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Obama prods Congress for stopgap deal

Plan could ease budget cuts

– Eager to buy time and avoid economic pain, President Obama urged Congress on Tuesday to pass targeted short-term spending cuts and higher taxes as a way to put off sweeping, automatic cuts that would slice deeply into military and domestic programs starting March 1.

Obama’s appeal came as Congress’ budget office projected a yearly federal deficit of less than $1 trillion for the first time in his presidency and as Republicans applied political pressure on Obama to submit balanced budgets, pushing fiscal issues back to the forefront after weeks devoted to immigration and guns.

A short-term deficit-trimming measure would once again delay the broad and onerous spending cuts that are unpopular with both political parties, underscoring the government’s difficulty adopting long-term budget policies. Obama conceded the problem, even though he has previously scoffed at temporary budget reprieves.

“Let’s keep on chipping away at this problem together, as Democrats and Republicans, to give our workers and our businesses the support that they need to thrive in the weeks and months ahead,” Obama said in the White House briefing room.

The automatic cuts Obama is seeking to avoid are part of a 10-year, $1 trillion deficit reduction plan that was supposed to spur Congress and the administration to act on long-term fiscal policies to stabilize the nation’s debt. Though Congress and the White House have agreed on about $2.5 trillion in cuts and higher taxes since the beginning of 2011, they have been unable to close the deal on their ultimate goal of reducing deficits by about $4 trillion over a decade.

Obama did not specify a time span or a dollar amount for a stopgap measure, and neither he nor White House aides provided any detailed spending cuts or tax increases that could be used to postpone the deeper, automatic cuts. In order to put off cuts until the end of the fiscal year, Sept. 30, Congress would have to find $85 billion in deficit reduction.

The White House insists, however, that any short-term deficit-trimming package or any long-term debt stabilization plan must consist of both spending cuts and new tax revenue. Republicans have said they will oppose tax increases.

The automatic spending cuts, known as a “sequester” in budget language, were supposed to kick in Jan. 1, but Obama and Congress identified $24 billion in deficit reduction during a New Year’s agreement, thus averting the cuts until March 1.

Though that date is more than three weeks away, the White House showed some urgency in making its request Tuesday. Several GOP lawmakers had begun to signal that they might be willing to let the automatic cuts kick in as the only viable means of achieving deficit reduction, even though the reductions would cut into programs they support, such as military spending. Moreover, the White House feared the mere threat of the cuts was disruptive as government agencies began to prepare layoff notices.

In his remarks, Obama also said a debt proposal he made in December to House Speaker John Boehner was still on the table. That plan would increase revenue by about $600 billion over 10 years and reduce spending by about $800 billion, including savings of about $400 billion in health care programs such as Medicare. It would also change an inflation formula that would reduce cost-of-living adjustments for beneficiaries of government programs, including Social Security, and would also add spending, including $50 billion for public works projects.

Obama won about $600 billion in higher taxes at the start of the year, and congressional Republicans say they are not about to approve more tax revenue. While the Senate has a Democratic majority, the House is controlled by Republicans.

Sen. Dan Coats, R-Ind., and Rep. Marlin Stutzman, R-3rd, criticized Obama’s short-term fiscal plan to cut spending and eliminate certain tax breaks for the wealthy.

“The president needs a new game plan other than asking Americans to dig deep and hand over more tax dollars. Our nation’s problem is spending, not taxing,” Coats said Tuesday in a statement.

Rep. Marlin Stutzman, R-3rd, said in a statement that Obama “refuses to take our $16 trillion debt seriously” and “continues to kick the can down the road instead of offering serious solutions.”

Washington editor Brian Francisco contributed to this story.

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