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THE RESET: White House catalogs spending-cut woes

Friday - 2/22/2013, 11:24pm  ET

In this Wednesday, Nov. 22, 2012, photo, Eva Cevallos with her eleven-month daughter, Quinn, shop during the Thanksgiving Pre-Black Friday event at the Walmart Supercenter store in Rosemead, Calif. Wal-Mart Stores Inc. offered a weak business outlook Thursday, Feb. 21, 2013, as new economic challenges for its low-income U.S. shoppers start to take a toll. (AP Photo/Damian Dovarganes)

TOM RAUM
Associated Press

As the nation slowly recovers from the severe 2007-2009 recession, a battle rages between lawmakers who want the government to aggressively tackle deficits with spending cuts and those who caution the economy is still too frail to stand on its own feet.

The debate will be in the forefront when Congress returns on Monday from a nine-day recess, now facing a Friday deadline for roughly $85 billion in automatic, deficit-reduction spending cuts.

President Barack Obama and congressional Democrats suggest too much austerity now could threaten the recovery and damage the nation's social safety net. They support some spending cuts but also want higher revenues from closing tax loopholes.

Republicans, who control the House, insist on tackling deficits with spending cuts alone.

Neither side is optimistic a deal can be forged in the few remaining days. Obama's Thursday phone calls to Congress' top two Republicans -- House Speaker John Boehner and Senate Minority Leader Mitch McConnell -- produced no breakthrough.

The potential shock to the economy comes at a time of sharply rising gasoline prices and a slowdown in consumer spending probably caused by the Jan. 1 increase in Social Security payroll taxes affecting nearly all workers.

Nationwide, the average price of gas was $3.78 a gallon Thursday, according to the AAA, an increase of 47 cents a gallon in just the past month. Also, Wal-Mart, the nation's leading retailer, reported it expects sales to be flat for the February-April period compared with a year ago -- suggesting a slowdown in spending among low- to middle-income consumers.

Meanwhile, the White House continued its daily recital of horror stories from the looming spending cuts.

National parks, military programs and the jobs of FBI agents, firefighters, federal prosecutors and government researchers are all on the chopping block.

On Friday, Transportation Secretary Ray LaHood sounded the alarm, telling a White House briefing air traffic controllers would be among the first furloughed.

He predicted major flight delays and cancellations over "the next 30 days." A Republican, LaHood urged his former GOP House colleagues to help.

"This is not rocket science," he said.

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