Open

Coming up

Don't miss

Replay


LATEST SHOWS

MEDIAWATCH

Netanyahu deletes tweet featuring photo of James Foley

Read more

THE WORLD THIS WEEK

The World This Week - 22 August 2014 (part 2)

Read more

THE WORLD THIS WEEK

The World This Week - 22 August 2014

Read more

FRANCE IN FOCUS

FRANCE IN FOCUS

Read more

FOCUS

Lifting the veil over China's air pollution

Read more

ENCORE!

Tango Takeover in Paris

Read more

WEB NEWS

Calls for ISIS media blackout after execution of James Foley

Read more

IN THE PAPERS

'Steely resolve of reporters exploited by pared-down employers'

Read more

BUSINESS DAILY

US judge calls Argentina bond swap offer illegal

Read more

  • Europe launches navigation satellites to rival GPS

    Read more

  • Besieged by problems, Hollande faces unhappy return from summer holidays

    Read more

  • Iraqi Sunnis quit govt talks after mosque massacre

    Read more

  • US demands Russia withdraw aid convoy from Ukraine

    Read more

  • Rights group sues US government over ‘deportation mill’

    Read more

  • Colombian army and FARC rebels begin work on ceasefire

    Read more

  • US National Guard starts to pull out of embattled Missouri town

    Read more

  • PSG fall flat once more against Evian

    Read more

  • Fed Chair says US job market still hampered by Great Recession

    Read more

  • August 22, 1914: The bloodiest day in French military history

    Read more

  • Central African Republic announces coalition cabinet

    Read more

  • Hamas publicly executes "informers"

    Read more

  • French firebrand leftist to quit party presidency, but not politics

    Read more

  • Fear of Ebola sky-high among Air France workers

    Read more

  • US says Islamic State threat 'beyond anything we've seen'

    Read more

  • Malaysia mourns as remains of MH17 victims arrive home

    Read more

  • Turkish Foreign Minister Davutoglu set to be Erdogan's new PM

    Read more

  • Interactive: Relive the Liberation of Paris in WWII

    Read more

Americas

Obama signs order for $85 billion in spending cuts

© AFP

Text by News Wires

Latest update : 2013-03-02

US President Barack Obama on Friday reluctantly signed a ‘sequester’ order that put into effect $85 billion in budget cuts, after he and Republicans failed to reach a deal to avoid an austerity drive that could damage the economy and slash jobs.

President Barack Obama reluctantly ordered an $85 billion austerity drive Friday that could slow the US economy and slash jobs, after blaming Republicans for refusing to stop the "dumb" spending cuts.

Obama complied with his legal obligations and initiated the automatic, across-the-board cuts in domestic and defense spending, following the failure of efforts to clinch a deal with Republicans on cutting the deficit.

'Anybody's guess as to how quickly this will impact the US economy'

The president signed an order bringing the arbitrary cuts into force, saying they should be made in "strict accordance" to US law, and a report by his Office of Management and Budget detailing the cuts to each agency.

Obama had earlier blamed the austerity time bomb on Republicans, who refused to close tax loopholes used by the rich and corporations combined with more targeted spending cuts, in what he calls a "balanced" approach to deficit reduction.

"I am not a dictator. I'm the president," Obama said, warning he could not force his Republican foes to "do the right thing," or make the Secret Service barricade Republicans leaders in a room until a deal is done.

"These cuts will hurt our economy, will cost us jobs and to set it right both sides need to be able to compromise," Obama said, before decrying the budget trimming as "dumb" and "unnecessary."

Only three months after winning re-election, and with the extent of his authority in Washington again constrained, Obama bemoaned his inability to do a "Jedi mind-meld" to get Republicans to change their minds, using imagery from Star Wars and Star Trek.

Obama was bound by law to initiate the automatic, indiscriminate cuts, which could wound the already fragile economy, cost a million jobs and harm military readiness, by the end of Friday.

The hit to military and domestic spending, known as the sequester, was never supposed to happen, but was rather a device seen as so punishing that rival lawmakers would be forced to find a better compromise to cut the deficit.

Both sides agree that the sequester is a blunt instrument to cut spending, as it does not distinguish between essential and wasteful programs -- in what Obama has branded a "meat-cleaver" approach.

New Defense Secretary Chuck Hagel warned that the sequester could endanger the military's capacity to conduct its missions.

"Let me make it clear that this uncertainty puts at risk our ability to effectively all of our missions," said Hagel. The Pentagon's budget is set to be slashed by roughly $46 billion.

The president appeared irritated but combative as he spoke to reporters after meeting with his chief foes -- House Speaker John Boehner and Senate Republican Minority Leader Mitch McConnell -- and allies Democratic Senate Majority Leader Harry Reid and top House Democrat Nancy Pelosi in the Oval Office.

Boehner emerged from the talks to signal to reporters that Republicans would not budge on Obama's key demand for a deal that would raise tax revenues.

"Let's make it clear that the president got his tax hikes on January 1. This discussion about revenue in my view is over," Boehner said.

"It is about taking on the spending problem in Washington."

Even Obama's defeated election rival Mitt Romney got in on the action, slamming the president in a rare interview, complaining he was "blaming and pointing" at Republicans and not leading the country.

The stalemate is likely to be prolonged, as the president's tactics are based on a strategy of pinning blame on Republicans for the pain of the sequester, which may take weeks to become evident.

The next point of leverage is likely a bill to fund government operations, which Congress must pass by March 27, or see the government shut down.

Both sides indicated that they would seek to avoid that scenario, meaning that the sequester cuts may remain in place -- unless a way can be found to make equal spending reductions that are less punitive.

Although the cuts trim significant amounts from domestic and defense spending, they do not touch entitlements -- social programs like Medicare health care for the elderly and pension schemes.

Many budget experts say that only cuts to those programs will be able to restore the prospect of long-term fiscal stability.

Under the sequester, 800,000 civilian employees of the Defense Department will go on a mandatory furlough one day a week and the navy will trim voyages. The deployment of a second aircraft carrier to the Gulf has been canceled.

Defense contractors may be forced to lay off workers and some federal health spending could be hit.

Cuts will also be made to special needs education and preschool for less well-off children. National parks could close and wait times could hit four hours at airport customs posts.

(AFP)

Date created : 2013-03-02

  • USA

    Budget cuts loom as Congress fails to cut a deal

    Read more

  • US POLITICS

    The risks and rewards of Obama's drone policy

    Read more

  • US POLITICS

    No love lost between Obama and political reporters

    Read more

COMMENT(S)