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Economic Slow Down Predicted As Sequester Looms

Economy Slow Down Predicted As Sequester Loomsi
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February 22, 2013 12:38 PM
U.S. President Barack Obama is calling on Congress to take action to prevent $85 billion in automatic spending cuts -- known as the "sequester" -- from going into effect on March first. The sequester deadline resulted from a battle over raising the debt ceiling in August of 2011. Congress and the president agreed on a future threat of severe mandatory budget cuts as a way of forcing action to cut the national deficit. But the threat did not work, and now, the cuts are poised to happen within days -- unless Congress finds an elusive compromise to cut spending. VOA Congressional Correspondent Cindy Saine has the story.]]
Cindy Saine
U.S. President Barack Obama is calling on Congress to take action to prevent $85 billion in automatic spending cuts -- known as the "sequester" -- from going into effect on March first.   The sequester deadline resulted from a battle over raising the debt ceiling in August of 2011.  Congress and the president agreed on a future threat of severe mandatory budget cuts as a way of forcing action to cut the national deficit.  But the threat did not work, and now, the cuts are poised to happen within days -- unless Congress finds an elusive compromise to cut spending. 

Democrats and Republicans in Washington are once again approaching a showdown over how to reduce the national debt -- with Republicans calling for cuts in domestic spending programs and Democrats asking that tax loopholes be closed on the wealthiest Americans.

This time, the Republicans who control the House of Representatives are threatening to let the cuts take effect. “The sequester will be in effect until there are cuts and reforms that put us on a path to balance the budget over the next 10 years, period!” explained House Speaker John Boehner.

President Obama is warning the cuts would be brutal.

"These cuts are not smart. They are not fair. They will hurt our economy," Obama stated. "They will add hundreds of thousands of Americans to the unemployment roles. This is not an abstraction. People will lose their jobs."

Democratic Congressman Steny Hoyer blames Republicans.

"Thousands of Americans will lose their jobs or be furloughed, including teachers, researchers, law enforcement agents and military contractors.  Everyone should be clear that sequestration is a Republican policy," he said. "And it is a bad policy."

But some Republicans, like Senator Rand Paul of Kentucky, think the sequester does not really go far enough.

"Few people understand that the sequester does not even cut government spending.  It just slows the rate of growth," he noted.

The Defense Department says troop training and maintenance of aircraft and ships would be delayed or suspended if the cuts take effect.

And some 800,000 civilian defense workers would each be forced to take one day a week off -- without pay.

Some economists say the cuts could have a ripple effect on the entire economy -- and on services Americans depend on. 

"A lot of workers will have to be furloughed from their jobs and those workers perform jobs like inspecting the safety of our food and water," said Joan Entmacher, an expert on family economic security.

Since U.S. federal law mandates inspection of meat, poultry and egg products, production of those commodities will shut down on days inspectors are furloughed.  Mark Dopp of the American Meat Institute says the furloughs would not threaten the safety of American meat but would have a big impact on the economy.

"Not only does it affect the inspectors who are furloughed, it would affect the more than 500,000 people who work every day in meat and poultry processing facilities, from the slaughter facilities to the processing facilities," said Dopp. "It would also effect the more than one million cattle, hog and turkey producers..."

With only a few days left until the cuts take place, it is not clear whether President Obama will, once again, invite congressional leaders to the White House to try to hammer out a compromise budget deal.

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by: JKF from: Ottawa, Canada
February 23, 2013 3:30 PM
As a Canadian I get extremely concerned when things do not go well in the US. Day by day, I continue to see the US economy struggling. The politicians need to stop granstanding and dealing with peripheral issues! Time to face reality and get to the core of the economic problems: increases in productivity, that do not result also in increases in employment are just indicative that the sit for workers continues to deteriorate, bad for US workers very bad for US economy; globalization continues to have a negative impact on many US producers, the EU faces same sit, because the global producers are not abiding by fair trade practices; US producers must regain, at least, the internal US markets, to continue producing jobs for Americans; the internal markets must be restructured, so that US producers have at least the environmental protection, labour standards protection, safety standards protection, footprint advantage over the global producers. The global producers are destroying the environment; producing, in many cases dangerous products; under dangerous labour conditions; and using huge amounts of non-renewable hydrocarbon fuels to get the products to the US. The population at these global producers are being impacted extremely negatively by the producers discharging toxic contaminants with few controls, thus having/damaging air, water, food contaminated, containing massive amounts of toxic chemicals. By allowing their products into US markets, in fact, not only US jobs are lost, but the US is contributing to the terrible conditions beeing generated at the global producer nations. It is insane to continue supporting this bad type of globalization. Bad for US workers and bad for global producer populations.

by: Michael Wing from: Indiana
February 22, 2013 9:53 AM
When will all the hand wringing end? There are no cuts taking place. There is a potential reduction in the rate of growth for the projected fiscal years. We will still spend more money in all areas than we did last year. This Chicken Little 'Sky is falling!' routine needs to come to a halt. And Mr. President, the blame game is also getting toresome. Calling it a Republican policy is simply wasting time and energy. The record shows that your people proposed it, Republicans and Democrats voted for it, and you signed it into law. Telling us that we passed it because we knew we couldn't allow it to occur is as silly as Nancy Pelosi telling us we needed to pass the Health Care bill so we could find out what was in it. It's time now to stop campaigning, quit trying to scare the American people into supporting your one-sided approach, and start governing. Leaders lead - they don't stand and whine until they get their way. Start leading.

by: Shannyn Svendsen
February 22, 2013 9:30 AM
Sad that instead of having a Presidential leader that can say "we can do this!", we have a President that uses fear tactics to minimize the possibility of securing even a paltry 2% cut in federal spending.

My expectation -- $20 trillion in debt by the time Barack leaves office. I I am encouraging my children to move abroad rather than shoulder the immense debt that Barack and Bush have placed upon our country. The US is on its decline -- and opportunities for growth and development are easier to find abroad.

by: Joan Secrest from: Ft. Myers, FL
February 22, 2013 9:24 AM
THis economy has already come to a stop. If you voted for Obama, you are getting what you deserve. I have no sympathy anymore. The AMerican people (many more than once) voted for this and they are getting it. millions of AMericans that were working when he was first elected are not working now. Less are working every month. He is doing nothing and blocking the REpublicans from doing what we know works. He continues to do what we know won't work. If the press supports him and will not allow the truth to be told. America is done.

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