U.S. budget cuts start ‘slow grind’
WASHINGTON — After weeks of increasingly dire warnings, the White House scrambled to adjust to the political and economic reality of deep and indiscriminate spending cuts that kicked in Friday and would, over time, hinder the economic recovery.
In a sign that the warnings may have gone too far, President Obama sought to dial back some of the rhetoric. Most Americans, he said, won’t immediately feel the effects of the complex process known as sequestration, which is expected to unfold like a slow-motion budgetary car crash.
“The longer these cuts remain in place, the greater the damage to our economy — a slow grind that will intensify with each passing day,” Obama said after meeting congressional leaders for less than an hour in the Oval Office. “This is not going to be an apocalypse.... It’s just dumb. And it’s going to hurt.”
The pain of $85 billion in across-the-board cuts will kick in next month when agencies are forced to order air traffic controllers, food inspectors, prosecutors, janitors and other federal workers to take one or two days of unpaid leave for every two-week pay period. Most federal agencies are required to give workers at least 30 days’ notice of any furloughs.
The slow ramp-up gives Obama and congressional Republicans time to strike a deal before the next crisis hits — a potential government shutdown. The legislation authorizing money to run the government expires March 27.
The GOP-led House plans to pass a budget bill next week, giving the Democratic-controlled Senate a chance to act in time to keep the government running.
“I’m hopeful that we won’t have to deal with the threat of a government shutdown while we’re dealing with the sequester at the same time,” House Speaker John A. Boehner (R-Ohio) told reporters after the White House meeting.
The Justice Department and National Labor Relations Board issued furlough notices ahead of Friday’s midnight deadline. The vast majority of furloughs at other agencies are not expected to begin until April.
The acting head of the Internal Revenue Service, Steven T. Miller, informed employees that they would not be furloughed until after tax-filing season ends this summer. They then would need to take five to seven days of unpaid leave before Sept. 30.
The Pentagon said it would furlough most of its 800,000 civilian employees one day a week — amounting to a 20% pay cut — with notifications coming this month.
Except for military pay and a few other accounts, all the Pentagon’s 2,500 budget accounts will be cut by up to 15% for the rest of the fiscal year, as the Defense Department is required to cut spending by $42.7 billion in 2013.
“As the year goes on, it will be unmistakable,” Ashton Carter, the deputy secretary of Defense, said of the effect. “It’s not subtle.”
Defense Secretary Chuck Hagel said the Air Force would start reducing flying hours immediately, the Army would curtail training and the Navy would “gradually stand down” four of its air wings. A Navy air wing typically has seven or eight squadrons of aircraft.
When asked for specific actions the Pentagon would take this weekend, Carter did not name any. Over the next two weeks, he said, Army units scheduled to go to the National Training Center, a vast installation in the California desert, would see those plans canceled.
Other reductions also are coming.
Cuts in Medicare reimbursements to doctors, hospitals and other medical providers would take effect in April, as claims administrators must update their systems to implement an across-the-board 2% reduction in reimbursement payments.
Most cuts in federal funding for education would not take place until the fall as grants for the current school year have already gone out.
The nonpartisan Congressional Budget Office estimated that $44 billion of the $85 billion in cuts would be imposed by the end of September, the first part of nearly $1.2 trillion in spending reductions over the next decade.
The greatest hit will be to the defense budget, which would see spending for 2013 cut 7.9%. Non-defense spending would be reduced 4.6%.
Some major budget items are exempt, including Social Security benefits, veterans programs, Medicaid and many types of assistance for low-income Americans.
The threat of the impending cuts already has had some effect.
Immigration and Customs Enforcement officials said this week that they had released “several hundred” low-risk immigrants from deportation centers nationwide in anticipation of spending reductions, though news reports Friday indicated the release may have been much larger.
The Federal Aviation Administration has alerted more than 100 airports with fewer than 150,000 landings and takeoffs a year, such as Santa Monica Airport, that their air traffic control towers could be shut down. Overnight shifts at an additional 60 towers could be eliminated.
In his comments Friday, Obama tried to put a personal face on the budget standoff.
“Starting tomorrow, everybody here, all the folks who are cleaning the floors at the Capitol ... they’re going to have less pay, the janitors, the security guards. They just got a pay cut, and they’ve got to figure out how to manage that,” the president said. “That’s real.”
Bruce Moyer, chairman of the Federal-Postal Coalition, an alliance of unions representing about 2.5 million federal and postal service employees, said those workers are the victims in the political standoff.
“It’s stressful. It’s uncertain,” he said. “You can’t actually come in to do your job as the American people expect you to if you’re furloughed.”
Obama put the blame on Republicans, saying they chose the steep cuts rather than agree to compromise. He insisted the only way to avert the cuts was a package that combined reduced spending with new revenues from higher taxes on the wealthy and corporations.
But Republicans blamed Obama for the across-the-board cuts and said they would not approve new taxes after agreeing to several in the deal to avert the so-called fiscal cliff crisis Jan. 1.
“Let’s make it clear the president got his tax hike on Jan. 1,” Boehner said. “The discussion about revenue, in my view, is over. It’s about taking on the spending problem in Washington.”
kathleen.hennessey@latimes.com
Times staff writers Noam N. Levey, Christi Parsons, Michael A. Memoli and David Willman in Washington contributed to this report.
