Obama: We’ll manage cuts as best we can

Reuters

United States President Barack Obama says he and his team will do everything possible to minimise the impact of the spending cuts.

Washington - President Barack Obama on Monday presided over the first meeting of his new-look Cabinet in a sobering climate of forced fiscal belt-tightening, urging humane management of spending cuts for communities and families that are “going to be hurting”.

Obama said he is continuing to seek out Republican partners to reach a deal to end the spending cuts, but there was no sign that a breakthrough was in the works to reverse the $85-billion in budget reductions that went into effect on Friday.

“We are going to manage it the best we can to minimise the impact on American families,” the president told reporters allowed in for the beginning of the meeting. “It's not the right way to go about deficit reduction.”

Obama sat next to his newly confirmed Defence Secretary Chuck Hagel, with new Treasury Secretary Jack Lew across the long oval table, next to Vice-President Joe Biden. Obama said his team also planned to discuss other priorities for his second term, including immigration reform, gun control and the expansion of funding for preschool programmes.

Obama's spokesperson was more pointed in his comments on the spending cuts, known in Washington as the sequester, in a briefing preceding the Cabinet meeting. White House press secretary Jay Carney said it's remarkable some Republicans are calling the deep government-wide cuts a win for the conservative tea party, or for Republicans who stood up to the president.

Carney said the cuts go against conventional Republican goals of increasing defence spending and border security. He also said the cuts do nothing to address Republican priorities for long-term deficit reduction or tax reform.

“Obama hopes that having achieved this empty victory, at least as they see it, the Republicans will understand that their goals are being unmet here,” Carney told reporters. “So not only are Americans suffering from this, regular folks, but their objectives are being unmet and there's an opportunity to change that dynamic.”

The Senate's Republican leader, Mitch McConnell, on Sunday called those cuts modest, and the House leader, Speaker John Boehner, said he was not certain that they will hurt the economy.

“This modest reduction of 2.4 percent in spending over the next six months is a little more than the average American experienced just two months ago, when their own pay went down when the payroll tax holiday expired,” McConnell said on CNN television's State Of The Union.

“I don't know whether it's going to hurt the economy or not,” Boehner said on NBC's Meet the Press. “I don't think anyone quite understands how the sequester is really going to work.”

White House economic adviser Gene Sperling said the pain will be felt eventually. “On Day One, it will not be as harmful as it will be over time,” he said.

Both parties are casting blame on the other for the automatic, across-the-board spending cuts but gave little guidance on what to expect in the coming weeks. Republicans and Democrats pledged to retroactively undo the cuts, but signalled no hints as to how that process would start to take shape. Republicans insisted there would be no new taxes and Democrats refused to talk about any bargain without them.

All of this comes ahead of a new, March 27 deadline to deal with the question of funding the government and a debt-ceiling clash coming in May. - Sapa-AP