White House seeks 'balanced way' to budget fix

WASHINGTON (AP) - President Barack Obama is concerned about the effect that looming, drastic across-the-board budget cuts will have on the middle class, his new chief of staff said Sunday.

Congressional Republicans predicted the cuts would start as scheduled next month and blamed Mr Obama not only for doing little to stop them but for the idea itself.

The cuts, called the sequester, would drain US$85 billion from the government's budget over the coming seven months. Actual cuts may be around 13 per cent for defence and 9 per cent for other programmes because lawmakers delayed their impact, requiring savings over a shorter period of time.

Last week, the White House last week let loose a list of ways Americans would feel the cuts, from longer waits at airport security to as many as 13,000 teachers being laid off.

Outgoing Secretary of Defence Leon Panetta told a congressional panel that the sequester would hollow the US military because it would give the Pentagon little leeway in deciding how best to spend the money.

Mr Denis McDonough, the president's chief of staff, warned the cuts would come as the stock market is coming back, the housing market has improved and the number of jobs has grown, and urged Congress to consider a balanced approach that would further strengthen the economy and, in turn, the middle class.

"This isn't a spending fight for us," Mr McDonough told NBC television's Meet the Press. ''This is a fight about whether we're going to make the investments in middle class families in this country, in education, in science and technology, in food inspection, and those kinds of things."

Senate Democrats last week offered a plan they say is a balanced approach of more revenue and budget cuts. The White House supports the proposal, but it drew an icy reception from Republicans, who say the president got the tax increases he wanted during the agreement in early January to avoid the "fiscal cliff."

That deal increased income tax rates for the wealthiest Americans while maintaining tax cuts for the middle class enacted during President George W. Bush's administration. It delayed the sequester from going into effect for two months "The question isn't whether we're going to insist on some position because that's the ideologically right position," Mr McDonough said.

"This should not be a social science experiment. This should be a question where we ask ourselves, what is most important to the economy, what is most important to the middle class families of this country, and that's the way the president is going to do this." South Carolina's Senator Lindsay Graham was among the Republicans on Sunday who recalled the president's position on the sequester in the fall.

"The president promised in the campaign sequestration would not happen. Now, he is allowing it to happen," Mr Graham said on Fox News Sunday. "He's the commander-in-chief and on his watch, we're going to begin to unravel the finest military in the history of the world, at a time when we need it most," Mr Graham, a member of the Senate Armed Services Committee added.

"If you want to look at ways to find US$1.2 trillion in savings over the next decade, let's look at Obamacare. Let's don't destroy the military and just cut blindly across the board. There are many ways to do this." However, Mr Graham offered no specifics.

The proposal put forth by Senate Democrats would generate revenue from plugging some tax loopholes, such as for the oil and gas industry, businesses that have sent jobs overseas and a 30 percent tax rate for millionaires.

Representative Paul Ryan, who chairs the House Budget Committee, advocates for plugging loopholes, but as part of a discussion on tax reform, not sequestration.

"Loopholes are necessary for tax reform," Mr Ryan said on ABC's This Week. ''If you take them for spending, you're blocking tax reform and you're really not getting the deficit under control."

With the March 1 deadline fast approaching, Senator Chuck Schumer, a New York Democrat and close ally of the White House, predicted that Republicans will eventually join Democrats to avoid the cuts.

"They have no choice," Mr Schumer said on CNN's State Of The Union. ''Their arguments are untenable and don't meet the favor of hardly anyone other than themselves and the special interests they're protecting."