PRESIDENT Barack Obama yesterday made a frenzied round of calls to congressional leaders, but could not broker a deal to dial back budget cuts that went into effect on Friday.
The US is faced with $85bn (£56.bn) of automatic spending cuts, half of which are to the country’s giant defence budget, that Obama was forced to officially sign into action on 1 March and will be fully carried out by 30 September.
Policymakers and some economists are worried that the cuts will detract from the US’s faltering economic recovery, but Republican representatives are steadfastly refusing to agree to any deal that hikes taxes, after caving in heavily on taxation in the fiscal cliff deal.
The Republicans say they will not make a deal that rolls the spending cuts back without agreeing to reductions in spending over the long-term, to rein in the $1 trillion the US is adding annually to its $16 trillion debt.
“The president got $650bn of higher taxes on 1 January,” Republican House of Representatives Boehner said. “How much more does he want? You can’t tax our way out of every problem. We’ve got to deal with the spending side.”
But Obama claimed that letting the cuts hit would mean losing hundreds of thousands of jobs.