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Automatic budget cuts are almost certain

The ax is set to fall March 1 — with the first installment of $1.2 trillion in reductions over the next decade — because lawmakers can't agree on an alternative.

February 09, 2013|By Jim Puzzanghera and Richard Simon, Washington Bureau

"Instead of a 5% cut being a part of Congress' plan to help the economy, they're going to devastate the economy further with across-the-board cuts that don't take into account specifically what they are cutting," said Anzelmo, former superintendent of the Colorado National Monument.

Economists project the budget cuts would reduce the nation's total economic output by about 0.6 percentage points this year, a significant hit when growth remains sluggish. Combined with tax increases that began last month and some other federal changes, the economy would expand about 1.5% in 2013 — half of what it could grow without the fiscal tightening, the Congressional Budget Office said.

For that reason, Obama pushed Congress last week to delay the automatic budget cuts for a couple more months. He wants more time to work with lawmakers on a better deficit-reduction plan.

"Deep, indiscriminate cuts to things like education and training, energy and national security will cost us jobs, and it will slow down our recovery," Obama said. "It's not the right thing to do for the economy. It's not the right thing for folks who are out there still looking for work."

Republicans aren't fond of the automatic budget cuts either, particularly those set for the Defense Department.

"I think it's taking a meat ax to our government — a meat ax to many programs — and it will weaken our national defense," House Speaker John A. Boehner (R-Ohio) said last week.

Still, he wants to see government spending reduced. Republicans have tried unsuccessfully to replace the automatic cuts with more selective ones that target entitlement spending over defense programs.

"The problem is if you eliminate all defense spending — grow daisies in the Pentagon — you haven't touched the problem," McKeon said. "The real problem is the mandatory spending."

But after agreeing in January to a two-month delay as part of the fiscal-cliff deal, reducing the amount to be cut this year by $24 billion, some Republicans said they would rather see the automatic cuts than push off again what they believe is the necessary shrinking of the federal government.

And while liberals have argued the automatic cuts would cause huge economic damage — some have dubbed them "an austerity bomb" — conservatives say the impact is vastly overstated.

"There are no cuts, just a very modest reduction in the baseline growth of government," said Dan Mitchell, a senior fellow at the Cato Institute in Washington. "The worst that can be said is that a few parts of the budget, such as defense, are disproportionately affected."

But those who would be most affected see it differently.

"I think everybody believed that we wouldn't get to this point, but we're here," said Dennis Kenneally, a retired general and executive director of the Southwest Defense Alliance, a defense advocacy group. "When you thought it couldn't get worse, it did."

Staff writer David S. Cloud in the Washington bureau contributed to this report.

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