Obama Signs Order To Begin Spending Cuts

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WASHINGTON, D.C. (CBS News) – President Barack Obama has signed an order authorizing the government to begin cutting $85 billion from federal accounts, officially enacting across-the-board reductions that he opposed but failed to avert.

Obama acted Friday, the deadline for the president and Congress to avoid the steep, one-year cuts.

Obama has insisted on replacing the cuts, known as a “sequester” in government budget language, with tax increases and cuts spread out over time. Republicans have rejected any plan that included tax revenue.

The government says the reductions will soon result in furlough notices to government employees and will trim government spending on defense contracts and in domestic government programs. Active military personnel and anti-poverty and low-income assistance programs are largely protected from the cuts.

When President Obama and Congress couldn’t agree on how to rein-in federal spending, both Republicans and Democrats devised the Budget Control Act of 2011. It set up automatic, across-the-board, spending cuts that were so onerous, they would force the parties to find a better way. They had a year and a-half to do it. But they didn’t. Now those cuts are about to kick in at midnight

It’s a feature of this law that federal managers can’t chose where to cut. The reductions must be across-the-board, thereby eliminating both the wasteful and the vital. A few programs, however, are exempt.

As CBS News correspondent Nancy Cordes reported, food stamp funding will not be cut. And neither will children’s health subsidies or Medicaid. Democrats protected those programs for the poor and a few others when they were negotiating the sequester with Republicans two years ago.

Complete coverage of the sequester
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And both sides agreed that military pay and benefits, along with funding for veterans, should be shielded from the budget axe as well.

But the rest of the federal government will be cut by $85 billion this year, and more than $100 billion each of the nine years after that — with the cuts split between defense and domestic spending. That translates into an 8 percent cut in Pentagon funding. Most domestic agencies will have to cut at least 5 percent from their ledgers.

Medicare itself won’t get cut, but doctors who see Medicare patients will see their reimbursements trimmed by 2 percent.

And there are many programs for the needy that will get cut back — like home heating assistance and unemployment insurance.

But some Democrats like Arizona Rep. Raul Grijalva see a silver lining. They finally got the big defense cuts they’ve been wanting for decades.

“There are excesses everywhere you look,” he said, “but if this requires the Pentagon to examine itself, and in the process of that examination come up with savings and make a military force that is up to the 21st century, than I think that will be a good thing for America.

Many Republicans see partial victory too. The sequester may not be perfect, they say, but at least it cuts spending — a major GOP priority.

“If you listen to the administration, you’d assume this is the last day that it’s safe to go outside,” said Missouri Sen. Roy Blunt.

Republicans argue that the cuts will not be as devastating as the president predicts. One thing that will not get cut — lawmaker pay — though they will have to cut their office budgets, so that could mean some staffers may face layoffs.