President warns US to prepare for drawn-out standoff after futile meeting with congressional leaders over scheduled cuts
Barack Obama is due to sign an order before midnight on Friday to implement $85bn in spending cuts, a move he described as “dumb” and “arbitrary” and that he blamed on the intransigence of Republicans in Congress.
Speaking at a White House press conference after a futile meeting with congressional leaders, Obama warned Americans to prepare for a drawn-out confrontation that could last for months and will be painful for working-class people.
“We will get through this. 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,” he said.
Federal agencies will spend the weekend redrawing their budget plans and beginning the process of sending out letters to federal workers giving them 30 days notice of shorter hours, furloughs and even lay-offs. The White House budget office also has to inform Congress of where the spending cuts are to be made.
The hardest-hit department will be the Pentagon, which will have to find more than $40bn in savings between now and September, about 9% of its overall budget. But almost every government department, from aviation to the park service, will be hit, with cuts amounting to about 5% of their overall budgets. Only Medicaid and welfare benefits such as food stamps are exempted.
Obama met Republican congressional leaders Mitch McConnell andJohn Boehner and their Democratic counterparts Harry Reid and Nancy Pelosi at the White House on Friday morning but it was a largely pointless exercise. The meeting broke-up after less than an hour without any hint of a deal in the offing.
The impact of the budget cuts, known as the “sequester”, will be felt almost immediately in some areas but most will be a slow burn, not coming into effect until next month.
Obama, after being asked why he had not been able to push the Republicans in negotiating, said: “I am not a dictator. I’m the president.” He could not force them to sit down in a room to do a deal, he said. “So ultimately if Mitch McConnell or John Boehner say ‘We need to go catch a plane,’ I can’t have secret service block the doorway.”
Unlike previous budget clashes over the last two years, neither Obama or the Republicans showed any interest in trying to negotiate a last-minute deal. Obama said a country like America should not be forced to run its economy making deals on a month to month basis and he is looking for a long-term solution: what he referred to as a balanced approach, a combination of spending cuts and new taxes.
He predicted the economic recovery will continue but the sequester crisis would slow it up. “Washington sure isn’t making it easy,” he said. “It’s unnecessary, and at a time when too many Americans are still looking for work it’s inexcusable.”
The White House is hoping that as letters go out about forced leave and lay-offs and people begin to feel the impact of the cuts, the Republicans will come under pressure to negotiate. To humanise the crisis, he mentioned janitors cleaning up the empty Congress building after the departure of senators and representatives as the kind of people who would suffer.
He used a Star Wars metaphor to emphasise the point that he could not force the Republicans to make a deal. “I know that this has been some of the conventional wisdom that’s been floating around Washington that somehow, even though most people agree that I’m being reasonable, that most people agree 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.”
Even as the White House and Congress failed to resolve the sequester crisis, two more economic crises are looming. If Congress does not reach an agreement on a budget for this year by 27 March, the federal government faces the prospect of shut-down. Soon after that, Congress has to approve an increase in the federal debt limit, a move that two years ago created gridlock in Washington.
The House is due to vote next week on a deal to prevent a federal shutdown but there is a risk this could end up in a new standoff between the Republican-controlled House and the Democratic-controlled Senate.
In the sequester crisis, the Republicans want only cuts, on welfare rather than defence, and no new taxes. Obama wants cuts accompanied by closing tax loophole for the wealthy, in effect new taxes. Boehner, at the end of the White House talks Friday, was adamant that he will not contemplate any new taxes. “The discussion about revenue is over,” Boehner said.