WASHINGTON (AP) — President Barack Obama on Tuesday was to urge congressional Republicans to accept more tax revenue in order to avert looming, across-the-board budget cuts due to take effect in less than two weeks.
The $85 billion in cuts, a severe attempt at addressing the country’s massive deficit, will start taking effect on March 1 unless Congress acts. The White House says the cuts could derail an economy still suffering from high unemployment and sluggish growth.
The cuts are just one of a handful of fiscal deadlines facing a sharply divided Congress, which is on break this week. In recent days, military leaders and heads of the State Department and other departments have appeared before Congress with warnings of what the cuts would do to their work.
The cuts were as first set to begin taking effect on Jan. 1, but the White House and lawmakers agreed to push it off for two months in order to create space to work on a larger budget deal.
With little progress in recent weeks, Obama is calling for the cuts to be put off again, though it’s unclear whether another delay would have any impact on the prospects for a broader budget agreement.
Obama wants to offset the cuts through a combination of targeted spending cuts and increased tax revenue. The White House is backing a proposal unveiled last week by Senate Democrats that is in line with the president’s principles.
But that plan was met with an icy reception by Republicans, who oppose raising more tax revenue in order to offset the cuts. Republican leaders say the president got the tax increases he wanted at the beginning of the year when Congress agreed to raise taxes on family income above $450,000 a year.
The Democrats propose to generate revenue by plugging some tax loopholes. Those include tax breaks for the oil and natural gas industry and businesses that have sent jobs overseas, and by taxing millionaires at a rate of at least 30 percent.
Some Republicans, including House Budget Committee Chairman Paul Ryan, the Republican candidate for vice president last year, have advocated plugging loopholes, but as part of a discussion on a tax overhaul, not the looming cuts.
“Loopholes are necessary for tax reform,” Ryan said Sunday on ABC. “If you take them for spending, you’re blocking tax reform and you’re really not getting the deficit under control.”
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Associated Press writer Julie Pace contributed.
Copyright 2013 The Associated Press.