Obama cranks up budget showdown blame game

WASHINGTON (AFP) - President Barack Obama cranked up the blame game on Tuesday over "meat cleaver" budget cuts due in 10 days, warning of dire damage to the US economy and accusing Republicans of refusing to compromise.

Mr Obama surrounded himself with uniformed emergency workers who he said may not be able to respond to distress calls when stinging automatic billion-dollar cuts known as the "sequester" come into force on March 1.

"If Congress allows this meat cleaver approach to take place, it will jeopardise our military readiness, it will eviscerate job-creating investments in education and energy and medical research," Mr Obama said.

Emergency responders may not be able to properly respond to disasters, border patrol agents will see their hours cut and FBI agents will be furloughed, he warned.

"Federal prosecutors will have to close cases and let criminals go," Mr Obama warned. "Air traffic controllers and airport security will see cutbacks ... Thousands of teachers and educators will be laid off."

Mr Obama wants to use a "balanced" mix of spending cuts and tax revenue increases achieved by closing loopholes used by the wealthy to cut the US deficit, and says he will not sign a bill that harms the middle class.

Republicans, who lost a previous showdown with Mr Obama over raising tax rates for the rich, say the debate over hiking taxes is closed.

They say they are willing to close loopholes, but only in the context of a sweeping reform of the tax code, and maintain that Mr Obama wants to use proceeds from any immediate revenue rises for more bloated government spending.

The slashing cuts to defence and domestic spending were mandated in an agreement between Mr Obama and Republican foes to end a previous budget row.

The consequences of the threatened sequester were supposed to be so punishing that Democrats and Republicans would have no choice but to reach a deal to reduce the deficit.

But no deal has been done and most observers expect the cuts to happen, prompting both sides to deploy a blame game approach to prepare the way for a post-sequester showdown.

Senior officials said privately they expected that pressure would rise on Republicans, forcing them to concede to Mr Obama's demands, just as they did following the "fiscal cliff" showdown over taxes late last year.

They are also betting heat will rise on Republicans when furlough notices are sent to some government employees before March 1.

The president said that his door was open for talks and that he was willing to make tough spending cuts and reforms.

"Republicans in Congress face a simple choice: are they willing to compromise to protect vital investments in education and health care and national security and all the jobs that depend on them?" he asked.

"Or would they rather put hundreds of thousands of jobs and our entire economy at risk just to protect a few special interest tax loopholes that benefit only the wealthiest Americans and biggest corporations?

"That's the choice." But House Speaker John Boehner refused to cede his position Tuesday.

"Just last month, the president got his higher taxes on the wealthy, and he's already back for more," he said.

"The American people understand that the revenue debate is now closed. We should close loopholes and carve-outs in the tax code, but that revenue should be used to lower rates across the board." Republicans argue that Mr Obama came up with the idea for the sequester - but since it also passed both chambers of Congress, the blame is shared.

On the sidelines of the debate, the authors of an independent deficit-reduction plan that failed to win approval in 2010 put forward a re-hashed effort that would cut the fiscal gap by US$2.4 trillion (S$3 trillion) over 10 years.

The new framework by former Republican senator Alan Simpson and Erskine Bowles, ex-chief of staff to president Bill Clinton, would raise US$600 billion in new revenue and impose a three-to one ratio of spending cuts to tax hikes.

The White House said the proposal proved that cutting the idea that cutting the deficit without raising new revenues was a fallacy.

Cuts due on March 1 will slash defence spending by US$55 billion and non-defense discretionary spending by US$27 billion this year.

The Bipartisan Policy Center has said that a million jobs will be lost by the end of next year because of a slowdown brought on by the cuts.