Obama, Republicans maneuver over sequester, government shut-down

Two days after sequester-driven budget cuts went into effect, both sides in the battle – Republican lawmakers and the Obama White House – went into a 'Plan B' of sorts.

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    Gene Sperling, director of the National Economic Council, appears on 'Meet the Press' in Washington Sunday.
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Two days after sequester-driven budget cuts went into effect, both sides in the battle – Republican lawmakers and the Obama White House – went into a “Plan B” of sorts.

At this point there isn’t much to it. Spokesmen from each side flooded the Sunday TV news shows with reiterated positions and little sign of give. Meanwhile, President Obama has been phoning senators of both parties, looking for what White House economic adviser Gene Sperling calls “a coalition of the willing, a caucus for common sense.”

“He’s making those calls … trying to build trust, so he’s going to be having a lot more conversations like that,” Mr. Sperling said on CNN’s “State of the Union” Sunday. On the Democratic side, that means long-term entitlement reform to cut costs; on the Republican side, a reform of the tax code that would increase revenues.

Recommended: Sequester 101: What happens if $85 billion in cuts hit on March 1

The more immediate problem is what to do about the sequester and its $85 billion in across-the-board cuts to defense and nondefense spending.

”As this pain starts to gradually spread to communities affected by military spending, to children who need mental health services, to people who care about our border security, I believe that more Republican colleagues who are concerned about this harm to their constituents will choose bipartisan compromise on revenue-raising tax reform with serious entitlement reform,” Sperling said on ABC’s “This Week.”

[We can’t mention Sperling without noting that his feud with Washington Post journalist Bob Woodward over the sequester’s paternity seems to have sputtered out. On ABC’s “This Week,” Sperling called Mr. Woodward “a legend,” and he described their relationship as "very friendly and respectful." On CBS’s “Face the Nation,” Woodward said he’d be inviting Sperling over for dinner. “I'm going to invite him over to my house if he'll come and hopefully he'll bring others from the White House, maybe the president himself,” he said. “You know, talking really works."]

While he once warned (in a Wall Street Journal op-ed column) that the sequester would harm national security and cost thousands of jobs, House Speaker John Boehner – as well as other GOP leaders – have backed away from that position.

“I don’t know whether it’s going to hurt the economy or not,” he said on NBC’s “Meet the Press.” “I don’t think anyone quite understands how the sequester is really going to work.”

It’s almost certain to hit some regions and communities harder than others.

Some 90,000 civilian Defense Department employees in Virginia could be furloughed, according to The New York Times, and many more people who work for government contractors could see their work cut as well. Beyond that, the ripple effect on businesses providing the mundane goods and services of everyday life could be impacted as well, as families tighten their belts.

“If the sequester occurs as it’s currently stated, I would expect the state of Virginia to go into a recession,” economist Christine Chmura told The New York Times.

One thing both sides agree on is the need to avoid a government shutdown.

The House this week will move on a measure to continue government funding through the end of the fiscal year Sept. 30, Speaker Boehner said. The current continuing resolution expires on March 27.

The White House has no stomach for a fight over shutting down the government either.

“What is fair is that if the Republicans stay with their part of the deal – meaning that they put forward a continuing resolution that’s reasonable, not political, stays at the level we agreed to, which is $1.043 trillion – if they agree to that, which they suggested they would, the president doesn’t believe in manufacturing another crisis,” Sperling said.

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