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As Deficit Panel Fails, Obama Vows to Keep Mandatory Cuts

As Deficit Panel Fails, Obama Vows to Keep Mandatory Cuts

By Alexis Simendinger - November 22, 2011

President Obama said Monday he will veto any attempt by Congress to undo the across-the-board spending cuts mandated for 2013 that were triggered when lawmakers' failed to agree on a more surgical plan to trim deficits over the next decade.

"My message to them is simple: No. I will veto any effort to get rid of those automatic spending cuts to domestic and defense spending. There will be no easy off-ramps on this one," Obama said from the White House briefing room.

Obama said Congress must confront the unpleasantness of the budget cuts it resists in order to find a preferable way forward. "They’ve still got a year to figure it out," he said.

The president read his statement but took no questions shortly after a 12-member congressional panel that had been appointed last summer issued a joint statement acknowledging that it had failed to agree on deficit-cutting changes required by a Nov. 23 deadline.

The law that created the Joint Select Committee on Deficit Reduction provided that $1.2 trillion in spending cuts borne by defense and domestic programs would be the punishment in 2013 should Congress fail to craft an alternative plan to reduce deficits by at least $1.2 trillion.

Congress and the president previously enacted roughly $1 trillion in projected deficit reduction at the end of a hard-fought debt ceiling drama that pushed the United States to the brink of debt default. During that battle, Obama and House Speaker John Boehner, R-Ohio, together aimed for a bigger deal but could not find a mix of changes to entitlement programs and tax increases that could win enough votes in a sharply divided Congress. Those same partisan divisions subsequently paralyzed the super committee.

In truth, current law has accomplished a “grand bargain” in deficit reduction over the next decade, even if Obama and Congress fail to agree on anything deficit-related before 2013. That’s because both parties enacted last summer’s $1 trillion in savings; the defense and domestic program cuts of $1.2 trillion would take place by default beginning in 2013; and current law says the Bush-era tax cuts for upper-income and middle-class Americans will expire, also at the beginning of 2013. The end of those tax breaks will pour new revenues into the Treasury totaling nearly $5 trillion through 2021, according to the Congressional Budget Office estimates.

In that scenario, Washington’s default governance could deliver more than $7 trillion in deficit reduction in the next decade if Congress and the president do nothing but campaign next year.

But Obama is now betting that Republicans will return to the bargaining table at some point because they oppose the deep defense cuts mandated by the across-the-board penalty that kicks in, and because the GOP wants to make permanent the Bush tax cuts and achieve “tax reform.” On the Democratic side, liberals want to keep the Bush tax cuts that benefit the middle class and they want to stave off deep domestic spending reductions for programs they favor, including Medicare.

The resulting rhetoric Monday was nothing but raw politics from all sides, foreshadowing a 2012 election season in which legislative accords will be rare and partisan mudslinging will be a constant at a time when three-quarters of Americans say the country is on the wrong track and unemployment is projected to remain near 9 percent through Election Day.

Obama taunted Congress to “do its job,” and he wasted no time in blaming Republicans for what he called unreasonable, short-sighted intransigence rooted in the GOP’s refusal to ask wealthy Americans to pay more in taxes to share in the country’s determination to bring down deficits and debt over the long term.

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Alexis Simendinger covers the White House for RealClearPolitics. She can be reached at asimendinger@realclearpolitics.com. Follow her on Twitter @ASimendinger.

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