Congress urged to take steps to avert looming budget cut

Reuters News
Posted: Aug 01, 2012 1:22 PM
Congress urged to take steps to avert looming budget cut

By David Alexander and Jim Wolf

WASHINGTON (Reuters) - Congress should stop fretting over the mechanics of implementing a huge, indiscriminate budget cut early next year and instead try to figure out how to avoid it by passing a more reasonable deal to reduce deficits, administration officials told lawmakers on Wednesday.

Jeff Zients, acting director of the White House budget office, told lawmakers the cuts due to kick in on January 2 would be devastating for both defense and non-defense programs, causing 16,000 teachers and aides to lose their jobs and eliminating early childhood education for 100,000 youngsters.

Deputy Defense Secretary Ashton Carter, who testified alongside Zients, said the reductions would force the Pentagon to cut back on the planes it is planning to buy and delay ship construction, moves that will ultimately cause costs to rise.

"We will be ready (to implement the cuts), but really that's not where the energy should be spent," Zients told members of the House of Representatives Armed Services Committee. "The energy should be spent on passing balanced deficit reduction to avoid what everybody agrees is bad policy."

"The right course is not to spend time moving rocks at the bottom of the cliff to make for a less painful landing. The right course is to avoid driving off the cliff altogether," he said.

Under the Budget Control Act signed last August, Congress cut spending by about $917 billion over the next decade, with $487 billion coming from national security.

The act also established a congressional panel to find $1.2 trillion in additional spending reductions by the end of the year. Under the law, if the committee failed to reach an accord, $1.2 trillion in across-the-board cuts would go into force in early 2013 under a mechanism known as sequestration.

The committee was unable to reach a deal and the cuts are due to go into effect January 2, including $500 billion in additional reductions to the defense budget.

Defense Secretary Leon Panetta and other Pentagon officials have warned that the cuts would be devastating to the military, undermining its ability to implement a newly designed strategy that shifts U.S. strategic focus to the Asia-Pacific region.

Lawmakers on the Republican-controlled House committee have expressed increasing concern about the looming cuts. The Pentagon has said it is not planning how to implement the reductions because it has not been directed to do so by the White House budget office.

Representative Randy Forbes, a Republican, faulted President Barack Obama, saying the Democrat had failed to put forward a solution to the deadlock that had a realistic chance of winning bipartisan support.

"Do you think it was responsible for the president to sign that measure (sequestration) into law" without having a viable alternative plan? he asked Zients.

"What is holding us up right now is the Republican refusal to have the top 2 percent (of wealthiest Americans) pay their fair share" of taxes, Zients shot back.

"No amount of planning will mitigate the damaging effects of sequestration. Sequestration is a blunt indiscriminate instrument designed to force action, to force Congress to act," he told the panel.

(Editing by Warren Strobel and Vicki Allen)