As Blame Game Continues, the Threat of Sequester Looks Almost Reality

Even as President Obama in his opening State of the Union remarks on Tuesday said that sequester is a “bad idea” for the U.S. economy ,reiterating his demand for combination of taxes  and spending cuts in order  to avert $85 billion annual across-the-board budgets cuts, Republicans are almost certain that sequester will come into effect from March 1.

“Democrats, Republicans, business leaders, and economists have already said that these cuts, known here in Washington as ‘the sequester,’ are a really bad idea,” said the President in his annual address to the nation on Tuesday.

He said “some in this congress” were only in favor of preventing spending cuts on defense areas by letting bigger cuts on areas like education and job training, Medicare and Social Security benefits.

Meanwhile Senate Minority Leader Mitch McConnell (R-Ky.) on Tuesday ruled out any possibility of reaching an eleventh hour deal with Democrats, which would help preventing the looming threat of sequester.

Blaming Democrats for the policy impasse, McConnell virtually made it clear that the U.S. economy was likely to go through deep spending cuts both on defense and non-defense areas from March 1.

While addressing to press reporters on Capitol Hill, McConnell said, “It’s pretty clear to me that sequester is going to go into effect. I see no evidence that the House plans to act on this matter before the end of the month.”

McConnell said that Republicans will be offering a counterproposal to sequester replacement bill which is likely to presented by Democrats this week; however, he also added that there is very little hope for any progress as both sides will are expected to stock to their demands.

“The majority is going to offer a proposal I anticipate that we will have an alternative proposal, that however doesn’t lead to a solution … it just leads to a cover vote,” added McConnell.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.