White House meeting ends with no deal on budget cuts

 

 

 

 

 

 

 

 

 

 President Obama: "Washington didn't make it easy at a time when businesses have began to get some traction" US political leaders have left last-ditch talks at the White House without a deal to avoid steep budget cuts.

 

 Obama blamed Republicans' refusal to allow any tax rises for the negotiations' failure, calling the sweeping $85bn in cuts "unnecessary" and "inexcusable". Congress has left for the weekend, with the spending cuts due to be written into the budget by Friday's end.

The IMF has warned the cuts could slow global economic growth. Analysis in the US suggests the nation's economic output, or Gross Domestic Product (GDP), could grow by just 1.4% in 2013 if the cuts are not delayed or replaced. US GDP grew by 2.2% in 2012.

Mr Obama warned the economy would suffer because Congress had not managed to reach a deal.

"We shouldn't be making a series of dumb, arbitrary cuts to things that businesses depend on and workers depend on," he said after Friday's meeting. "Not everyone will feel the pain of these cuts right away. The pain, though, will be real."

The US president attacked congressional Republicans for "refusing to budge" on closing any tax loopholes, arguing they were protecting tax breaks for the "well-off and well-connected". Mr Obama said he believed a sufficient number of lawmakers were willing to make a deal, even if their leaders were not.
"There's a caucus of common sense," he said. "It's just a silent group right now."

 

Republican House Speaker John Boehner, meanwhile, reiterated his party's refusal to allow taxes to rise and challenged the gridlocked US Senate to pass a bill first before the House acted on a plan.
"The American people know that Washington has a spending problem," Mr Boehner said as he left the White House on Friday.
"Let's make it clear that the president got his tax hikes on 1 January. The discussion about revenue, in my view, is over. It's about taking on the spending problem."

The cuts are meant to hurt - they were deliberately designed two years ago to be so brutally painful that politicians of left and right would be forced to agree on a better way of balancing the books.
The cuts are split roughly evenly between military and domestic programmes, but effects will be felt over time rather than immediately.

Budget bills from both parties were defeated in the Senate on Thursday. A Democratic plan proposing nearly $30bn in future cuts in defence spending and a minimum tax rate on incomes exceeding $1m, was blocked by Republicans.

Mr Obama inadvertently offered the beleaguered Washington press corps a moment of levity on Friday. Mocking the Washington "conventional wisdom" that he had the power to force Republicans to negotiate, he said:

"Most people agree I'm presenting a fair deal. The fact that they don't take it means that I should somehow, you know, do a Jedi mind meld with these folks and convince them to do what's right."
Washington wags quickly noted Mr Obama had violated the prime directive of nerddom, conflating Star Wars and Star Trek: Jedis have a "mind trick", while Star Trek Vulcans employ a "mind meld".

Although Republicans and Democrats both say they want to reduce the budget deficit, estimated at $845bn this year, the president has accused Senate Republicans of not allowing the cuts to proceed.

But Republicans contend that the president and his advisers created and proposed the idea of the cuts during budget negotiations in 2011.

The cuts are scheduled to be signed into the federal budget by President Obama by on Friday.
But now attention will also turn to the next congressional challenge - a possible shutdown of the US government if no funding bill is passed in the next month. On 27 March a temporary federal budget that has kept the federal government running since 2012 is due to expire.

House Republicans have said they will vote on a bill next week to fund the government through the end of the fiscal year, on  the 30th of  September, but keep in place some automatic cuts taking effect on Friday.