Republicans, Obama in stalemate on avoiding automatic spending cuts

The Obama administration has given a framework to avoid the looming sequestration, but House Republicans say the proposals won't pass in either chamber. What now?

The Obama administration and the House Budget Committee’s Republicans butted heads again at a hearing April 25 about plans for dodging the upcoming sequestration that would require arbitrary spending cuts.

Committee Chairman Rep. Paul Ryan (R-Wis.) held the hearing to get answers on how President Barack Obama was planning to solve the looming sequester now that his proposals have failed in Congress. He emerged unsatisfied.

“It’s clear as mud to us. The purpose of the hearing was to get more clarity. I think we have even less now,” he said.

The sequester is a $109 billion across-the-board, inflexible, and arbitrary cut in spending that will occur under current law on Jan. 2, 2013. It was imposed when the so-called Supercommittee failed last year to agree to cuts that could have been planned more carefully.

Committee Republicans reiterated to Danny Werfel, controller of the Office of Federal Financial Management at the Office of Management and Budget, that President Barack Obama’s fiscal 2013 budget proposal, which includes plans to reduce the federal deficit, failed to pass in the House.

However, Werfel told the committee the Obama administration has done its part to steer clear of a sequester. It built a framework of cuts and tax increases to evade the impending action, and now it’s up to Congress, he said.

The administration released the President’s Plan for Economic Growth and Deficit Reduction in 2011, a framework on which the budget was built. It identified proposals from across the spectrum that would reduce the deficit.

“The administration has repeatedly provided a blueprint for Congress to avoid the sequester while meeting the nation’s fiscal challenges. Now responsibility rests with Congress and ample time remains,” Werfel said.

Still, Republicans asked Werfel for the president's plan B, saying the budget frameworks won’t pass either the House or Senate.

“It has failed, sir,” Rep. Tom Price (R-Ga.) said to Werfel.

Werfel said the president is ready to “roll up his sleeves” and work with Congress on a compromise.

As for preparation for the sequester, Werfel told the committee OMB has not started planning because officials see it as a waste of resources and expenses with eight months before a deadline.

In addition, OMB officials did the groundwork on planning in 2011 in light of a possible government shutdown then. He said planning disrupts normal operations because it pulls away experts, such as chief financial officers and other budget execution experts, for planning sessions.

He said OMB is holding off on the planning because it doesn’t want to move ahead prematurely. Congress and the president could reach a compromise before the deadline.

“We all know we have a limited resource environment, and every asset, every individual that we pull off their current mission-critical activities and priorities to do planning for certain contingencies has a cost associated with it,” Werfel said.

Ryan said his committee will propose new legislation in the coming weeks that will achieve more than 100 percent of the savings the sequester would achieve.

“House Republicans are bringing specific proposals to the table and we invite the administration to do the same,” he said.

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