Automatic Budget Cuts Near As Democrats, GOP Stand Firm

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With Congress headed for a recess, prospects are dimming for a deal to keep the nation from falling off the next fiscal cliff - sequestration. That's the term for automatic spending cuts that go into effect March 1.

NPR's Mara Liasson explains how the White House and Congress got to this impasse and why it's so hard to get past it.

MARA LIASSON, BYLINE: There's no bigger bully pulpit than the president's annual State of the Union address. And on Tuesday night President Obama used it to hammer the Republicans in the fight over the budget.

In 2011, he said, Congress passed a law saying that if both parties couldn't agree on a plan to reduce the deficit, about a trillion dollars' worth of budget cuts would automatically go into effect this year.

PRESIDENT BARACK OBAMA: These sudden, harsh, arbitrary cuts would jeopardize our military readiness. They'd devastate priorities like education and energy and medical research. They would certainly slow our recovery and cost us hundreds of thousands of jobs.

LIASSON: If the cuts are so bad, then why did the Congress pass them and the president sign them in the first place?

Gene Sperling, the president's top economic advisor, tried to explain this in an interview with NPR this week.

GENE SPERLING: Let's remember that those types of cuts were designed to be so painful that they would force all of us to the table to compromise.

LIASSON: But it hasn't worked out that way.

DAVID WINSTON: They assumed that Republicans were going to behave in a particular way, and they were wrong.

LIASSON: That's David Winston, a top advisor to the House Republican leadership. He says the White House miscalculated when it figured that because the cuts fell more heavily on defense programs Republican's would be willing to consider raising some tax revenue to avoid them. Not so, says Winston.

WINSTON: Clearly, Republicans would prefer to not have those defense cuts go through as deep as they are, but having said that, getting spending cuts in place at this point is a higher priority for many Republicans.

LIASSON: At this point, both ends of Pennsylvania Avenue seem resigned to the sequester going into effect - at least for a while. The Senate minority leader, Republican Mitch McConnell, who's been known to swoop in and cobble together last minute deals, says not this time.

SENATOR MITCH MCCONNELL: Read my lips: I'm not interested in an 11th hour negotiation. My view, and I believe the view of the overwhelming majority of Senate Republicans, is that we ought to keep the commitment we made a year and a half ago, and that is to achieve this amount of spending reduction without raising taxes in this coming year.

LIASSON: Over on the House side, Speaker John Boehner says he won't do anything unless the Senate acts first on a sequester alternative.

REPRESENTATIVE JOHN BOEHNER: If they're willing to pass a bill, we'll find some way to work with them to address this problem. I've made it perfectly clear though - the sequester, I don't like it. No one should like it. But the sequester is there because the president insisted that it be there.

LIASSON: By repeating talking points like that one, Republicans feel they've convinced the public they are not solely responsible for the sequester. But beyond that, it's hard for either side to game out the political risks. That will depend on how the public reacts to the cuts and who, if anyone, they blame. The White House has been trying to sound the alarm, pointing the finger directly at the GOP. Gene Sperling.

SPERLING: If they go into effect, it will hurt the middle class in many, many ways. And the reality is the only way out of that type of harm is for the Republicans to be willing to move off this ideologically rigid position that they can't find one single penny of revenue from any expenditure or loophole.

LIASSON: At least for now, Republicans are unmoved. And having the cuts go into effect, even temporarily, is part of the Republican strategy. They want to level the playing field after their end of the year defeat in a deal that raised tax rates for the wealthy without cutting any spending.

David Winston.

WINSTON: From a Republican's point of view, if you're talking about a balanced approach, you had the tax increases as a result of what happened at the end of last year, with the Bush tax cuts, and now you have the spending cuts to sort of go along with that.

LIASSON: If the sequester happens, then the White House and Congress will enter a new episode in the long-running Washington budget soap opera. This spring the president and the Senate Democrats will produce budgets, so will the House Republicans, and those budgets will lay out each party's plans for dealing with taxes and entitlements. Then, says Winston...

WINSTON: Let's at least have a debate so everybody can sit down and have this broader discussion. Doing this piecemeal is not going to work.

LIASSON: The broader discussion would be another attempt to reach a grand bargain, where Republicans agree to raise revenues through tax reforms and Democrats agree to cut entitlement spending, or the two sides could decide to kick the can down the road again.

Mara Liasson, NPR News, Washington. Transcript provided by NPR, Copyright NPR.