Barack Obama warns of risks over budget cut uncertainty
Despite the urgent rhetoric, there was no indication the White House and congressional Republicans were actively negotiating a deal to avoid the $85 billion in budget cuts ahead of the end of the week deadline. Congressional leaders have recently indicated their willingness to let the cuts take effect and stay in place for weeks, if not much longer.
"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.''
The automatic cuts were designed to be so unattractive and damaging that they would force Congress and the Obama administration to find a better way to address the country's massive deficit. They were meant to take effect only if a congressional super-committee failed to come up with at least $1 trillion in savings from benefit programs.
Republicans insist reduced spending needs to be the focus of a deal and have rejected the president's demand to include higher taxes as part of a compromise. They say legislation passed in early January already raises taxes on the wealthiest Americans to generate an estimated $600 billion for the Treasury over a decade. Obama is now proposing closing tax loopholes that benefit the wealthiest Americans
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