The U.S. government stumbled headlong on Friday (March 1) toward wide-ranging spending cuts that threaten to hinder the economic recovery, after President Barack Obama and congressional leaders failed to find an alternative budget plan.
Reuters reported that the cuts, locked in during a bout of deficit-reduction fever in 2011, can only be halted by agreement between Congress and the White House.
A deal proved elusive in talks at the White House on Friday, meaning that government agencies will now begin to hack a total of $85 billion from their budgets between Saturday and October 1. Financial markets in New York shrugged off the stalemate in Washington.
Democrats predict these cuts could soon have major impact on national parks while causing air traffic delays, furloughs for hundreds of thousands of federal employees and disruption to education and law enforcement.
The full brunt of the automatic cuts will be borne over seven months, and Congress can stop them at any time if the two parties agree on how to do so.
But Obama was resigned to budgets shrinking.
“Even with these cuts in place, folks all across this country will work hard to make sure that we keep the recovery going, but Washington sure isn’t making it easy,” he said after meeting Republican and Democratic congressional leaders.
Given the absence of a deal, Obama is required by midnight to issue an order to federal agencies to reduce their budgets in a process known as “sequestration.” The White House budget office must send a report to Congress detailing the spending cuts.