Obama warns of risks over budget cut uncertainty

WASHINGTON (AP) ? President Barack Obama on Monday said looming automatic spending cuts are already affecting the economy, while a top administration official warned that the nation's borders would be less secure if billions of dollars are yanked from the budget Friday.

"The uncertainty is already having an effect," Obama said. "Companies are preparing layoff notices. Families are preparing to cut back on expenses. The longer these cuts are in place, the bigger the impact will become."

Despite the urgent rhetoric, there was no indication the White House and congressional Republicans were actively negotiating a deal to avoid the so-called sequester ahead of the end of the week deadline. The last known conversation between Obama and GOP leaders was last week and there have been no in-person meetings between the parties this year.

With Congress back from a weeklong recess, House Speaker John Boehner showed little willingness to move off his long-held position that the sequester be offset through targeted spending cuts, not the package of cuts and tax increases Obama supports.

"Mr. President, you got your tax increase," Boehner said, referring to the tax rate increases that took effect on Jan. 1. "It's time to cut spending here in Washington."

The $85 billion budget-cutting mechanism could affect everything from commercial flights to classrooms to meat inspections. Domestic and defense spending alike would be trimmed, leading to furloughs for hundreds of thousands of government workers and contractors.

The White House continued laying out in stark terms what the cuts would mean for government services, dispatching Homeland Security Secretary Janet Napolitano to warn of the implications for critical security functions.

"I don't think we can maintain the same level of security at all places around the country with sequester as without sequester," said Napolitano, adding that the impact would be "'like a rolling ball. It will keep growing."

Napolitano focused in particular on the impact to the border, saying her agency would be forced to furlough 5,000 patrol agents. She tamped down the notion that budget cuts would make the nation more vulnerable to terrorism, but said the sequester would make it "awfully, awfully tough" to minimize that risk.

Also Monday, Interior Secretary Ken Salazar said visiting hours would be cut at all 398 national parks, just as they prepare for an influx of spring and summer visitors.

Elsewhere in the government, Defense Secretary Leon Panetta has said the cuts would harm the readiness of U.S. fighting forces. Transportation Secretary Ray LaHood said travelers could see delayed flights. Education Secretary Arne Duncan said 70,000 fewer children from low-income families would have access to Head Start programs. And furloughed meat inspectors could leave plants idled.

Obama will seek to build public support for his sequester offset plan Tuesday when he travels to Newport News, Va., a community that would be impacted by the defense cuts.

The sequester was designed as an unpalatable fallback, meant to take effect only if a congressional super-committee failed to come up with at least $1 trillion in savings from benefit programs.

Many of the nation's governors, who are gathered in Washington for their annual meeting, voiced frustration over the impending cuts, saying Washington's inability to strike a deal had created widespread uncertainty in the economy and hampered economic recovery in their states.

"The president needs to show leadership," said Louisiana Gov. Bobby Jindal, a Republican considered a potential 2016 presidential contender, following a meeting with Obama. "The reality is it can be done. This administration has an insatiable appetite for new revenue."

South Carolina Gov. Nikki Haley, a favorite of her party's conservative wing, pointed her anger at both Democrats and Republicans.

"No one should be playing golf. No one should be taking vacations," Haley said, taking a shot at Obama's recent golf outing and Congress' latest recess. "What they need to do is do what these governors do every day. We stay until we get it done."

Democratic Gov. Dannel Malloy of Connecticut concurred.

"They need to get out of that box that sits under the dome and understand that this has real implications in people's lives," he said. "Work with the president, find a way to get it done ? or if you want, just turn it over to us governors, and we'll negotiate."

The governors, emerging from a closed-door meeting with Obama Monday, said the president had assured them the administration is pursuing solutions, but offered no assurances that officials would find a way ahead out ahead of the deadline.

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Associated Press writers Ken Thomas, Steve Peoples and Josh Lederman contributed to this report.

Source: http://news.yahoo.com/obama-warns-risks-over-budget-cut-uncertainty-214308559--finance.html

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