President Barack Obama’s administration released a state-by-state report on how $85 billion in automatic spending reductions will degrade programs from education to public health, as White House officials blamed Republicans for the stalemate on averting the cuts set to begin Friday.
“Our hope is that we’ll be able to come to a solution,” Dan Pfeiffer, a senior Obama adviser, said in a conference call with reporters Sunday. “But there seems to be nothing the Republicans are saying right now on Sunday to suggest that by Friday they’re going to change their position.”
House Speaker John Boehner’s spokesman, Michael Steel, slapped the blame back. “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,” the Republican said.
The threat of the federal spending cutbacks, which would total $1.2 trillion over nine years, hasn’t fazed financial markets so far. The Standard & Poor’s 500 Index has gained 6.3 percent this year as U.S. lawmakers agreed on a compromise on taxes in January and amid better-than-estimated corporate earnings.
Still, if the impasse drags on, the Congressional Budget Office has warned reduced federal spending may lower the gross domestic product by 0.6 percent and cost 750,000 jobs by the end of 2013.
To emphasize the risks of the cuts, the White House today released state-by-state data on how programs from education to public health would be reduced this year. The details were put out as the nation’s governors are meeting in Washington and Obama tries to enlist their support to put pressure on Congress to reach a deal.
“This will have serious programmatic consequences for all 50 states and the District of Columbia,” Jason Furman, the principal deputy director on the president’s National Economic Council, said on the conference call.
Ohio, for example, will lose approximately $25.1 million in funding for primary and secondary education, which may jeopardize about 350 teacher and aide jobs, according to the White House. In New Jersey, the White House estimates that 1,300 children would be eliminated from Head Start and Early Head Start services.
Cuts would be especially visible in states where federal spending is higher, including Maryland and Virginia, which have numerous federal facilities. In a Feb. 18 letter to Obama, Virginia Governor Robert McDonnell, a Republican, said the reductions could force his state into a recession.
Sunday’s warnings from administration officials follow last week’s notice from the Pentagon that it would require as many as 800,000 civilian employees to take unpaid time off to reduce spending.
The impact would be felt across the country and not just by federal workers or contractors. The Federal Aviation Administration will furlough staff at air-traffic control facilities beginning April 1, and flights may be delayed as long as 90 minutes at major airports, Transportation Secretary Ray LaHood said at a Friday White House briefing. More than 230 towers at smaller and mid-size airports may be closed, according to a list posted on the FAA website.
The potential cuts come when the global economy is slowing and the recovery in the U.S. has stalled. The U.S. economy unexpectedly shrank in the fourth quarter, logging the worst performance since the second quarter of 2009, the last time the world’s largest economy was still in the recession, Commerce Department figures showed on Jan. 30.
The automatic spending cuts “will have macroeconomic consequences, costs hundreds of thousands of jobs across the country and jobs throughout the private sector,” Furman said.
Pfeiffer sought to pin responsibility for any job losses on the Republicans, who have a majority in the House of Representatives.
“Are all of these things going to go into effect on the first day? No,” he said. “But there are hundreds of thousands of Americans who are working today who will lose their jobs as a consequence of this Republican decision.”
Senator John McCain, a Republican of Arizona, called on Obama to initiate talks with lawmakers.
“I won’t put all the blame on the president,” McCain said on CNN television’s “State of the Union” broadcast Sunday. “But the president leads. The president should be calling us over somewhere, Camp David, the White House, somewhere, and us sitting down and trying to avert these cuts.”
Republicans have faulted the president and the Democratic- controlled Senate for not acting on an alternative to replace the cuts, while continuing to needle the White House for originally suggesting the concept of sequestration in a deal the raise the debt ceiling in 2011.
“Considering the House has twice passed legislation to avoid the sequester, you would think White House would be focused on getting the Senate to pass a plan that would do the same instead of creating more PR stunts,” Republican National Committee spokesman Sean Spicer, said in an e-mailed statement
Over the weekend, both Republican and Democratic governors, who are meeting in Washington, said that while the federal government must reduce its budget deficit, the across-the-board spending cuts would deal an unnecessary blow to still-recovering state economies.
Mississippi Governor Phil Bryant, a Republican, said he was most concerned about how the defense cuts could affect his state, from the aerospace industry to shipyards. About 9,000 civilians who work for the Defense Department in Mississippi may be furloughed, ship purchases may be delayed, and a planned demolition at Mississippi’s Naval Air Station Meridian could be scrapped, according to the White House.
“These are real jobs and real families,” Bryant said in an interview. “The president needs to stop holding campaign rallies and get this thing done.”
Vermont Governor Pete Shumlin, chairman of the Democratic Governors Association, said in his state it will force furloughs in the National Guard, create delays at the Canadian border crossings, and cut into food and home heating assistance for the poor.
“We’re finally seeing some prosperity, we’re finally seeing some job growth, people are feeling better about the future -- and this just absolutely kicks you in the knees,” he said in an interview. “If this thing isn’t resolved, the states can’t make up the difference.”
© Copyright 2013 Bloomberg News. All rights reserved.