Obama Signs Sweeping US Budget Cuts Into Effect
Washington – US President Barack Obama has signed into effect a wave of steep spending cuts which he has warned could damage the US economy.The cuts – known as the sequester and drawn up two years ago – will take $85bn (£56bn) from the US federal budget this year.Last-ditch talks at the White House to avert the reductions before Friday’s deadline broke up without agreement.
The IMF has warned the cuts could slow global economic growth.The BBC’s Mark Mardell in Washington says the cuts were designed to be so brutally painful that politicians would be forced to agree on a better way of balancing the books.However, as the midnight deadline loomed on Friday, Mr Obama and Republican congressional leaders still failed to agree on a way to avoid them.
The two sides are at odds over the president’s insistence on raising taxes as part of any plan for tackling the country’s $16.6 trillion (£11tn) debt.After the White House talks broke up, Mr Obama blamed Republicans for the impasse.”They’ve allowed these cuts to happen because they refuse to budge on closing a single wasteful loophole to help reduce the deficit,” he said.
He warned the cuts – if fully realised – would slow US economic growth by half of 1% and cost 750,000 jobs.”We shouldn’t be making a series of dumb, arbitrary cuts to things that businesses depend on and workers depend on,” he said. (BBC)