WASHINGTON — The still-weak US economy is less than two weeks away from taking a new fiscal blow, with congressional Republicans and the White House more intent on blaming each other for the latest budget crisis than on negotiating a deal to avoid $85 billion in automatic government spending cuts. The looming cuts that would take effect March 1 were conceived to overcome a budgeting standoff two years ago, and they were designed to be so distasteful to the core interests of both Republicans and Democrats that they would force more targeted reductions. The effects of the maneuver will stretch on for a decade, slashing nearly $1 trillion more out of federal spending. Even the most optimistic assessments say the deep cuts would trim at least a half percentage point off economic growth and add a quarter point to already high unemployment of about 8 percent. The battle is the latest in a series of fiscal fights since Republicans retook control of the House of Representatives in 2010, determined to blunt President Barack Obama's legislative agenda, shrink the size of government, cut spending and lower taxes. Last-minute bargaining has so far averted dramatic outcomes like the shutdown of government for lack of funding or a US default on its loan payments because of Congress denying the government's need to increase its borrowing limit. But with no deal in sight this time, the bitter budget cuts look likely to take effect. Congress is not even returning to session until Monday, four days before the March 1 deadline to reach a compromise. The cuts will hit the military, education, research and development and even core security agencies including the FBI, the Coast Guard and border patrols. Obama called it a “meat cleaver” approach to debt reduction. At issue is a spiraling national debt that has surpassed $16 trillion, pushed to that extraordinary level by declining tax revenue and the vast sums of money that Obama pumped into the economy after taking office during the worst economic downturn since the Great Depression of the 1930s. The national debt had already doubled during President George W. Bush's eight years at the White House and was about $10.6 trillion when he left office in 2009. The cuts, as dangerous as they may be for the US economy and its slow recovery from the Great Recession, are only one symptom of the partisan divide crippling American politics. The ideological gap grew more acute with the ascent of the conservative tea party movement that propelled Republicans to retake the House in 2010. After that election, Republicans were able to block most of Obama's legislative agenda. The president has seemed determined to break out of that legislative box since his convincing re-election in November elections, which also saw his fellow Democrats gain seats in the House and widen their majority in the Senate. With talks on a compromise on this latest fiscal crisis non-existent, Obama has turned to campaign-style events directed at voters, hoping to pressure Republicans to give ground. Obama campaigned for re-election on promises to make the economy fairer, restore opportunity for the middle class and raise taxes on the wealthiest. He won a partial victory in December when Republicans, divided and unable to rally behind an alternative plan put forward by House Speaker John Boehner, agreed to allow Bush-era tax cuts to expire for Americans earning more than $400,000 a year. Obama had initially pushed for the taxes to expire for those making more than $200,000 a year. Now the president, pushing a hard bargain over the spending cuts, wants to further raise taxes on certain wealthy individuals and corporations by eliminating loopholes that allowed them to vastly reduce reported income. “So now Republicans in Congress face a simple choice,” Obama said Tuesday. “Are they willing to compromise to protect vital investments in education and health care and national security and all the jobs that depend on them? Or would they rather put hundreds of thousands of jobs and our entire economy at risk just to protect a few special-interest tax loopholes that benefit only the wealthiest Americans and biggest corporations?” – AP
