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No proposals to roll back spending cuts

March 4, 2013

WASHINGTON (AP) — The White House and Republican congressional leaders offered no tangible proposals Sunday for rolling back automatic spending cuts that will slash $85 billion from the federal budget.

Each side cast blame on the other for the automatic, across-the-board spending cuts that took effect Friday, but gave little guidance on what to expect in the coming weeks. Republicans and Democrats pledged to retroactively undo the cuts but signaled no hints as to how that process would start to take shape. Republicans insisted there would be no new taxes and Democrats refused to talk about any bargain without them.

Obama and the Republicans have been fighting over federal spending since the opposition party regained control of the House of Representatives in the 2010 midterm elections. The sequester — the term used in Washington for the automatic spending cuts — was designed in 2011 to be so ruthless that both sides would be forced to find a better deal, but they haven’t despite having two years to find a compromise.

The $85 billion in cuts apply to the remainder of the 2013 fiscal year, which ends Sept. 30. But without a deal they will continue slashing government spending by about $1 trillion more over a 10-year period.

The public posturing by both sides in interviews aired on Sunday’s television news shows indicated that the spending cuts are here to stay for the near future. The Senate’s Republican leader Mitch McConnell called them modest. Republican House Speaker John Boehner isn’t sure the cuts will hurt the economy. The White House’s top economic adviser, Gene Sperling, said the pain isn’t that bad right now.

McConnell, the Senate Minority Leader, said Sunday that the automatic spending cuts that just started to kick in are a step toward curing Washington of its “spending addiction.”

“This modest reduction of 2.4 percent in spending over the next six months is a little more than the average American experienced just two months ago, when their own pay went down when the payroll tax holiday expired,” McConnell said. The payroll tax reduction was a temporary measure intended to stimulate the economy.

Boehner downplayed the dire warnings issued by President Barack Obama and Cabinet members about the impact of the spending cuts.

“I don’t know whether it’s going to hurt the economy or not,” Boehner said. “I don’t think anyone quite understands how the sequester is really going to work.”

Sperling downplayed the immediate impact of the cuts, but cautioned that their impact would grow in the months ahead.

“On Day One, it will not be as harmful as it will be over time,” Sperling said.

Republicans insisted there would be no new revenue from taxes .

“That’s not going to work,” said Republican Sen. Kelly Ayotte. “If we’re going to increase revenue again, it’s got to go to the debt with real entitlement reform and real tax reform when you actually lower rates. ... I’m not going to agree to any more tax increases that are going to go to increase more government.”

All of this comes ahead of the next major budget hurdles, with less than a month to negotiate a funding plan to avert a government shutdown after March 27.

If the parties can manage to avoid a government shutdown, yet another fiscal fight looms. In May, Congress will confront a renewed standoff on increasing the government’s borrowing limit — the same debt-ceiling issue that, two years ago, spawned the law forcing the current spending cuts in the first place.

Failure to raise the borrowing limit could force the U.S. to default on debt for the first time in history.

Boehner said the Republican-controlled House would move this week to pass a measure to keep government open through Sept. 30. McConnell said a government shutdown was unlikely to come from his side of Capitol Hill. The White House said it would dodge the shutdown and roll back the cuts, which hit domestic and defense spending in equal share.

“We will still be committed to trying to find Republicans and Democrats that will work on a bipartisan compromise to get rid of the sequester,” Sperling said.

Senate Democrats and Senate Republicans last week put forward alternative measures that would have avoided the cuts, but each side voted down the others’ proposals. The House Democrats proposed an alternative but the House Republicans did not let them vote on it.

House Republicans twice passed alternatives last year.

Obama has phoned lawmakers but it isn’t clear to what end; the White House refused Sunday to release the names of lawmakers Obama phoned. Boehner and McConnell said they had a productive meeting with Obama on Friday, but it didn’t yield a deal.

“Well, no one can think that that’s been a success for the president,” said Mitt Romney, Obama’s unsuccessful rival in November’s election. “He didn’t think the sequester would happen. It is happening.”

Obama said the automatic budget cuts were not necessary and blamed the Republicans for refusing to compromise.

“It’s happening because Republicans in Congress chose this outcome over closing a single wasteful tax loophole that helps reduce the deficit,” Obama said in his weekly radio and Internet address Saturday

The president said the cuts would cause “a ripple effect across the economy” that would worsen the longer they stay in place, eventually costing more than 750,000 jobs and disrupting the lives of middle-class families.

The immediate impact of the spending cuts on the public was uncertain.

The Defense Department will absorb half of the $85 billion required to be sliced between now and the end of the budget year on Sept 30, exposing civilian workers to furloughs and defense contractors to possible cancellations. Defense Secretary Chuck Hagel, only a few days on the job, said: “We will continue to ensure America’s security” despite the challenge posed by an “unnecessary budget crisis.”

Still, fear and anger are consuming military communities, where economies are deeply tied to the forces there. Preparing for a worst-case scenario, Navy officials have plans to force mandatory furloughs on roughly 186,000 civilian employees across the country. Shipyards from coast to coast have outlined cost-cutting plans to delay huge maintenance contracts on nuclear submarines and aircraft carriers.

Obama was holding out hope that as Americans start feeling the effects of the spending cuts, public pressure will force lawmakers back to the table. Ever wary that such fiscal fiascos could jeopardize the rest of his second-term agenda, Obama vowed in his weekly address to keep pushing reforms on immigration, pre-kindergarten education, gun violence and transportation.

McConnell spoke to CNN’s “State of the Union.” Boehner was interviewed on NBC’s “Meet the Press.” Sperling appeared on ABC’s “This Week,” NBC and CNN. Ayotte appeared on ABC. Romney was a guest on “Fox News Sunday.”

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Associated Press writer Philip Elliott contributed to this report.

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