Obama to again push $1.2T deficit cuts

WASHINGTON -- In its budget proposal next month, the Obama administration will urge lawmakers to revisit the failed attempt by a congressional supercommittee to cut the deficit by at least $1.2 trillion, the White House said.

The proposal runs counter to the common wisdom in Washington that any major deficit reduction effort is unlikely in a presidential election year. Instead, lawmakers are focusing on a one-year extension of a payroll tax cut and supplemental jobless benefits.

Also looming are sweeping across-the-board spending cuts required next year because of the supercommittee deadlock. Senior lawmakers like House Armed Services Committee chairman Howard McKeon, R-Calif., are focusing on a less ambitious one-year plan to give the Pentagon a reprieve from cuts.

The White House plan, likely to reprise new taxes and fee proposals that are nonstarters with the Republicans, would turn off the entire nine-year, $1.2 trillion across-the-board spending cuts, referred to as a "sequester."

"We have a sequester coming less than a year from now unless Congress acts," said a senior administration official. "We're going to ask Congress to do now what we think Congress should have done in December, which is enact more than $1.2 trillion in deficit reduction, turn off the sequester and maintain the [spending caps]."

That plan of budget cuts would be imposed under last summer's budget and debt pact between Obama and Congress that imposed $900 billion in savings from accounts appropriated by Congress each year and promised at least $1.2 trillion more from the work on the deficit supercommittee, or, failing that, across-the-board cuts to defense and domestic programs.

The threat of the across-the-board cuts was supposed to prod the panel, but it never got on track and collapsed just before Thanksgiving over intractable differences on tax increases and cuts to Medicare.

Policymakers face the prospect of more gridlock this year as election-year politics promise to further cripple the already limited ability of Obama and Republicans to work together. In that light, the administration's proposal could be doomed to dead-on-arrival status despite widespread desire to turn off the automatic cuts.