THE RESET: One fiscal crisis gives way to another
If you've missed the latest fiscal melodrama gripping our nation's capital, don't worry. Stay tuned. More nail-biting episodes are on the way.
Automatic government-wide spending cuts — called a "sequester" in bureaucratic jargon — of roughly $85 billion will start kicking in now that President Barack Obama and Congress have failed to meet a Friday deadline for striking a deal to avert or soften the reductions.
"The pain will be real," Obama told reporters, saying the impasse saddles Americans with "a series of dumb, arbitrary cuts."
The current budget crisis comes just two months after tense year-end negotiations yielded a New Year's Day deal keeping the government from plunging over a "fiscal cliff" of huge spending cuts and tax increases.
The next self-inflicted panic deadline is the March 27 expiration of stopgap legislation to fund the entire government.
"I'm hopeful that we won't have to deal with the threat of a government shutdown while we're dealing with the sequester at the same time," House Speaker John Boehner said Friday after a White House meeting between Obama and congressional leaders failed to produce a breakthrough.
Another deadline comes May 18, when legislation permitting the Treasury to borrow above the current $16.4 trillion debt limit runs out. Failing to raise it further threatens a first-ever default on the government's debt.
It took over 200 years for government borrowing, begun to help finance the Revolutionary War, to climb above $1 trillion, which it did in President Ronald Reagan's first term.
By Friday, the national debt stood at a whopping $16.61 trillion.
After the debt limit, another big deadline comes Oct. 1 when the government's new fiscal year begins. If new spending bills aren't passed by then for every department and agency, Congress must yet again pass emergency stopgap legislation.
It's no apocalypse, Obama said of the government sequester now taking hold. "It's just dumb."
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