News / USA

Automatic US Spending Cuts Loom

Michael Bowman

Under current U.S. law, automatic cuts to domestic programs and national defense will begin in 2013, because a congressional committee failed to agree on trimming America’s federal deficit. Already, many lawmakers say they want to shield favored federal programs from the budget ax, despite a veto threat from President Barack Obama.

A budget deal earlier this year specified there would be $1.2 trillion in automatic cuts, known as a "sequester," if a special “supercommittee” failed to trim the deficit by an equal amount over a 10-year period. The supercommittee’s failure leaves the sequester in place, at least for now.

Related report by Bernard Shusman

President Obama says austerity is on the way. “One way or another, we will be trimming the deficit," he said.

That means major cuts to a range of programs, from farm subsidies to transportation to payments to medical providers for treating the elderly. It also means deep cuts for the defense budget.

The looming sequester angers lawmakers across the ideological spectrum.  Many Democrats oppose cuts to infrastructure and other domestic programs.

And Republicans say security will suffer if the Pentagon budget is slashed. Congressman Howard McKeon said, “National defense has contributed enough to deficit reduction.”

Defense Secretary Leon Panetta warned of a “hollowed out” U.S. military. “If the sequester goes into effect and it doubles the number of cuts, then it will truly devastate our national defense," he said.

The sequester is a blunt budget tool which leaves no room to prioritize spending.  Policy analyst Bruce Katz  said, “You can cut ‘dumb’, you can cut ‘smart’. Sequestration across the board sounds to me like a ‘cut dumb’ strategy.”

But White House Press Secretary Jay Carney says the sequester’s painful consequences are intentional, and needed, to force Congress to act. “It was designed with a specific purpose in mind, which was to [force Congress to act]," he said.

Congress may try to pass legislation blocking the spending cuts.  President Obama says a new budget plan is welcome, but only if it reduces the deficit as much as the sequester. “Already, some in Congress are trying to undo these automatic spending cuts. My message is simple: No. I will veto any effort to get rid of those automatic spending cuts," he said.

The veto threat could set the stage for another budget battle next year, when President Obama, all House seats, and one-third of the Senate are up for election.

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