March 14 2013 BREAKING NEWS Obama: Sequestration Crisis Will 'Inflict Pain,' Congress Should Help With Compromise - End Times news update 3-14-13

REUTERS news update By Matt Spetalnick WASHINGTON, March 2 (Reuters) - Just hours after across-the-board spending cuts officially took effect, President Barack Obama pressed Congress on Saturday to work with him on a compromise to halt a fiscal crisis he said was starting to "inflict pain" on communities across the United States.

Obama and a bipartisan group of congressional leaders failed on Friday to avoid the deep spending reductions known as the "sequester," which automatically kicked in overnight in the latest sign of dysfunction in a divided Washington.

If left in place without legislative remedy, government agencies will have to hack a total of $85 billion from their budgets between Saturday and Oct. 1, cuts that over time could cause economic harm, slash jobs and curb military readiness.

"These cuts are not smart," Obama said in his weekly radio and Internet address. "They will hurt our economy and cost us jobs. And Congress can turn them off at any time - as soon as both sides are willing to compromise."

Obama signed an order on Friday night that started putting the cuts into effect.

At the heart of Washington's persistent fiscal showdowns is disagreement over how to slash the budget deficit and the $16 trillion national debt, bloated over the years by wars in Iraq and Afghanistan and government stimulus for the ailing economy.

The Democratic president wants to close the fiscal gap with spending cuts and tax hikes - what he calls a "balanced approach." But Republicans do not want to concede again on taxes after doing so in negotiations over the "fiscal cliff" at the New Year.

"The discussion about revenue, in my view, is over. It's about taking on the spending problem," John Boehner, the Republican House of Representatives speaker, said on leaving the talks between Obama and congressional leaders on Friday.

As Obama and his aides have done for weeks, the president in his radio address offered a litany of hardships he said would flow from the sequester, saying, "Severe budget cuts ... have already started to inflict pain on communities across the country."

"Beginning this week, businesses that work with the military will have to lay folks off. Communities near military bases will take a serious blow. Hundreds of thousands of Americans who serve their country - Border Patrol agents, FBI agents, civilians who work for the Defense Department - will see their wages cut and their hours reduced," he said.

"The longer these cuts remain in place, the greater the damage," he said. "Economists estimate they could eventually cost us more than 750,000 jobs and slow our economy by over one-half of one percent." Despite that, financial markets shrugged off the stalemate on Friday.

What Is The Sequester? by The Huffington Post
What Is The Sequester?
The sequester is what everyone, at least in Washington, seems to be talking about. But what is sequestration exactly?

Set to begin March 1 at 11:59 p.m., the sequester is a set of automatic spending cuts put into law by the Budget Control Act. Signed by President Barack Obama in August 2011, that legislation raised the debt ceiling and sought to apply pressure on Congress to come up with a longer term plan for deficit reduction.

The $1.2 trillion in budget cuts would be spread over nine years and are equally divided between domestic and defense-related spending. During the remainder of the 2013 fiscal year, $85 billion worth of cuts are set to go into effect. The budget cuts would end in 2021.

Why is the sequester happening?
When the debt limit was raised in 2011, Republicans demanded that budget cuts be included in the legislation. The Congress Joint Select Committee on Deficit Reduction -- or the "super committee" put in charge of figuring out how to implement the cuts called for in the Budget Control Act -- ultimately proved unable to reach a bipartisan agreement on cutting $1.2 trillion from the deficit. With the threat of automatic sequestration still looming, Congress was tasked with finding those cuts.

What funding will the sequester affect?
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The sequester will affect government spending across the board. The military will see $550 billion in cuts, drawing funds away from national security and military operations. On the domestic side, cuts will affect health care, education, law enforcement, disaster relief, unemployment benefits, non-profit organization funds, scientific research and more.

Will any funding not be affected?
The sequester stipulates certain areas of government spending that will see no cuts. No money will be drawn from spending on wars and military personnel. Funding allocated for Medicaid, Social Security, Pell grants, veterans' benefits and some low-income programs will not be affected, either.