Uncertainty was the only sure bet for the US economy Thursday as divided lawmakers were set to vote on — and likely reject — competing bills to avert the doomsday spending cuts they had wanted to avoid.
President Barack Obama will make a final plea to bickering congressional leaders at a White House meeting on Friday, the last day before severe, across-the-board cuts known as the sequester begin to kick in.
But many lawmakers from both sides have already resigned themselves to the realization that a deadline-beating budget deal to head off the damaging package of indiscriminate cuts totaling $85 billion this year is just not happening, and that a solution could arise from March negotiations over funding government operations for fiscal year 2013.
And some Republicans have begun to tone down the histrionics over the effects of the sequester, saying the cuts should be manageable — even as the International Monetary Fund warned Thursday that the sequester will slow growth in the United States and the world economy.
“There will be an impact on global growth,” IMF spokesman Bill Murray said. “We’re going to have to reevaluate our growth forecast in the United States and also our other forecasts.”
But John Cornyn, the number two Republican in the Senate, said Thursday that President Barack Obama and his Democrats have been overstating their “apocalyptic predictions” of hundreds of thousands of job losses, a slash in economic growth, and harsh cuts to social services and national security.
“I would suggest… put down the Beltway Kool-Aid, because they are predicting a disaster that will not occur.”
Some Republicans in the House agreed. “It is going to happen. It is 2.4 percent of the budget, and it is not the end of the world,” Republican Representative Jim Jordan said in US News & World Report.
“We want the savings. We want to bank those savings, and we want to move on.”
Democrats have put forward what they are touting as a “balanced plan” that raises new tax revenue to help replace the $85 billion in cuts.
It also cuts several billion dollars in what Democratic Senate majority leader Harry Reid called “wasteful subsidies to farmers,” longstanding and controversial payments that some lawmakers first sought to scrap in the 1980s.
Republicans laid out a competing version that maintains the full financial effect of sequester, without raising new revenue, but gives the president broader “flexibility” to map out where the cuts would hit.
Reid complained that such a plan would force Obama into deciding which programs stay and which get the axe.
But Republican Senate minority leader Mitch McConnell said that is precisely the leadership Obama needs to show in a time of crisis.
“It’s your job to make the tough decisions,” McConnell said of Obama.
Democrats are trying to force Republicans into accepting more revenues through closing what Reid calls “wasteful tax loopholes” that favor millionaires.
But conservatives appeared to be standing firm, saying Obama got his $600 billion in tax revenues for the coming decade in the last fiscal negotiations in late December.
“He got his pound of flesh,” Cornyn said. “We need to reduce spending.”
Neither plan is likely to receive the necessary votes to move the legislation forward.
Republicans in the House, meanwhile, appeared to be coalescing around a plan that would see the sequester absorbed into negotiations on legislation that funds the government.
House Appropriations committee chairman Harold Rogers said there was broad support for the plan, which would pare down the $1.043 trillion discretionary spending budget for 2013 down to $974 billion, the difference being the amount of sequester cuts set to affect such spending.
“I have never seen a matter of this magnitude that had no one speak against it,” Rogers was quoted by Roll Call newspaper as saying after explaining the details to a closed-door Republican conference meeting.
Obama hosts Reid, McConnell, House Speaker John Boehner and House Democratic leader Nancy Pelosi at the White House on Friday to discuss options for averting the sequester, or at least minimizing its impact.
As Washington zeroed in on the sequester deadline, Senate Chaplain Barry Black opened the Senate session Thursday with remarks about the looming cuts and offered a poignant plea: “Rise up, o God, and save us from ourselves.”
Amid US budget battle, another missed deadline
