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Boehner Working to Avoid a Government Shutdown

February 26, 2013
 
 

Feb. 26 (Bloomberg) -- House Speaker John Boehner said the U.S. House won’t act to replace automatic federal spending cuts until the Senate "gets off their ass" and passes a plan.

Boehner also accused President Barack Obama of using the military as a "prop" to campaign for a tax increase in the debate over across-the-board spending reductions that will take effect starting March 1.

"If the Senate acts, I’m sure the House will act quickly," Boehner told reporters in Washington today. Boehner said Obama isn’t "focused" on finding a solution to averting the reductions.

The cuts will reduce spending by $85 billion in the final seven months of this fiscal year and by $1.2 trillion over the next nine years. Half of the reductions will affect defense spending, while the rest will be spread over other federal agencies. Obama and Democrats want to replace part of the cuts with higher tax revenue, while Republicans oppose more taxes.

The House passed its proposal to avert the spending cuts last year, and the measure expired when the last session of Congress ended in early January.

"We have moved a bill in the House twice; we should not have to move a third bill before the Senate gets off their ass and begins to do something," Boehner said.

‘Wasn’t Real’

House Democratic Whip Steny Hoyer said the House’s action last year "wasn’t real" because Republicans realized the legislation wouldn’t pass the Democratic-controlled Senate.

This year, House Republicans "have failed to have a single piece of legislation put on the floor" to replace the spending cuts, said Hoyer of Maryland.

Michigan Representative Sander Levin, the top Democrat on the House Ways and Means Committee, said his party is sticking to its demand for more tax revenue as part of a deal to replace the spending reductions.

"The president isn’t going to give way," Levin told reporters and editors at a Bloomberg Government event today. "It’s unsustainable to do it simply through cuts in programs."

Levin predicted that economic fallout from the cuts, including a potential stock market reaction, will ultimately force a deal to replace them.

"It will have an economic impact sooner rather than later," he said.

‘Holding Rallies’

Boehner said the president is more interested in "holding rallies" than negotiating to find a way to avert the spending reductions. Obama is traveling to a shipyard in Newport News, Virginia, today to talk about the effects of the automatic spending cuts.

"It’s time for the Senate to act," the speaker said. "It’s not about the House."

Senate Minority Leader Mitch McConnell said the president has been warning of "utter chaos" if the spending cuts take effect.

"What does it say about the size of government that we can’t cut it by 2 or 3 percent without inviting disaster?" McConnell, a Kentucky Republican, said on the Senate floor. "Personally I don’t think the world will end."

The Senate plans to vote as soon as tomorrow on a a pair of proposals to replace the spending cuts, neither of which is expected to advance.

Farm Aid

The Senate’s majority Democrats propose replacing this year’s portion of the reductions with a smaller defense spending cut, a halt in direct payments to farmers, and a tax increase that would impose a minimum 30 percent rate on top earners. Republicans probably will offer an alternative that would give federal agencies more flexibility to cut the required amount of spending.

 

Boehner said he’s working to avoid the "threat of a government shutdown" at the end of March when a measure funding government operations will expire. He said he has been working with House and Senate lawmakers on "how best" to craft a stopgap measure that would fund the government through the rest of the fiscal year, which ends Sept. 30.

Senator Max Baucus, a Montana Democrat, said both parties need to work together to avoid lurching from fiscal showdown to fiscal showdown.

"It’s a truism, but like a lot of truisms it’s true," said Baucus, chairman of the Senate Finance Committee.

Fiscal Gap

Some House Republicans said the fiscal gap is not too wide to negotiate more targeted spending cuts to avoid the across- the-board reductions.\

Obama "can sit down with us and negotiate a redistribution of the cuts," Representative Tom Cole, an Oklahoma Republican, said in an interview. "But the cuts are going to occur" in one form or another, he said.

"There is a range of options where we would negotiate with the president where he would get some of the things he wants, but he is not going to get revenue, it is just not going to happen," Cole said.

Colorado Republican Cory Gardner said a deal is possible, "if not this week then Monday or Tuesday of next week."

"The bottom line is cut spending, OK, is there a better way to do it?" Gardner said in an interview. "As a former legislator in Colorado said, ‘it’s not rocket surgery.’"

Hoyer said restructuring the $85 billion in spending cuts without raising more tax revenue wouldn’t avert the economic damage that the reductions would create.

"Slash it or you target it, it’s going to have the same impact of cutting that much money in a very short period of time," Hoyer told reporters. "Most economists believe that cuts of this magnitude" will "undermine job creation and slow growth," he said.

 

--With assistance from Heidi Przybyla, Richard Rubin and Kathleen Hunter in Washington. Editors: Laurie Asseo, Jodi Schneider

 

To contact the reporters on this story: Roxana Tiron in Washington at rtiron@bloomberg.net; James Rowley in Washington at jarowley@bloomberg.net


 

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