Republicans insisted they would not heed the president’s proposal for a short-term delay to pending “sequestration” budget reductions if it includes new taxes yesterday, when defense executives warned White House officials the cuts would devastate their industry.
House Speaker John Boehner (R-Ohio) told reporters he would not accept President Barack Obama’s proposal to craft a plan to push off the start of sequestration–which is scheduled to start March 1 and tap $500 billion from Pentagon over a decade–unless it includes spending “cuts and reforms” he favors.
“At some point Washington has to deal with its spending problem,” Boehner told reporters. He joined other Republicans on Capitol Hill yesterday who voiced their aversion to any more tax increases in deficit negotiations, after they already allowed tax rates to raise for the wealthiest Americans as part of a New Year’s Day budget deal. House Budget Committee Chairman Paul Ryan (R-Wis.) has gone as far as to declare sequestration will kick in in March, as Democrats and Republicans remain at odds over how to find alternate government savings.
Obama had called on Tuesday for Congress to craft a short-term plan to prevent the start of sequestration that includes new revenues and spending cuts–as lawmakers work on a long-term solution–though he did not offer specifics (Defense Daily, Feb. 6).
Boehner argued yesterday that “Americans do not support sacrificing real spending cuts for more tax hikes.” The $1.2 trillion across-the-board sequestration cuts to defense and non-defense spending, he said, “should be replaced with spending cuts.”
Though sequestration is opposed by the White House and many lawmakers, lawmakers cannot agree on a plan to stop them, with Democrats resisting cuts to entitlements and the GOP balking at tax increases. Republican House and Senate armed services committee members, for example, held a press conference yesterday at the Capitol to tout a legislative solution–already rejected by Democrats last year–to stop the first year of sequestration cuts through freezing federal hiring. Senate Democrats, meanwhile, met for the second day of a closed-door retreat in Maryland where they reportedly talked about advancing a sequestration-delaying plan in the near future that includes new revenues.
As the political machinations continued, White House officials including Office of Management and Budget Acting Director Jeff Zients and senior presidential adviser Valerie Jarrett met with defense-industry leaders.
Meeting attendees “disputed heavily” the notion that allowing the sequestration cuts to take effect would have “limited effect or be reversible,” White House spokesman Jay Carney told reporters yesterday.
“For some of these major companies, the impacts would be long lasting, as they would have to make decisions about programmatic changes they would make and therefore contractual changes,” he said. He told the White House press corps that a company like Northrop Grumman [NOC] would have close to “20,000 small businesses in their pipeline that would be severely affected by implementation of the sequester.”
“I would also note that the participants did not support proposals thrown out there that we could somehow address only the defense spending side of the sequester, take care of that, but let the nondefense cuts kick in, across-the board cuts, or double up on the nondefense across-the-board cuts, because these companies depend for their workforces of their future on investments in education and in (science, technology, engineering, and math) STEM education in particular, and in other areas of investment that this government makes to help build the foundation for our future economy,” Carney said.
The White House meeting included Northrop Grumman President and CEO Wes Bush, Pratt & Whitney [UTX] President David Hess, BAE Systems President and CEO Linda Parker Hudson, Aurora Flight Sciences Chairman and CEO John Langford, Huntington Ingalls Industries [HII] President and CEO Mike Petters, ITT Exelis [XLS] President and CEO David Melcher, and Aerospace Industries Association President and CEO Marion Blakey, Carney said.
Defense Secretary Leon Panetta, meanwhile, continued to loudly decry the sequestration cuts in a Georgetown University speech, during what could be one of his final days in his job before his retirement.
He called on Congress to heed Obama’s calls for “a smaller package of savings and tax reform that could delay sequester.”
“My fear is that there is a dangerous and callous attitude that is developing among some Republicans and some Democrats, that these dangerous cuts can be allowed to take place in order to blame the other party for the consequences,” Panetta said.
“There isn’t anybody I’ve talked to on Capitol Hill that doesn’t think this is crazy,” he said.
As sequestration’s March 1 start date nears, Panetta said, “the Department of Defense is again facing what I believe and what the service chiefs believe and what the chairman of the Joint Chiefs of Staff believe is the most serious readiness crisis that this country is going to confront in over a decade.”