Home World Obama signs order for government spending cuts

Obama signs order for government spending cuts

100
0
SHARE

WASHINGTON, March 2- US President Barack Obama on Friday signed an order to start the US$85 billion across-the-board government spending cuts, wrapping up weeks of blaming game between the White House and Republicans, China’s Xinhua news agency reported.

Obama’s signature officially initiated the spending cuts starting Friday after US lawmakers failed to reach a replacement plan, the White House said on Friday night. At a press conference held earlier Friday, Obama said that the a cross-the-board government spending cuts were “dumb.” He placed blame squarely on Republicans over the failure to reach a plan to stop the spending cuts from beginning to take effect.

“It’s just dumb. And it’s going to hurt. It’s going to hurt individual people and it’s going to hurt the economy overall,” Obama said at a hastily arranged White House press conference after hosting a meeting with top US lawmakers including House Speaker John Boehner.

Roughly US$85 billion of spending cuts were set to hit various governmental departments this year starting on Friday, as agreed by Democrats and Republicans in January to resolve the so-called “fiscal cliff.”  However, Obama admitted the negative effects of the government spending cuts to US economy will be limited.

images (5)“The good news is the American people are strong and they’re resilient. They fought hard to recover from the worst economic crisis since the Great Depression, and we will get through this as well,” Obama told reporters.  The across-the-board automatic government spending cuts, or “sequester” in US government budget language, were included in the August 2011 debt-ceiling package to force

lawmakers to come up with a long-term deficit reduction plan.  The package also created a 12-member debt reduction super-committee of top lawmakers who were tasked to come up with a plan to replace the sequestration. The committee failed in November 2011, and a total of more than US$1 trillion  cuts over the next decade were set to begin in January, or about US$109 billion  per year.  A short-term “fiscal cliff” deal shifted about US$24 billion of the first two months of spending cuts into future government appropriations bills, but the last-minute plan still left US$85 billion in government outlays cuts to begin on March 1.

Democrats and Republicans have starkly different views on how to replace this year’s sequester. Democrats proposed to replace the sequester with evenly split new revenues and outlays cuts. GOP lawmakers proposed to transfer the authority over how to implement the US$85 billion cuts to the White House. Both proposals on Thursday failed to advance in US Senate.  Republicans will not accept new tax increases to replace the sequester and solve the government’s debt problem, something demanded by Democrats, Boehner
Friday told reporters after the White House meeting.

 BERNAMA

Comments