President Barack Obama has urged US Congress to take immediate action to avoid the upcoming spending cuts, known as a ‘sequester’, which he has called ‘arbitrary’ and ‘dumb’.
The cuts are expected to be far-reaching, but are likely to hit the defence industry especially hard, with the US Navy already warning that it may have to cancel future contracts if the cuts go ahead.
The cuts were outlined in 2011 and negotiated by both Democrats and Republicans, which set an across-the-board reduction in most programs if Congress failed to find other ways to trim the deficit by $1.2 trillion over the coming decade. The hope at the time was that Congress would therefore be forced into a new agreement to reduce to deficit, but talks hit gridlock and no new plans were ever put in place.
President Obama said that the breakdown in discussions was down to Republican stubbornness, adding: “There are too many Republicans in Congress right now who refuse to compromise even an inch when it comes to closing tax loopholes and special interest tax breaks.”
On the other hand, Republicans have said that the President is overestimating the negative impact sequestration will have, accusing Obama of using scare tactics to inflate the effects of defence cuts in an effort to gain support for his own economic plan.
The Pentagon faces a budget reduction of more than $40 billion with additional cuts to come in future years as long as the sequester remains in effect. Some budgets could be cut by as much as 15%, although certain exceptions do apply as in the case of military pay and Afghanistan operations.
Much of the criticism of the sequester is focused not on the scale, but on the ‘across the board’ nature of the cuts, which does not allow for any negotiation to save high-priority operations at the expense of low-priority spend.
The cuts are not limited to the US defence budget. Administration officials recently announced that immigration authorities were releasing several hundred non-violent illegal immigrants from holding facilities around the US, and Homeland Security Secretary Janet Napolitano warned that her department would have to reduce spend on border and airport security as a result of the cuts.
