The Obama administration was
confident that U.S. lawmakers will adopt deficit reduction in a
balanced manner and avoid a tax increase for 98 percent of the
American people starting next year, a White House spokesman said on
Tuesday.
The president was confident that the Congress will take the
appropriate action to achieve a balanced deficit reduction plan in
order to avoid onerous cuts in both defense and non-defense spending
that were written into the law by the Congress, White House
spokesman Jay Carney Tuesday told reporters aboard Air Force One en
route to Ohio.
Analysts were watching closely whether the U.S. Congress would be
able to lessen the impact of 560 billion U.S. dollars in tax
increases and spending cuts, or sequester, set to take effect
starting next year, a scenario dubbed as the "fiscal cliff".
"The sequester, which was designed and passed by the Congress,
was never meant to become policy. It was never meant to be
implemented. It's designed a trigger, a forcing mechanism to compel
the Congress to make the difficult decisions required to reach a
balanced deficit reduction package," Carney added.
Carney reiterated the stance of the Obama administration on
budget deficit cuts, as both revenue increases and outlays reduction
should be included in a balanced plan.
According to the Budget Control Act of last year, a bipartisan
super-committee must find 1.2 trillion U.S. dollars in budget cuts,
or a sequester of the same amount will come into effect. The
sequester mechanism cuts evenly to national security and social
programs. Since the super-committee failed to ink a deal last year,
the automatic cuts were to take effect on Jan. 1 next year if the
Congress cannot act to stop it this year.
The U.S. Congressional Budget Office has warned that the so-
called "fiscal cliff" would slice up to 4 percentage points off U.
S. economic growth next year, causing the economy to contract in the
first half, if all the deficit-cutting measures occur at once.
