Obama: government will manage sequester as well as it can

WASHINGTON Mon Mar 4, 2013 2:16pm EST

U.S. President Barack Obama nominates air quality expert Gina McCarthy to lead the Environmental Protection Agency, nuclear physicist Ernest Moniz to head the Department of Energy and Walmart's philanthropic head Sylvia Mathews Burwell to become director of the White House budget office, in the East Room of the White House in Washington, March 4, 2013. REUTERS/Jason Reed

U.S. President Barack Obama nominates air quality expert Gina McCarthy to lead the Environmental Protection Agency, nuclear physicist Ernest Moniz to head the Department of Energy and Walmart's philanthropic head Sylvia Mathews Burwell to become director of the White House budget office, in the East Room of the White House in Washington, March 4, 2013.

Credit: Reuters/Jason Reed

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WASHINGTON (Reuters) - President Barack Obama said on Monday that government agencies would need to make "very difficult decisions" as a result of sharp spending cuts that went into effect last week but warned that families would be hurt and economic growth would suffer.

Government agencies must cut their spending by $85 billion as of Friday after the president and Congress failed to agree to an alternative deficit reduction plan. The effects of those cuts will be rolled out in coming weeks and months as government agencies put in place plans for operating with less money.

"We are going to manage it the best we can to try to minimize the impacts on American families but it's not the way for us to go about deficit reduction," Obama said at the beginning of the first Cabinet meeting of his second term.

Obama said he would continue to try to get Republicans to compromise on a plan to roll back the cuts, taking place under a process known as sequestration. Republican leaders have said they will not negotiate so long as the president insists that increasing taxes be part of a resolution.

Obama discussed the budget impasse with lawmakers over the weekend. He said he would be willing to make cuts to government-run programs Medicare and Social Security as a way to blunt the effects of the spending cuts.

Republicans have long argued that the only way to tame budget deficits over time is by slowing the cost of sprawling social safety net programs.

These include the Medicaid healthcare program for the poor, the Medicare government healthcare program for the elderly and disabled, and the Social Security retirement program, which are becoming more expensive as a large segment of the U.S. population hits retirement age.

(Reporting By Mark Felsenthal; Editing by Sandra Maler)

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Comments (4)
Speaker2 wrote:
Simple solutions to the entitlement program.

1. Increase Social Security payroll deduction from the current 109K limit to all income up to 1-million

2. Go to a single-payer health care system for Medicare and health care. Set drug pricing and standardize medical cost. No more 18-dollar aspirins.

Mean test Social Security, no benefits for people in retirement with outside incomes over 150,000.

Mean test Social Security, same as above.

Funny how all other leading industrial countries have both national medical care and pensions. Sad thing is we don’t even get good medical care for the high prices we pay.

Mar 04, 2013 2:56pm EST  --  Report as abuse
jaham wrote:
Obama thinks he has leverage here to raise more taxes but he doesn’t.

Raising taxes on corporations and making entitlements solvent are two separate issues.

Republicans can simply sit back and wait for the entitlements crisis to get worse until Democrats agree to fix the issue without holding taxes for ransom.

Entitlements need reforming and they will be reformed, but to expect that Republicans will trade objectively needed entitlement reform for punishing the private sector with taxes as some sort of “fair” trade-off or compromise is purely Democratic delusion.

This is almost like Democrats thinking Republicans would balk at defense cuts and although them to replace cuts with more taxes. Again the sequester was made law in 2011 and Republicans don’t need to budge unless Democrats want to replace indiscriminate cuts with pragmatic cuts; expecting Republicans top trade spending cuts for tax increase is pure delusion.

Obama needs to put down his victory champagne and start leading on this countries issues without trying to tie everything to tax increases, LOL…otherwise he will accomplish nothing for the remainder of his lame duck session.

Mar 04, 2013 3:16pm EST  --  Report as abuse
Axepop11 wrote:
Not a bad start but it’s not governments responsibility to manage our health care. Health care should be at state level IF it gets involved. Taking money from one person to give it to another against their will is legal thuggery. All this talk about health insurance (note care) does not take into consideration of a few things: 1) Insurance is a for profit BUSINESS, 2)How do you pay for it, by “legal” force(tyranny), 3)Who manages it, well by our government(they never screw things up). Now if there was proper and reasonable control by real doctors not affiliated with any drug company or medical conglomerate then maybe it has a chance. But HIPPA and now Obamacare have never addressed the real issues, price gouging, cost bloating, exclusive purchasing contracts.

Mar 04, 2013 3:32pm EST  --  Report as abuse
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