US & Canada

Sequester: White House budget cuts talks planned

From left: Senator Harry Reid, President Barack Obama, House Speaker John Boehner and Representative Nancy Pelosi in Washington DC 27 February 2013
Image caption President Obama has said he will only accept a plan that includes tax rises as well as spending cuts

Congressional leaders head to the White House on Friday to discuss a series of deep budget cuts, on the day the measures are due to take effect.

A White House spokesman said the talks would be a "constructive discussion" about how to avert the scheduled cuts.

But some opposition Republicans said the talks are a sign the White House is not serious about seeking a solution.

Mr Obama says the $85bn (£56bn) budget cuts will harm the US economy if Congress fails to avoid them.

Some Republicans, meanwhile, have accused the president of using "scare tactics" to force Congress to raise taxes.

Looming deadlines

Analysts say a deal to replace the across-the-board, automatic spending cuts is unlikely to be struck before Friday.

The budget cuts, known in Washington DC as the sequester, were devised in 2011 as an intentionally painful cudgel to encourage Democrats and Republicans in Congress to strike a deal to reduce the US government's $1.1tn budget deficit.

Amid partisan gridlock in Washington, the two sides have not agreed to another budget plan, so the cuts are due to take effect on Friday.

Meanwhile, Congress is just weeks away from its next budget battle.

On 27 March a temporary budget that has kept the federal government running since the last budget ran out is due to expire.

Failure by Congress to enact a new stop-gap budget could see parts of the federal government shut down.

'No alternative'

On Friday, Republican House Speaker John Boehner and House Democratic leader Nancy Pelosi, as well as the Senate's Democratic majority leader, Harry Reid, and Republican minority leader Mitch McConnell, are due to attend the White House talks.

Ahead of the meeting, White House press secretary Jay Carney said the president would only agree to a deal that included some tax increases and spending reductions smaller than those in the sequester budget cuts.

"There is no alternative in the president's mind to balance," he told reporters.

But Republicans have said they would not allow further tax rises.

"One thing Americans simply will not accept is another tax increase to replace spending reductions we already agreed to," said Mr McConnell, the top Republican in the Senate.

Several draft bills to avert the sequester are being prepared in Congress, although analysts say none of them are likely to pass both chambers.

In the Senate, Democrats are proposing an approach that Mr Reid has called "balanced". It would pair targeted spending cuts with repeal of some tax loopholes to generate additional revenue.

Republicans are working on a number of plans. Under one, Congress would give Mr Obama authority to put off Friday's budget cuts by choosing where in the federal budget the spending would be reduced.

But the White House has rejected this approach, and some Republicans are wary about handing more power to the White House.

Meanwhile, members of Mr Obama's cabinet have warned that allowing the cuts to go through would force them to scale back on public services.

'Gradual approach' recommended

The Department of Homeland Security has announced the release of hundreds of illegal immigrants from jails, and the Pentagon has said it has delayed scheduled maintenance on aircraft carrier USS Abraham Lincoln.

Most of the Pentagon's 800,000 civilian employees would be placed on unpaid leave for a total of 22 days, and training programmes would be dropped, the Pentagon has also said.

And on Wednesday, Federal Reserve Chairman Ben Bernanke warned a congressional committee that the sequester budget cuts would hurt the US economy.

"What I am advising is a more gradual approach," Mr Bernanke said.

"I'm not saying we should ignore the deficit, I am not saying we shouldn't deal with long-term fiscal issues. But I think that, from the perspective of our recovery, a more gradual approach would be constructive."

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