Debt ceiling closing in

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By Marysol Guzman |Staff Writer|

With only a few weeks before automatic federal spending cuts occur, President Barack Obama presented alternative ways to innovate the fiscal plan.

The fiscal plan was scheduled to take effect on Jan. 1 but was extended to March 1 of this year.
At a press conference last Tuesday, Obama proposed a new package that included different spending cuts, tax increases and tax reforms.

Obama said the sequester (larger cuts) will only weaken the economy and possibly even slow down the attempt to recover the country.

“We can’t just cut our way up to prosperity. It hasn’t worked in the past and it wont work today,” said Obama.
Obama made it clear that the country should invest on things we can’t afford to live without: “Investments on education, infrastructure, research and development,” said Obama.

Once the sequester takes effect, the National Institutes of Health to the Department of Education will be affected immensely, causing the spending of financial aid to be cut up to 8.2 percent.

Student, Frank Ram, receives financial aid to attend school, however his view on the issue has a different standpoint.

“As much as I love financial aid, [since] it makes it possible for me to come to school, we can’t just tax our way out of this problem. I think its kind of naive to think that taxing and spending our way out of a deficit is going to work,” said Ram. “Sooner or later our debt will catch up to us.”

Ram stated that cuts are necessary because intelligent cuts can be made by looking at the budget.
If Congress does not act, the sequester will automatically cut $89 billion from federal budgets in 2013 alone.

These automatic federal spending cuts will continue for the next decade until $1.2 trillion worth of cuts is reached.

The current fiscal plan will enforce furloughs to Defense Department civilian employees as early as spring and will continue for the next six months.

This will eventually accumulate to a 20 percent pay cut for these individuals since one work day will be cut per week.

Defense Secretary Leon E. Panetta claimed the cuts that will take place will reduce operations from the American Naval.

Prior to March 2012, there were two aircraft carriers in the Persian Gulf, but such cuts will now delay the deployment of a second aircraft carrier leaving only one near the coastline of Iran.

Up to 350,000 jobs in the military side would also be directly eliminated.

On NBC’s “Meet the Press,” Panetta said that if the sequester happens, then the readiness of the United States will be badly damaged.

“We have the most powerful military force on the face of the earth right now,” said Panetta. “If sequester goes into effect, we would have to do the kind of cuts that would go right at readiness, right at maintenance, right at training, we are going to weaken the United States and make it much more difficult for us to respond to the crises [of] the world.”

Congress has yet to reach a consensus.

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