White House warns sequester will hurt middle class
For months, President Obama has been urging Congress to offset the $1.2 trillion in sweeping spending cuts set to kick in on March 1. Now, with just three weeks left to act, the White House is pressing the fact that these across-the-board cuts would hurt the constituency that every politicians cares about: the middle class.
The so-called "sequester" cuts, the White House said in a fact sheet today, "threaten thousands of jobs and the economic security of the middle class will take effect. There is no question that we need to cut the deficit, but the President believes it should be done in a balanced way that protects investments that the middle class relies on."
Instead of letting the cuts go into effect, Jason Furman, principal deputy director of the National Economic Council, told reporters today that the White House wants Congress "buy the time it needs" to work out a comprehensive deficit and debt reduction package that includes entitlement reform and tax reform.
"The whole goal of buying that time is not for the sake of buying time," he said. "It's for the sake of buying time to do something that's a lot bigger and a lot better than the sequester in terms of entitlement reform, tax reform, stabilizing our deficit and ultimately the goal being creating jobs and economic growth."
The fact sheet the White House released lays out the way certain agencies could be impacted by the sequester cuts, which would amount to $85 billion this year.
Around 70,000 children would lose Head Start and Early Start services, the White House says, while cuts to Title I education funds would be eliminated for more than 2,700 schools. Additionally, cuts to special education funding would eliminate federal support for more than 7,200 teachers, aides, and other staff.
Small businesses, which lawmakers cast as the lifeblood of job creation, would lose up to $540 million in loan guarantees from the Small Business Administration. Emergency unemployment benefits, meanwhile, would be cut by as much as 9.4 percent.
Cuts to the Mental Health Block Grant program would result in over 373,000 seriously mentally ill adults and seriously emotionally disturbed children not receiving needed mental health services, the White House says.
The fact sheet lists a number of agencies -- including the IRS, the FBI and FEMA -- that would be less equipped to assist people.
Furman said that the effects would be immediate in some agencies and more gradual in others. "So there's no easy answer to say what the world is going to look like on March 2nd," he said. "We just know that these impacts -- while not all of them immediate -- if we don't take action, they will take place."
The $1.2 trillion sequester cuts, which were initially set to kick in on Jan. 1, emerged out of Congress' 2011 budget negotiations. Congress agreed that if a congressional "supercommittee" couldn't come up with an acceptable deficit reduction plan, Congress would just slash $1.2 trillion from the budget over 10 years -- half coming from defense spending and half from non-defense. Nearly everyone in Washington agrees that indiscriminately slashing $1.2 trillion would damage the economy, but lawmakers can't agree on a deficit reduction package with which to replace the cuts.
However, given the economic damage the sequester would inflict, Congress this year stalled the cuts for two months -- which is why they're set to go into effect in March.
Stalling the cuts from January to March, however, has only exacerbated the problem, the White House argues in its fact sheet, noting that the government has fewer months to enact the first year's worth of cuts -- not the full year. "These large and arbitrary cuts will have severe impacts across the government," the fact sheet says.
The White House puts the blame squarely on Republicans, noting that Mr. Obama has worked with Congress to enact more than $2.5 trillion in cuts. The fact sheet says the president is interested in enacting more cuts and closing tax loopholes to raise revenues.
"Our economy is poised to take off but we cannot afford a self-inflicted wound from Washington," the fact sheet says. "We cannot simply cut our way to prosperity, and if Republicans continue to insist on an unreasonable cuts-only approach, the middle class risks paying the price."
Republicans, meanwhile, are of course blaming the president for the sequester.
"We know the President's sequester will have consequences," Senate Minority Leader Mitch McConnell, R-Ky., said in a statement. "What we don't know is when the President will propose a plan to replace the sequester with smarter spending cuts and reforms."
