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February 28. 2013 8:55PM
WASHINGTON - A day before sweeping budget cuts begin, the White House and Republicans blamed each other on Thursday for failure to prevent a fiscal crisis which the International Monetary Fund warned could slow the U.S. and world economies.
Absent a highly unlikely last-ditch deal, the $85 billion in cuts across federal government agencies start on Friday.
While Democrats and Republicans disagree about how severe the damage will be to public services like air traffic control and law enforcement, the IMF said the economic recovery would likely be harmed by the automatic spending cuts known as "sequestration."
"We will see what happens on Friday, but everybody is assuming that sequestration is going to take effect," IMF spokesman William Murray said. "What it means is that we are going to have to reevaluate our growth forecasts for the United States and other forecasts," he added.
The full brunt of the automatic cuts will be borne over seven months and Congress can stop them at any time if the two parties agree on how to do so.
That makes it difficult to say how the belt tightening will hit ordinary Americans. President Barack Obama's administration is warning that Navy ships could lie idle and children would lose out on vaccinations if the cuts are not halted.
The IMF likely would shave at least 0.5 percentage point off its 2013 U.S. economic growth forecast of 2 percent if sequestration is fully implemented.
Put into law in 2011 as part of a bipartisan solution to an earlier fiscal emergency, sequestration is unloved by both parties because of the economic pain it will cause.
Few believed two years ago that the cuts would come into force but, unable to agree on any other way to reduce the budget deficit, political leaders are pointing fingers at each other now that the spending reductions appear inevitable.
"It is the president's sequester. It was his team that insisted upon it," Republican House of Representatives Speaker John Boehner said.
White House spokesman Jay Carney said Republicans' refusal to compromise by agreeing to close tax loopholes on the wealthy was one reason why the cuts might be unavoidable.
"Compromise represents willingness to accept policies that aren't 100 percent of what you want. The president has done that again and again. Unfortunately, Republicans seem to be unwilling to do that when it comes to the sequester, so the sequester may take place," he told reporters.
Obama wants to end tax breaks for oil and gas companies and the lower "carried interest" tax rate enjoyed by hedge funds.
Carney said both sides had agreed to the spending cuts, half of which will come from the defense budget and half from non-defense domestic programs.
"It was designed as policy that would never come into effect. Because it was so onerous for both sides, it would compel Congress to reach a compromise," Carney said.
Blame game gets louder with budget cuts looking inevitable
Absent a highly unlikely last-ditch deal, the $85 billion in cuts across federal government agencies start on Friday.
While Democrats and Republicans disagree about how severe the damage will be to public services like air traffic control and law enforcement, the IMF said the economic recovery would likely be harmed by the automatic spending cuts known as "sequestration."
"We will see what happens on Friday, but everybody is assuming that sequestration is going to take effect," IMF spokesman William Murray said. "What it means is that we are going to have to reevaluate our growth forecasts for the United States and other forecasts," he added.
The full brunt of the automatic cuts will be borne over seven months and Congress can stop them at any time if the two parties agree on how to do so.
That makes it difficult to say how the belt tightening will hit ordinary Americans. President Barack Obama's administration is warning that Navy ships could lie idle and children would lose out on vaccinations if the cuts are not halted.
The IMF likely would shave at least 0.5 percentage point off its 2013 U.S. economic growth forecast of 2 percent if sequestration is fully implemented.
Put into law in 2011 as part of a bipartisan solution to an earlier fiscal emergency, sequestration is unloved by both parties because of the economic pain it will cause.
Few believed two years ago that the cuts would come into force but, unable to agree on any other way to reduce the budget deficit, political leaders are pointing fingers at each other now that the spending reductions appear inevitable.
"It is the president's sequester. It was his team that insisted upon it," Republican House of Representatives Speaker John Boehner said.
White House spokesman Jay Carney said Republicans' refusal to compromise by agreeing to close tax loopholes on the wealthy was one reason why the cuts might be unavoidable.
"Compromise represents willingness to accept policies that aren't 100 percent of what you want. The president has done that again and again. Unfortunately, Republicans seem to be unwilling to do that when it comes to the sequester, so the sequester may take place," he told reporters.
Obama wants to end tax breaks for oil and gas companies and the lower "carried interest" tax rate enjoyed by hedge funds.
Carney said both sides had agreed to the spending cuts, half of which will come from the defense budget and half from non-defense domestic programs.
"It was designed as policy that would never come into effect. Because it was so onerous for both sides, it would compel Congress to reach a compromise," Carney said.
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