White House warns states of looming pain from March 1 budget cuts

WASHINGTON Mon Feb 25, 2013 8:05am IST

A general view of the North Lawn of the White House in Washington January 24, 2012. REUTERS/Jonathan Ernst/Files

A general view of the North Lawn of the White House in Washington January 24, 2012.

Credit: Reuters/Jonathan Ernst/Files

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WASHINGTON (Reuters) - With five days left before $85 billion is slashed from U.S. government budgets, the White House issued more dire warnings about the harm the cuts will do to Americans, breaking down the loss of jobs and services to each of the states.

The estimates show how many teachers could lose their jobs in each state, how many toddlers could be kicked out of subsidized preschool programs, and how many children could lose funding for vaccines for measles and mumps.

But Republicans, who advocate budget cuts, said the warning was overplayed, and called on President Barack Obama to apply what is known as the "sequester" in a more careful way, rather than slashing budgets across the board.

"They've rolled out this great political theater about how cutting less than 3 percent of the federal budget is going to cause all these awful consequences," Louisiana Governor Bobby Jindal, a Republican, said on NBC's "Meet the Press."

"Here's his chance to say, 'Here's how we can do it better,'" Jindal said, suggesting Congress and the White House give departments the ability to cut spending on less essential services.

Lawmakers return to Washington on Monday after a week-long recess and unless they reach what appears to be an unlikely last-minute deal with the White House to postpone what is known as the sequester, the across-the-board cuts will take effect March 1.

Obama has urged Congress to buy more time for a broad budget deal with a short-term measure that boosts revenues by ending some tax breaks for the wealthy.

Senate Democrats have put forward a plan that focuses on those tax loopholes, and this week Republicans are expected to propose alternatives. But there has been almost no negotiation between the White House and Congress on the issue.

"Surely he can put forward a plan to cut 2 to 3 percent from a $3.5 trillion budget," Senate Republican leader Mitch McConnell said in a statement on Sunday.

Obama spoke with governors at a black-tie White House dinner on Sunday, where New Jersey Governor Chris Christie, a Republican who praised Obama after Superstorm Sandy devastated his state's coast, was seated beside first lady Michelle Obama.

But the president kept his brief remarks apolitical, and did not mention the impending sequester.

"We know we've got more work to do, more jobs to create, more children to educate, more roads to repair. The task before us is to find smart, common sense solutions to each of these challenges that we can move forward on," Obama said.

WASHINGTON, D.C., SOUTH TO BE HARDEST HIT

Governors, in Washington this week for an annual meeting, are concerned about the effect of the cuts on jobs and the economy at the state level. Obama is slated to speak again to governors on Monday.

On average, government programs subject to the cuts provide 6.6 percent of states' revenues, according to Pew Center on the States. States closest to the nation's capital and in the South will be hardest hit, an analysis by Wells Fargo Securities Economics Group last week found.

On Sunday, the White House issued two pages of sequester cuts for each state, and said more details will be released through the week.

For example, up to 2,300 low-income children could be dropped from subsidized child care in New York state, and 7,170 fewer children would receive vaccines, the White House said.

In Virginia, about 90,000 civilians who work for the Defense Department would face temporary layoffs known as "furloughs," and several major Navy projects would be canceled or delayed.

White House officials have said the sequester law does not allow the administration to be flexible in applying the cuts.

"We don't have any ability with dumb cuts like this to figure out what the right thing to do is," Education Secretary Arne Duncan said on "Face the Nation."

BLAME GAME

Obama will travel to Newport News, Virginia, on Tuesday to a shipbuilding plant owned by Huntington Ingalls Industries (HII.N) to highlight the impact on defense jobs.

The trip is the latest in a series of events staged by the White House to try to pin the blame for the looming cuts on congressional Republicans.

"Are all these things going to go into effect on the first day? No. But there are hundreds of thousands of Americans who are working today who will lose their jobs as a consequence of this Republican decision," Dan Pfeiffer, White House communications director, told reporters on Sunday.

A spokesman for House of Representatives Speaker John Boehner, the top Republican in Congress, mocked the scare tactics.

"The White House needs to spend less time explaining to the press how bad the sequester will be and more time actually working to stop it," Michael Steel, Boehner's spokesman, said.

Republicans have argued the sequester mechanism - part of a 2011 law designed to force Congress to reach a deficit reduction deal - was Obama's idea.

On Sunday, the Washington Post's Bob Woodward waded into that fight, saying White House officials including Jack Lew - Obama's nominee for Treasury Secretary - proposed the sequester.

In an opinion piece, Woodward, who wrote a book about the deal called "The Price of Politics," said Obama was "moving the goal posts" by insisting on new tax revenue as part of an alternative to the sequester cuts.

Pfeiffer called the debate over who started the sequester "a fairly stupid one" and said Republicans had, until recently, been open to the idea of ending tax loopholes.

"It should be an easy thing for Republicans to do but they are so focused on not giving the President another win," he told reporters. (Additional reporting by Aruna Viswanatha, Tabassum Zakaria, Lisa Lambert and Samson Reiny; Editing by David Brunnstrom, Eric Walsh and Vicki Allen)

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