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Obama to unveil plans to avert budget cuts

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(Globalpost/GlobalPost)

US President Barack Obama will Tuesday unveil short term spending reductions and tax reforms designed to avert punishing multi-billion dollar automatic budget cuts due to kick in on March 1.

A White House official said the president would make a statement at 1:15 pm (1815 GMT) on plans to avoid "deep, indiscriminate cuts to domestic and defense programs" known as the sequester.

The sequester was agreed by the president and Congress last year to be so punishing that it would force Washington's warring political factions to forge an agreement on deficit cuts.

But no agreement is in sight, and the cuts have already been put off once, by a short-term deal agreed between Obama and Republicans late last year.

"Given that the budget process in Congress won't likely be completed by March 1, the president on Tuesday will call on Congress to pass a smaller package of spending cuts and tax reforms to avoid the economically harmful consequences of the sequester for a few months," the official said.

House Republican Speaker John Boehner Tuesday blamed Obama for the sequester, which many observers now believe will come into force, despite its punitive impact on defense and social programs and the fragile US economy.

"We believe there is a better way to reduce the deficit, but Americans do not support sacrificing real spending cuts for more tax hikes," Boehner said in a statement.

"The president's sequester should be replaced with spending cuts and reforms that will start us on the path to balancing the budget in 10 years."

Cuts due to come into force in March will slash defense spending by $55 billion and non defense discretionary spending by $27 billion this year, and will have a painful impact on the economy.

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

col/jm

http://www.globalpost.com/dispatch/news/afp/130205/obama-unveil-plans-avert-budget-cuts-0