Wednesday, February 20, 2013

THE RESET: Deal to delay spending cuts in doubt

President Barack Obama greets first responders after speaking in the South Court Auditorium of the Eisenhower Executive Office building on the White House complex in Washington, Tuesday, Feb. 19, 2013, to urge Congress to come up with an alternative plan to avert automatic spending cuts set to kick in on March 1, 2013. (AP Photo/Susan Walsh)

President Barack Obama greets first responders after speaking in the South Court Auditorium of the Eisenhower Executive Office building on the White House complex in Washington, Tuesday, Feb. 19, 2013, to urge Congress to come up with an alternative plan to avert automatic spending cuts set to kick in on March 1, 2013. (AP Photo/Susan Walsh)

President Barack Obama waves to members of the media as walks across the South Lawn of the White House following his arrival on Marine One helicopter, Monday, Feb. 18, 2013. President Obama was returning from a weekend of golfing in Palm City, Fla. (AP Photo/Pablo Martinez Monsivais)

FILE - In this file frame grab from video, Florida Sen. Marco Rubio takes a sip of water during his Republican response to President Barack Obama's State of the Union address, Tuesday, Feb. 12, 2013, in Washington. (AP Photo/Pool, File)

Chances seem to be dwindling for a deal in time to avert deep, automatic government spending cuts from beginning on March 1. The Republican-controlled House remains at loggerheads with the Democratic-led Senate and President Barack Obama over key issues.

With no top-level talks under way and Congress off until next Monday, each side is blaming the other.

The so-called sequester cuts "won't help the economy, won't create jobs, will visit hardship on a whole lot of people," Obama said Tuesday. "Congress didn't come together, do their jobs. And so as a consequence we've got these automatic, brutal spending cuts that are poised to happen next Friday."

Obama wants both more tax revenues and spending cuts.

Congressional Republicans oppose further tax hikes. "Just last month, the president got his higher taxes on the wealthy and he's already back for more," says Republican House Speaker John Boehner.

The scheduled cuts would trim roughly $85 billion from military and domestic spending in this budget year. Spending on Social Security, Medicare, Medicaid and other "entitlement" programs would be spared.

One reason there's little progress toward a deal is that there's yet another deadline ahead? March 27, when a temporary budget agreement expires and Congress must scramble to find funds to run the entire government.

During those negotiations next month, the most damaging automatic sequester cuts could be repealed or softened, the thinking goes. That effectively buys more time. And lawmakers seldom miss chances to put things off.

Meanwhile, deficit hawks Alan Simpson and Erskine Bowles are offering a new deficit-reduction plan they see as a possible compromise for Democrats and Republicans.

It combines rewriting the tax code ? to eliminate many deductions ? with deep spending cuts for some $2.4 trillion in deficit-reduction over 10 years.

Of the current impasse, "everybody's at fault," says Simpson, a Republican.

"Not only do we not have a long-range plan, we don't even have a budget," says Democrat Bowles. "We're operating this country on a month-to-month basis."

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Follow Tom Raum on Twitter: http://www.twitter.com/tomraum

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/89ae8247abe8493fae24405546e9a1aa/Article_2013-02-19-US-The-Reset/id-d94a8c6d86d941f2bf302663d72c0c74

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