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No deal: Last-ditch meeting yields no new plan to avoid cuts

March 01, 2013|By Kathleen Hennessey and Michael A. Memoli

WASHINGTON -- President Obama and congressional leaders huddled in the Oval Office on Friday morning but the last-ditch effort failed to produce a compromise to forestall $85 billion in automatic spending cuts all sides say they want to avoid. 

The meeting, which lasted less than an hour, yielded no new plan to dodge a series of across-the-board budget cuts due to begin hitting most federal agencies and programs at midnight Friday.

The House speaker, John Boehner (R-Ohio), emerged with the same talking points he has been repeating for weeks. He said he would not agree to the president’s demand that the cuts be replaced with a deficit reduction deal that includes new taxes on upper-income earners.

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"Let's make it clear the president got his tax hike on Jan. 1. The discussion about revenue, in my view, is over. It's about taking on the spending problem in Washington,” Boehner told reporters.

Obama repeated his warnings that the spending cuts would hurt middle-class families.

He called the budget cuts “dumb” and “arbitrary,” and blamed Republicans in Congress for not agreeing on a plan to replace the cuts in part with revenue raised by closing tax breaks for wealthy taxpayers and corporations.

“It’s unnecessary at a time when too many Americans are looking for work,” Obama said after the meeting. “It’s inexcusable.”

Obama and lawmakers agreed on the automatic spending cuts in the 2011 budget deal. The so-called sequestration was intended to be so loathesome that it would force Republicans and Democrats to compromise on a larger deficit and debt reduction deal.

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But Republican lawmakers and the White House have not found middle ground, and the final meeting was too little too late to end the stand-off.

Before the meeting, Senate Minority Leader Mitch McConnell (R-Ky.) ruled out any “last-minute, back-room deal” to replace the spending reductions with an alternative plan, and “absolutely no agreement to increase taxes.”

After the meeting, Boehner raised yet another looming budget fight – the expiration of the government funding resolution on March 27.

The Republican-led House, Boehner said, would move a continuing budget resolution through the chamber next week. At that point, he said, Democrats in the Senate must either pass the plan or send back an alternative to avoid a full-blown government shutdown.

“I'm hopeful that we won't have to deal with the threat of a government shutdown while we're dealing with the sequester at the same time,” he said. “The House will act next week, and I hope the Senate will follow suit.”

That funding plan would essentially ensure the sequester cuts continue through the end of the fiscal year, locking in routine government operations at the new, lower levels, while restructuring the cuts to defense, military construction and veterans accounts.

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