Reuters: U.S.: White House prepping for budget cuts, to shield military pay

Reuters: U.S. Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

White House prepping for budget cuts, to shield military pay Jul 31st 2012, 19:24 Tweet Share this Email Print The White House is pictured shortly after sunrise in Washington, August 1, 2007. Credit: Reuters/Jason Reed WASHINGTON | Tue Jul 31, 2012 3:24pm EDT WASHINGTON (Reuters) - The White House said on Tuesday it was starting to get ready for potentially painful year-end spending cuts, and was committed to shielding U.S. military pay from any government budget crunch. Jeffrey Zients, acting director of President Barack Obama's Office of Management and Budget, said discussions would start soon on how to weather the looming automatic spending cuts, known as "sequestration," that would take place if Congress cannot achieve a deficit reduction deal. "If allowed to occur, the sequestration would be highly destructive to national security and domestic priorities, as well as to core government functions," he said in a memo to the heads of government departments and agencies. "The president remains confident that Congress will act, but because it has not yet made progress towards enacting sufficient deficit reduction, the Office of Management and Budget will work with agencies, as necessary, on issues raised by a sequestration of this magnitude." The decision to exempt military personnel accounts from the automatic cuts was widely expected, and had been recommended by Defense Secretary Leon Panetta and other top officials, despite its potential squeeze on other parts of the Pentagon budget. "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. Congress has been seeking ways to avoid the automatic spending cuts, but so far Republicans and Obama's fellow Democrats have failed to come up with a formula. Those decisions might not come until after the November 6 presidential and congressional elections, when lawmakers are expected to convene an end-of-year "lame duck" work session. In addition to the looming spending cuts, Congress will also have to grapple with whether to extend income tax cuts, first enacted under former President George W. Bush, which are set to expire on December 31. The shape of these "fiscal cliff" negotiations is expected to be influenced heavily by which political party comes out on top in the November vote. Obama and his Republican presidential rival, Mitt Romney, have been neck-and-neck in the polls. (Reporting by Laura MacInnis and Richard Cowan; Editing by Will Dunham) Tweet this Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions