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US sees spending cut 2nd time
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The United States faces a second round of automatic, across-the-board spending cuts this year that promise to be far more painful than the first, amid a gloomy outlook for budget negotiations set to resume this week.
The first round of cuts, which took effect last year when bitterly divided Democrats and Republicans failed to come up with a deficit-reduction agreement, didn’t live up to the dire predictions from the Obama administration and others, who warned big disruptions of government services.
Several federal agencies found lots of loose change that helped them through the automatic cuts in the 2013 budget year that ended on September 30, allowing them to minimize the number of public employees forced off the job and maintain many services. Most of that money has been spent.
The Pentagon used more than US$5 billion in unspent money from previous years to ease its US$39 billion budget cut. Employee furloughs originally scheduled for 11 days were cut back to six days. The Justice Department found over US$500 million in similar money that allowed agencies like the FBI to avoid furloughs altogether.
Finding replacement cuts is the priority of budget talks scheduled to resume this week, but many observers think the talks won’t bear fruit. It’s a continuation of the partisan bickering that has gripped Washington for years. The talks come as both political parties are grappling with the fallout from the 16-day partial government shutdown that resulted last month while the two sides fought over a temporary spending bill.
For the time being, Congress has frozen 2014 spending at 2013 levels while negotiators seek a budget deal that would ease some of the automatic cuts. Absent a deal, the spending “caps” on agency operating budgets will shrink by another US$20 billion or so, with most of that money squeezed out of the Pentagon.
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