White House Report Details Automatic Budget Cuts - Wall Street Journal

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[h=3]By DAMIAN PALETTA[/h]WASHINGTON—Automatic federal spending reductions set to begin in January would cut $109 billion from the federal budget next year, including broad cuts to the military, wildfire management and food-safety inspections, a report from the White House said Friday.
The White House and congressional Republicans are trying to find ways to avoid the cuts, but have made little ground in reaching an agreement on how to replace the deficit-reduction measures put in place last year. The White House's new report, required by a law passed by last week, could prompt lawmakers to ramp up discussions.
The spending cuts are required as part of the agreement between the White House and Congress last year that was tied to the increase in the federal debt ceiling. They agreed that $1.2 trillion in deficit-reduction measures, mainly through spending cuts, would begin in January 2013 unless Congress could come up with an alternative plan. The reductions would be spread out over nine years.
The White House said Friday the spending cuts would total $984 billion, and the government would spend $216 billion less in interest payments on the federal debt.
In a nearly 400-page report, the White House ticked through the federal budget line by line, showing how a roughly 10% reduction in spending on military and other programs would affect government operations. There would also be a 2% cut in payments to Medicare providers, according to the report.
While many of the items might not draw much congressional interest, others could turn into political flashpoints.
For example, one line buried in the report shows that the spending cuts would include $129 million per year over nine years that was supposed to be allocated for the security, construction, and maintenance of American embassies around the world. There have been bipartisan calls to beef up embassy security, particularly in the Middle East, in the wake of violence at many U.S. embassies and the death of the U.S. ambassador this week in Libya.
The cuts include roughly $54.7 billion per year from defense spending, beginning in January and continuing for nine years.
Lawmakers from both parties have argued that the spending cuts—referred to in Washington as the "sequester"—need to be replaced with another deficit-reduction plan, but so far Democrats and Republicans haven't been able to reach a deal on how to proceed.
The White House and Democrats want any deficit-reduction deal to include more taxes, and many Republicans want to stop the spending cuts on military programs and focus more cuts on social programs like food stamps.
"Sequestration is a blunt and indiscriminate instrument," the White House report said. "It is not the responsible way for our Nation to achieve deficit reduction."
Disagreements on tax and spending policy have consumed Washington for the past two years and remain a flashpoint in the presidential election. Total U.S. government debt recently eclipsed $16 trillion for the first time, and the government is likely to run its fourth consecutive deficit of more than $1 trillion in the fiscal year that ends Sept. 30.
Lawmakers have said that earnest negotiations to address the looming spending cuts aren't expected to begin until after the election on Nov. 6.
Some federal spending is exempt from the cuts, including the pay of military service members, and Social Security and Medicare benefits.
Write to Damian Paletta at [email protected]

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