WASHINGTON (TIP): President Barack Obama on Friday, March 1, signed an order that starts putting into effect across-the-board budget cuts known as the “sequester” after he and congressional leaders failed to find an alternative budget plan. The White House released a copy of Obama’s directive entitled “Sequestration Order for Fiscal Year 2013.” Government agencies will now begin to hack a total of $85 billion from their budgets between Saturday, March 2 and October 1. Now that the sequester has happened, attention shifts to the next key battle in Washington’s ongoing, partisan fiscal war. At the end of March, Democrats and Republicans must agree on how to continue funding the overall government if it’s not to shut down.
Unlike the sequester, a government shutdown would likely be much more disruptive and noticeable to the average American – and politically damaging, especially to Republicans. President Obama in his weekly address told the American people that a series of harmful budget cuts-called the sequester-have taken effect because Congress failed to act. Because Republicans in Congress refused to compromise to close tax loopholes for the wealthiest Americans, hundreds of thousands of Americans will lose their jobs or see their paycheck reduced, and middle class families will be hurt.
Obama said, “On Friday, I met with leaders of both parties in Congress to try and find a way forward in light of the severe budget cuts – known in Washington as “the sequester” – that have already started to inflict pain on communities across the country. “These cuts are not smart. They will hurt our economy and cost us jobs. And Congress can turn them off at any time – as soon as both sides are willing to compromise. “As a nation, we’ve already fought back from the worst economic crisis of our lifetimes, and we’ll get through this, too. But at a time when our businesses are finally gaining some traction, hiring new workers, bringing jobs back to America – the last thing Washington should do is to get in their way.
That’s what these cuts to education, research, and defense will do. It’s unnecessary. And at a time when too many of our friends and neighbors are still looking for work, it’s inexcusable. “Now, it’s important to understand that, while not everyone will feel the pain of these cuts right away, the pain will be real. Many middle-class families will have their lives disrupted in a significant way. “Beginning this week, businesses that work with the military will have to lay folks off. Communities near military bases will take a serious blow. Hundreds of thousands of Americans who serve their country – Border Patrol agents, FBI agents, civilians who work for the Defense Department – will see their wages cut and their hours reduced.
“This will cause a ripple effect across the economy. Businesses will suffer because customers will have less money to spend. The longer these cuts remain in place, the greater the damage. Economists estimate they could eventually cost us more than 750,000 jobs and slow our economy by over one-half of one percent. “Here’s the thing: none of this is necessary. It’s happening because Republicans in Congress chose this outcome over closing a single wasteful tax loophole that helps reduce the deficit. Just this week, they decided that protecting special interest tax breaks for the well-off and well-connected is more important than protecting our military and middle-class families from these cuts.
“I still believe we can and must replace these cuts with a balanced approach – one that combines smart spending cuts with entitlement reform and changes to our tax code that make it more fair for families and businesses without raising anyone’s tax rates. That’s how we can reduce our deficit without laying off workers, or forcing parents and students to pay the price. I don’t think that’s too much to ask. It’s the kind of approach I’ve proposed for two years now. A majority of the American people agree with me on this