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  • bluecheese4u bluecheese4u Feb 5, 2013 12:49 PM Flag

    Obama calls on Congress to pass spending cuts, tax changes to delay sequester

    Obama calls on Congress to pass spending cuts, tax changes to delay sequester

    By Zachary A. Goldfarb,
    Tuesday, February 5, 9:16 AM

    President Obama on Tuesday will call on Congress to pass a small package of spending cuts and tax changes to delay deep reductions in domestic and defense spending from starting next month, a White House official said.

    The official did not name any specific spending cuts or tax changes — which ultimately could include the closing of loopholes or deductions benefiting the wealthy or select industries — but said they should postpone the automatic spending reductions, known as the sequester, for a few months.

    Obama will make a statement at 1:15 p.m at the White House. Any plan passed by Congress would have to reduce borrowing by tens of billions of dollars through a combination of alternative spending cuts or tax increases. It would be a stopgap measure with only weeks to go until the March 1 deadline for the onset of sequestration.

    While Republicans, who have been warming to the idea of allowing the sequester to go forward, may agree to alternative spending cuts, the tax changes would likely be a flashpoint. Obama has made clear he expects wealthy Americans and select industries, such as finance and oil and gas, to pay more taxes toward deficit reduction.

    Responding to the White House on Tuesday, House Speaker John Boehner (R-Ohio) reaffirmed House Republicans’ opposition to tax increases.

    “President Obama first proposed the sequester and insisted it become law. Republicans ... believe there is a better way to reduce the deficit, but Americans do not support sacrificing real spending cuts for more tax hikes,” Boehner said in a statement. “The president’s sequester should be replaced with spending cuts and reforms that will start us on the path to balancing the budget in 10 years.”

    The sequester was a mechanism that Congress and the White House designed in 2011 to force policymakers to generate significant deficit reduction over the next 10 years. While they have made progress on that front — accumulating over $2 trillion in deficit savings — they have not come to a broad agreement as many hoped.

    The sequester would slice $1.2 trillion in domestic and defense spending over 10 years, indiscriminately cutting most programs. (Some programs, such as Medicaid and food stamps, are exempt.)

    “While we need to deal with our deficits over the long term, we shouldn’t have workers being laid off, kids kicked off Head Start, and food safety inspections cut while Congress completes the process,” the White House official said.

    “With our economy poised to continue to strengthen this year, the president will make clear that we can’t see another self-inflicted wound from Washington,” the official added. “The president will urge Congress to come together and act to ensure these devastating cuts to defense and job-creating programs don’t take effect.”

    The “fiscal cliff” deal at the start of the year postponed the sequester for two months.

    Obama favors a broader plan to permanently end the sequester and replace it with a series of reductions in health care and other mandatory spending as well as the elimination of tax breaks that benefit the wealthy and industries.

    Republicans favor deep cuts to spending without raising taxes any more.

    washingtonpostDOTcom/business/economy/obama-to-propose-spending-cuts-tax-changes-to-delay-sequester/2013/02/05/b8fa7aec-6faa-11e2-8b8d-e0b59a1b8e2a_story.html

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