Senate fails to avoid budget cuts
Updated: 2013-03-01 12:35
By Joseph Boris and Chen Weihua in Washington (China Daily)
Senate Democratic leaders finish a news conference on Capitol Hill in Washington on Thursday, after answering questions about the automatic spending cuts that take effect on Friday. J. Scott Applewhite / AP Photo
US lawmakers failed on Thursday to reach an 11th-hour deal to avert spending cuts across the federal government, making their implementation inevitable.
In the Senate, one bill each from Democrats and Republicans died without attracting enough support to be brought to a formal vote.
The Democrat-controlled chamber rejected an up-or-down vote on a Republican plan to soften the impact of the cuts, which take effect on Friday and are known collectively as the sequester, by requiring President Barack Obama to propose other reductions that would be less disruptive to crucial government functions.
Senators also defeated, in a largely party-line vote, a Democratic plan to block until 2014 the $85 billion in cuts and instead increase taxes on millionaires and reduce farm-program funding. That measure also called for spreading the cuts over a decade.
For now, it's unclear what impact the sequester may have on the American public. Obama and others in his administration have warned that furloughs of federal workers could result in long lines and delays at US airports, the closing of national parks and layoffs of teachers.
Although the deadline for avoiding the sequester was breached, exhausting the last chance for Congress to dodge the measure it and Obama put in place in 2011, leaders of both parties in the Senate and the House of Representatives were to meet with the president on Friday to discuss the next steps.
Debate over the sequester has been marked by partisan accusations of who is to blame and which party's agenda would reduce the federal budget deficit without stunting economic growth. The gridlock in Congress has continued since enactment of the Budget Control Act of 2011, which mandated cuts so deep and potentially unpopular that lawmakers claimed they would be pressured to find alternatives.
The cuts, split between the defense budget and nearly all other forms of government spending, are set to total $1.2 trillion over nine years, and are in addition to the $85 billion affecting the remainder of Washington's fiscal year, which ends on Sept 30.
This year's cuts hit almost all federal agencies equally, without regard to their individual effectiveness or relative value to Americans.
For Democrats, including Obama, negotiations on spending cuts must include tax increases on wealthy Americans, which Republican congressional leaders and many of the party's members flatly oppose.
On Thursday, Obama criticized Republican senators for spurning the Democrats' proposal and accused them of siding with the rich on fiscal policy. "Instead of closing a single tax loophole that benefits the well-off and well-connected, they chose to cut vital services for children, seniors, our men and women in uniform and their families," he said in a prepared statement. "They voted to let the entire burden of deficit reduction fall squarely on the middle class."
Obama has presented a plan that he says stresses a balance of "smart" spending cuts and a repeal of loopholes in the US tax code. "As a nation, we can't keep lurching from one manufactured crisis to another," the president said, referring to the 2011 sequester law, which itself grew out of a partisan fight over raising the US government's debt limit.
On Jan 2, Congress enacted an agreement with Obama to avoid most of the anticipated tax increases that would have come from another crisis, the so-called fiscal cliff. On top of sequestration, Washington faces a potential crisis from the expiration on March 27 of stopgap funding for government spending known as the "continuing resolution". To avoid a shutdown of many nonessential government functions, lawmakers will have to approve a new "CR". House Speaker John Boehner, an Ohio Republican and one of those set to attend Friday's White House meeting, said on Thursday in a statement: "It's embarrassing that after 15 months Senate Democrats still haven't passed a single sequester-replacement bill. Now that today's political stunt to raise taxes has failed,
it's time for the president and Senate Democrats to do the hard work that is necessary to pass a bill in the Senate so we can begin to resolve this issue."
On Wednesday, State Department spokesman Patrick Ventrell said the budget cuts could lead to long visa waiting times in China and other countries. He said the State Department has recently hired a raft of new consulate officers who were sent to busy US visa-processing centers in China, India and Brazil.
"It's good for the American economy," Ventrell said of foreign travel. "And so we are concerned that if sequestration happens, we could have major setbacks in really the Herculean effort we've made to reduce wait times."
Eswar Prasad, a professor of international trade and economics at Cornell University, expressed concern about the potential impact of sequestration on the global economy. Both it and the US economy are fragile, with uncertain growth prospects, he said.
"The fiscal drag and economic uncertainty spawned by this sign of policy gridlock in Washington is going to hold back the US economic recovery both directly and through its negative effects on business and consumer confidence," said Prasad, a former China division chief for the International Monetary Fund.
"If the sequester does damage the US economic recovery, the world will once again have to turn to China as the main contributor to world growth in 2013."
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(China Daily 03/01/2013 page1)