President calls budget cuts a ‘self-inflicted wound’ at Newport News Shipbuilding

Posted at 1:00 PM, Feb 21, 2013
and last updated 2013-02-26 12:58:03-05

Newport News, Va. - With the clock ticking, President Barack Obama traveled to military country Tuesday to boost pressure on Congress, saying the automatic, across-the-board spending cuts set to begin Friday could deliver a tremendous blow to the nation's economy and defense.

"These cuts are wrong. They're not smart. They're not fair. They're a self inflicted wound that doesn't have to happen," Obama said at a campaign-style event at the site of a major defense shipbuilding contractor in Newport News, Virginia.

If Congress fails to come up with an alternative plan by Friday's deadline, the federal government will be forced to slash its budget by $1.2 trillion over the next decade, with $85 billion being cut in the next seven months, alone.

Using a firm tone, Obama cautioned the audience that their jobs, along with hundreds of thousands of others, are "currently in jeopardy because of politics in Washington." The Obama administration has ratcheted up warnings about the reductions in the last few weeks, using Cabinet secretaries and campaign-style events to alert the public on the potential impact of the automatic cuts.

Lawmakers have discussed a proposal that would give the executive branch the authority and flexibility to amend the cuts so that they're "smarter" and more targeted on wasteful spending rather than spread out evenly across the board.

Obama, however, said Tuesday he's not interested in that idea.

"The problem is, when you're cutting $85 billion in seven months...there's no smart way to do that," he said.

The president spoke in front of a large ship propeller, one of four for a new aircraft carrier being built at the shipyard. A division of Huntington Ingalls Industries, Newport News Shipbuilding has a supplier base in all 50 states, many of which are small businesses that rely solely on the company for their business.

In a letter to the president last week, Republican Gov. Bob McDonnell laid out the potential impact that the spending cuts could have on defense-heavy Virginia, including a loss of about 82,000 direct jobs at federal agencies and contractors and an additional 82,000 indirect jobs. Northern Virginia would absorb more than 60% of the losses, Hampton Roads about 20% and Richmond about 12 percent, McDonnell wrote.

He added that the looming reductions are already having an adverse effect on the commonwealth and, when fully implemented, could force it and other states into a recession.

At issue is how to postpone or replace the spending cuts, known in Washington as the sequester. Obama and Democrats want to pass a bill that includes a mix of targeted cuts with an increase in taxes through the closing of certain loopholes for the wealthy. Republicans, however, say taxes are off the table.

"He's gotten his tax hikes," House Speaker John Boehner said Tuesday, referring to the-end-of-the-year fiscal cliff bill that raised tax rates on top earners. "It's time to focus on the real problem here in Washington and that is spending."

Republicans are also quick to point out that the White House was the first to float the spending cuts idea in 2011 as a way to incentivize lawmakers to come up with a comprehensive deficit-reduction plan.

But the White House argues the cuts were intended to be so dreadful and unwanted, that they were never supposed to happen. Obama argued Congress failed in coming up with legislation to prevent the cuts, saying too many Republicans refuse to compromise "even an inch" on tax loopholes and tax breaks.

It's time, he said, that they meet him in the middle.

"I've run my last election," he said. "I'm not interested in spin. I'm not interested in playing a blame game. At this point, all I'm interested in is just solving problems."

The president urged the audience to contact their members of Congress and call on them to act.

"I need you, Virginia, to keep up the pressure," he said. "I need you to keep up the effort. I need you to keep up the fight. If you do, Congress will listen."