February looked bright for the US economy as more jobs than expected were posted, while unemployment figures fell to 7.7 percent. Analysts and economists are warning that the draconian budget cuts about to go into effect automatically could erase the gains and send the economy back to the doldrums.
Democrat and Republican lawmakers are at odds about what to do about the so-called sequester. Republicans are not willing to do much except to limit the cuts to military spending, while Democrats would like to see the postponement of all the cuts across the board, until a more equitable solution that won’t harm the blossoming economy in so drastic a manner.
Rather than letting February’s good news sway either side to come to a compromise agreement, there was instead a further increased clinging to each side’s position in this old, even stale, budget fight.
“Any job creation is positive news, but the fact is unemployment in America is still way above the levels the Obama White House projected when the trillion-dollar stimulus spending bill was enacted, and the federal government’s ongoing spending binge has resulted in a debt that exceeds the size of our entire economy,” Republican Speaker of the House John Boehner said.
But the Obama administration said that it is up to lawmaker’s to ease the effect the sequester will have on the economy.
“The Administration continues to urge Congress to move toward a sustainable Federal budget in a responsible way that balances tax loophole closing, entitlement reform, and sensible spending cuts, while making critical investments in the economy that promote growth and job creation and protecting our most vulnerable citizens,” stated Alan Krueger, chairman of the White House Council of Economic Advisers.