US Congress, White House Move To Deal With Fiscal Threats

By Reuters

Congress has made virtually no headway in averting the $109 billion in across the-board spending cuts that loom in January. On Tuesday, Jeffrey Zients, acting White House budget director, took the widely anticipated step of exempting military personnel accounts from the cuts.

“This step was taken because the administration believes it is in the national interest to safeguard the resources necessary to safeguard the men and women serving to defend our nation and to maintain the force levels required for national security,” an administration official said.

The military, however, is still expected to bear half of the anticipated cuts -- nearly $55 billion -- so weapons programs and other activities could be hit harder.

TACTICAL RETREAT

The six-month spending deal marks a major tactical shift for House Republicans, who have spent much of the past two years using government funding deadlines as leverage to demand deeper spending cuts. Bitter deficit reduction standoffs last year, driven largely by fiscal conservatives, threatened several government shutdowns and brought the United States to the brink of a historic debt default.

But this year, with presidential and congressional elections looming in just over three months, Republicans want to avoid a repeat that could stir up voter backlash against Republican presidential candidate Mitt Romney and the party’s drive to regain control of the Senate.

By immunizing Congress against a shutdown threat, Republicans feel they can keep the campaign focus on the weak economy.

“That’s where Republicans win and Democrats lose,” said a Republican House leadership aide.

But Democrats will get to tout that they have protected programs important to their core supporters, including food stamps and healthcare programs, from deeper spending cuts.

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