spending cuts would total $984bn, and the government would spend $216bn less in interest payments on the federal debt. Salaries for military personnel and Medicare benefits are exempt, but the cuts will be felt across the board.
Air force and navy aircraft procurement is set for a $4.2bn cut. Defense department operations and maintenance would lose $3.9bn. Pentagon healthcare would be cut by $3.3bn. The national institutes of health would lose $2.5bn. Rental assistance for the poor would be cut by $2.3bn, food safety and inspections would lose over $1bn. The FBI would lose $735m for salaries and expenses.
The automatic cuts, called sequestration, were put in place in order to force an agreement between Republicans and Democrats on a deficit reduction plan following the debt-ceiling crisis of 2011. But a bipartisan “supercommitee” set up to negotiate a compromise collapsed, leaving sequestration in place. Half the cuts will come from defense spending and half to social programs and other non-military funding.
“As the administration has made clear, no amount of planning can mitigate the effect of these cuts,” the budget officer reported. “Sequestration is a blunt and indiscriminate instrument. It is not the responsible way for our nation to achieve deficit reduction.”
The report calls the cuts “deeply destructive to national security, domestic investments, and core government functions”.
The cuts will come at the same time as Bush-era tax cuts are set to expire, together the spending cuts and tax hikes have been dubbed the “fiscal cliff”.
On Thursday, Federal Reserve chairman Ben Bernanke said the fiscal cliff was a serious threat to the fragile US recovery. “If the fiscal cliff isn’t addressed, as I’ve said, I don’t think our tools are strong enough to offset the effects of a major fiscal shock so we’d have to think about what to do in that contingency,” said Bernanke. “So I think it’s really important for the fiscal policymakers to, you know, work together to try and find a solution for that.”
Republicans and Democrats appear at a stalemate as the White House insists any deficit-reduction deal includes more taxes and many Republicans focus on cuts to social social programs and government spending. Republican House speaker John Boehner said this week that a compromise seemed unlikely.
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