US – 2M Jobs Lost If Automatic Cuts Kick In

Republicans and Democrats seized on a new report estimating that automatic budget cuts will cost the economy 2 million jobs to level election-year charges that underscored the deep political divide over how to avert the looming crisis.

Roughly five months until the across-the-board reductions kick in, the Aerospace Industries Association unveiled a new report Tuesday that warned of jobs losses, billions in losses to the economy and a blow to wages from the $1.2 trillion, 10-year cuts in defense and domestic programs. The trade group that represents manufacturers, New Hampshire’s two senators and the mayors of Phoenix and San Diego cited the report in arguing that it was imperative that Congress act before the November election to avoid the cuts.

But the chasm between the two parties remains. President Barack Obama and Democrats want tax increases on high wage earners to be part of any alternative to the cuts, known in Washington as sequestration. Republicans reject that idea, contending that it would be reckless to raise taxes as the economy struggles to recover and arguing that the president is shirking his duty as commander in chief.

“Ignoring the reality of the sequester, on top of the demands by the president and his party to hike taxes, will result in fewer jobs, higher taxes on small businesses and working families, and compromise the ability of the United States to defend itself at home and abroad. This sort of so-called leadership is unacceptable,” said a statement from the office of House Majority Leader Eric Cantor, R-Va.

The report by Dr. Stephen Fuller of George Mason University and Chmura Economics and Analytics estimated that the cuts would reduce the nation’s gross domestic product by $215 billion next year while consumer confidence would plummet. The analysis is similar to other cautionary reports that have emerged in recent months from independent organizations that analyze federal spending. All the reports carry a degree of uncertainty since the government hasn’t spelled out where it would make the cuts…

via Lawmakers Seize On Report Detailing Impact Of Cuts : NPR.