Friday, February 08, 2013

White House Warns That Budget Cuts Will Impact Nutrition Assistance And Food Inspections

Transcript of sequestration briefing...
Aides for President Obama on Friday launched a campaign designed to get the public active in demanding that Congress rapidly address deficit reduction issues.  Federal controller of the Office of Management and Budget Danny Werfel and Jason Furman, Principal Deputy director of NEC, joined Press Secretary Jay Carney at a White House briefing, and advised reporters that scheduled across-the-board cuts, known as sequestration, would cause low-income women and children and seniors to lose federal nutrition assistance, reduce food inspections from the Department of Agriculture and Food and Drug Administration, slash the FBI's ranks, and cause a dangerous reduction in defense outlays, among many other problems.

A $1.2 trillion across-the-board cut in government spending over 10 years will go into effect on March 1st unless Congress acts.

"I want to emphasize that the administration believes sequestration is bad policy that was never intended to be implemented," Werfel said. "Sequester is a blunt and indiscriminate instrument that poses a serious threat to our national security, domestic priorities and the economy."

"It does not represent a responsible way to achieve deficit reduction," he said.

Werfel said that if sequestration occurs, 600,000 women and children "would lose vital nutrition assistance."

"Not only would this reduce essential benefits that these families depend on, but it could cost at least 1,600 state and local jobs due to reduced federal funding," Werfel said. 

Programs that receive federal assistance, such as Meals on Wheels, would serve about 4 million fewer meals to seniors, noted a White House fact sheet.

“These meals contribute to the overall health and well-being of participating seniors, including those with chronic illnesses that are affected by diet, such as diabetes and heart disease, and frail seniors who are homebound. The meals can account for 50 percent or more of daily food for the majority of home‑delivered participants,” the White House said.

FDA and USDA would have to cut back on food inspections, Werfel said, with FDA eliminating 2,100 inspections at domestic and foreign food manufacturing plants.  USDA’s Food Safety and Inspection Service would have to furlough all employees for approximately two weeks.


“These reductions could increase the number and severity of safety incidents, and the public could suffer more foodborne illness, such as the recent salmonella in peanut butter outbreak and the E. coli illnesses linked to organic spinach, as well as cost the food and agriculture sector millions of dollars in lost production volume,” noted the White House fact sheet.

The full transcript of the briefing:

THE WHITE HOUSE
Office of the Press Secretary
__________________________
For Immediate Release
February 8, 2013                         

PRESS GAGGLE BY
BY PRESS SECRETARY JAY CARNEY,
DANNY WERFEL, FEDERAL CONTROLLER OF OMB,
AND JASON FURMAN, PRINCIPAL DEPUTY DIRECTOR OF NEC


James S. Brady Press Briefing Room

12:40 P.M. EST

     MR. CARNEY:  Thank you all for being here.  As I think we advised earlier today for this gaggle, I have with me Danny Werfel, Federal Controller for the Office of Management and Budget; as well as Jason Furman, Principal Deputy Director of the National Economic Council.  They’re here to discuss with you what would be the devastating impacts of the sequester if it is allowed to take effect, if Congress fails to do the responsible thing, which is to give itself the time and space it needs to pursue a broader budget that would achieve deficit reduction in a balanced way.
   
     So I will turn it over first to Danny Werfel and then to Jason.

     MR. WERFEL:  Thank you, Jay.  I know all of you have a paper that was provided that has information on the impacts of the sequester on the domestic side.  I want to take a moment and talk about how the across-the-board cuts under sequestration would operate and why they would be so harmful to our nation.

I want to emphasize that the administration believes sequestration is bad policy that was never intended to be implemented.  It was intended to drive both Democrats and Republicans in Congress to compromise.  Sequester is a blunt and indiscriminate instrument that poses a serious threat to our national security, domestic priorities, and the economy.  And it does not represent a responsible way to achieve deficit reduction.

As I think you’re all aware, the fiscal cliff deal included a fully paid-for two-month delay in sequestration, pushing the scheduled implementation date back to March 1st, which is now three weeks away.  The deal did lower the amount of the sequester cut for this year to $85 billion, but this is obviously still a very substantial amount.  And we now have a shortened timeframe for achieving the cut -- seven months.

OMB now calculates that sequestration will require an annual reduction of roughly 5 percent for nondefense programs and roughly 8 percent for defense programs.  However, given that these cuts must be achieved over only a seven-month period instead of a twelve-month period, the effective percentage reductions will be approximately 9 percent for nondefense programs and 13 percent for defense programs.  These are large and arbitrary cuts, and will have severe impacts across government.

On multiple occasions, the President has laid his plan for more than $4 trillion in balanced deficit reduction, and he has demonstrated his strong commitment and willingness to reach agreement on further balanced deficit reduction that avoids sequestration.  If we do not get an agreement to avoid the sequester, as I mentioned earlier, there would be significant and harmful consequences across the spectrum of both domestic and defense priorities.  And from the document that was provided, you can see that the cuts would cause very significant disruptions that would be felt far and wide across the country.

There has been in the public domain a lot of discussion to date about the impact that the sequester would have on the defense realm.  And let me be clear, those impacts would be severe and must not be allowed to occur.  As Secretary Panetta and General Dempsey have both said on numerous occasions, sequestration would create a serious crisis in military readiness and pose the risk of creating a hollow force by undercutting the essential services, equipment, and support our Armed Forces rely on.

     But the impacts on our domestic priorities as a nation would be just as severe.  Let me go through some of the examples.  Six hundred thousand women and children would lose vital nutrition assistance.  Not only would this reduce essential benefits that these families depend on, but it could cost at least 1,600 state and local jobs due to reduced federal funding.

Approximately 70,000 children would lose Head Start and Early Head Start services.  The National Institutes of Health and the National Science Foundation would have to significantly cut back or delay thousands of research grants and awards, setting back progress on research into life-threatening illnesses and costing tens of thousands of jobs for scientists and students.

The Food and Drug Administration and the Department of Agriculture would have to cut back on food inspections, leaving the country more vulnerable to public health risks due to foodborne illnesses.  The FBI would have to reduce its law enforcement capacity.  FEMA would have to eliminate funding for firefighters and other emergency personnel.  And the Justice Department would have to furlough hundreds of federal prosecutors.

     As you can see, in the list that we distributed there are more impacts that I do not cover here.  The list that you have has additional ones, and this is just the tip of the iceberg.  There are many, many other impacts that are not in the document.  The document just represents some of the ones that we’re highlighting.

     Across the government we’ll see assistance programs slashed; we’ll see contracts cut; we’ll see employees out of work.  And we’ll have no choice.  The blunt, irresponsible, and severe nature of sequestration means that we can’t plan our way out of these consequences or take steps to soften the blow.

     To reiterate, that’s why it is so critical that Congress acts swiftly to avoid these cuts through a balanced approach to further deficit reduction.  Instead of arbitrary, across-the-board cuts, we need to be carefully reducing the deficit in a way that protects the most vulnerable, protects critical priorities, creates jobs, and strengthens the middle class.

     Let me turn it over to Jason Furman who is going to talk through some additional issues from his perspective.

     MR. FURMAN:  Thank you.  And after the President’s experience with the cameramen Tuesday, I told Jay I’d only come back here if they weren’t here, so thank you for that.  (Laughter.)

     I just want to underscore some of Danny’s points and put a tiny bit of broader economic context around it.  Danny went through the programmatic consequences -- what this would mean for education, medical, research, public safety, and a whole range of things.  And those would all be very damaging and very severe.

The sequester would also have broader and very negative consequences for the economy as a whole.  And private forecasters, the Congressional Budget Office, and others have estimated that if the sequester hit you would lose hundreds of thousands of jobs as a result.  And we got a tiny bit of a preview of what that might look like in the fourth quarter GDP numbers, where GDP contracted because of a large contraction in defense spending that was, at least in part, due just to fears about the sequester before it even started to hit.

That type of contraction in the deficit, a very large and abrupt and immediate and poorly implemented one in 2013, is especially unnecessary because of the trajectory of what's happening to the deficit right now.  We've made enormous progress in bringing the deficit down over the last four years.  We are slated to make a lot of progress to bring the deficit down over the next couple of years.  The big challenge we have is over the medium and long terms.  Let me talk about that first part first, and then about the medium and long term.

The deficit this year is projected to be about 5 percent of GDP.  It's come down by nearly 5 percentage points in the last four years.  That’s the most rapid pace of deficit reduction the United States has seen since the end of World War II.  The reason we're seeing this is in part due to the recovery of the economy, but also in part because the President has already signed into law $2.5 trillion of deficit reduction, including $1.4 trillion of spending cuts through the continuing resolutions and Budget Control Act, and another $600 billion of revenue from high-income households in the tax agreement and then the associated intrasavings.

So that $2.5 trillion gets you more than halfway to the $4 trillion that you need to stabilize your debt over the long term, and it actually has been sufficient to be bringing your deficit down quite strongly over the short run.

What we do need, though, is a lot more medium- and long-term deficit reduction.  And that’s the second reason why it would be a real shame to just take the attitude that we should just let the sequester hit rather than doing something else; take the attitude that, oh, the sequester is spending cuts, we want spending cuts, let's just do it that way.  That’s not just programmatically damaging for the reasons that Danny outlined, it's not just macroeconomically damaging in terms of costing jobs, it also misses a really huge opportunity for this country -- one that I think Democrats and Republicans should be able to agree is a better approach than this type of blunt, mindless, bad-policy approach.

And that’s an approach that, one, the President came out and reiterated -- in fact, reiterated it twice in his remarks in this briefing room on Tuesday -- and that’s the type of big deal that still remains on the table, from his perspective.  And that’s a big deal that includes health savings that, in the tenth year, would match or exceed the savings in Bowles-Simpson and would grow more quickly over time.  So you would actually have more health savings than in the sequester, more health savings over the long term than in Bowles-Simpson.  That would include tax reform that could do something like on corporate tax rates, bring our rates down a lot and make our country more competitive.  And that's an approach that would also bring us more deficit reduction, amount of deficit reduction sufficient to bring down and ultimately stabilize our debt measured as a share of the economy.

     Of course, as the President said, there’s not time to do all of that in the next couple of weeks, first of all.  Second of all, there's been interest on a bipartisan basis in Congress in proceeding through budget resolutions in something more like regular order to bring this all about.  That's a process that takes time.

So what we're trying to do now is make sure that Congress can buy the time it needs in order to do this entitlement reform, tax reform that's a much better solution to our problems than letting the sequester hit, and doing that in a balanced way with a combination of revenue and spending that would buy you some time on the sequester.  The whole goal of buying that time is not for the sake of buying time; it's for the sake of buying time to do something that's a lot bigger and a lot better than the sequester in terms of entitlement reform, tax reform, stabilizing our deficit and ultimately the goal being creating jobs and economic growth.

     MR. CARNEY:  So if we could have questions for these two gentlemen.  And if we have a little time at the back, I'll be here for a few minutes after that.

     Questions?  Roger.

     Q    When you just said that you'd like to buy time on the sequester, you're saying postpone March 1st, but substitute what?

     MR. FURMAN:  A balanced combination of spending and revenue measures.  We have already had an example of this with the two-month delay that we did as part of the ATRA.  And we're talking about something like that.  I'm not saying another two months.  That's something Congress would need to work out the period.  Congress would need to work out -- 

     Q    Harry Reid said like three months or something.

     MR. FURMAN:  Congress really needs to work out the amount of time.  Congress needs to work out the amount of pay-fors.  Where we're coming from is that we'd want to see -- and I don't think you could pass the Senate without seeing something that has a balance of revenue and spending.  And we had a template for that in the ATRA.  And that's the type of thing we'd like to see going forward.

     I don't know the exact amount of time you'd need for a bigger budget agreement.  It doesn't appear that this Congress would be able to do that in the next three weeks, so we certainly need more time than that.

     Q    Does the White House have an offer?

     MR. FURMAN:  What?

     Q    Does the White House have an offer?

     MR. FURMAN:  Yes, we have -- the President said that his -- the offers that he made in December remain on the table.  So he has a plan on the table.

     Q    The numbers here, do they come from Treasury or OMB?  And how do you know that this sort of dire portrait that you paint of life under sequester will actually happen if the sequester goes through?

     MR. WERFEL:  The numbers actually come from the federal agencies that are responsible for carrying out the program.  So HHS, for example, helped analyze the situation and develop a Head Start assessment and so on.  And these are experts, programmatic experts.  They are constantly monitoring the manner in which federal dollars go into the field and how they're impacted, and they're evaluating what a very significant and sudden arbitrary cut would do.  And so we rely on the agencies to provide that expertise.

     Q    Could you talk about how this thing would be implemented?  Is it a cliff?  Is it a slope?  Do 800 women lose their nutrition on March 1st?  Or how does it work?

     MR. WERFEL:  So from a technical standpoint, what happens is that if we have to issue the sequester order and move into this phase on March 1st, essentially it cancels $85 billion in budgetary resources that agencies previously had available.  So they now have to get to the end of the fiscal year, across government, on a budget that now has $85 billion less than it once did.

     Now, agencies are going to have to carry out and get to the finish line in a way that's most effective to meet their mission.  And so, in some cases, I think you’ll see variation.  In some cases, you’ll see immediate impacts.  And in some cases, agencies will work out those changes to their programs and their structures over time.  So there’s no easy answer to say what the world is going to look like on March 2nd.  We just know that these impacts -- while not all of them immediate -- if we don't take action, they will take place.

     Q    Has the administration started to put any contingency plans in place?  And just to go back to the time issue again, is there a minimum length of time the President would accept, a couple of months -- three to six?

     MR. FURMAN:  I think on the time we said that's something we want Congress to work out.  And certainly three months [sic] isn’t enough time to come to the type of agreement we’d like to come to.

     MR. EARNEST:  Three weeks.

     MR. FURMAN:  Three weeks, sorry.  I’m sorry.  I meant three weeks is certainly not enough time.

     MR. WERFEL:  And on the contingency plan, remember sequester was scheduled to take place initially in January.  Prior to that, as there was uncertainty around a fiscal cliff deal, OMB was working with federal agencies on their planning activities, and obviously we’ve resumed that in anticipation of March 1st.  So agencies are working through exactly how they are going to execute under this very significant cut in their budgetary resources.  Those planning activities are ongoing.

     Q    Have agencies started to issue letters to employees warning of furlough and the like?  Or when will that start happening?

     MR. WERFEL:  So what happened as recently as last week is agency heads sent notices out to their broad base of employees kind of updating them on where things are in terms of sequester planning, and did in that message -- many of these agencies sent this type of message -- indicated that, unfortunately, in order to meet these budget cuts, that furloughs in many cases are a likely outcome in order to do this.  Now, that was in a broad way.

     Under the law, before an employee can be furloughed, they need a specific notice of their furlough with a specific amount of time.  In most cases, it’s 30 days, but it depends on a lot of different factors.  But as a general rule, a 30-day notice is typically what’s required.

I’m not aware of any specific notices that have been issued.  But if we go past this date, there’s certainly -- there’s no way to implement the sequester without significant furloughs of hundreds of thousands of federal employees.

Q    Do you have any more specific number on that?  How many employees and contract employees would be facing this?

MR. WERFEL:  At this point in time I don’t have a specific estimate.  I just know it’s high; it’s in the hundreds of thousands of employees, but I don’t have a specific estimate.

Q    And just -- can you give me an understanding of what the sequester -- how much it ties your hands -- I mean, the individual agencies.  Because some might say, well, why do you have to cut these crucial programs; couldn’t you find some ways elsewhere?  But does it really tie your hands as to where you can make those cuts?

MR. WERFEL:  It does.

Q    And how?

MR. WERFEL:  And if you’ll indulge me to be a little bit technical.  What happens is, OMB, we take this amount, this $85 billion that we have to cut, and we apply it to every account in government.  Every account has to be cut by a certain percentage.  It’s not like the agencies can move money amongst accounts.  But it’s even worse than that.  Even at the subaccount, there’s something called Program, Project and Activity, which exists within each account.  And the way the sequester law is written, is that even -- underneath the account, even at the Program, Project and Activity, they all need to be cut by that same percentage.

So, for example, FAA, they have to cut resources in a way that’s going to impact the air traffic controller workforce.  There’s no way to basically say, well, we’ll move -- we’ll try to take all the cuts in this area, like maintenance or custodial work.  It’s not possible to do that because the law is written with such stricture that the cuts have to be taken at such a granular level.  And that’s why when I say it’s across the board, indiscriminate --

Q    But if Congress can’t agree on substitute cuts, could they pass a provision saying that the agency would have more leeway; you would still need to cut the same percentage from each department or each agency, but you have more leeway and you don’t have to go into -- you don’t have to cut air traffic controllers for God’s sake?  You can cut something else?

MR. WERFEL:  I mean, we’ve looked at this question.  We don’t see a way in which you can cut $85 billion over a seven-month period and not have significantly harmful impacts to our priorities, both domestic and defense.

Q    Three quick questions.  Is there anything on this list you could live with cutting in a deal that would be worked out with Congress, or does everything here have to stay?  Question one.  Jason, for you -- if there is a two- or three-month continuous delay of the sequester, based on what you saw in the fourth quarter, do you believe there is an economic harm just associated with that two- or three-month process?  And lastly, looking at all this, do you regret that this White House suggested this in the first place?

MR. CARNEY:  I’ll take the last one.  (Laughter.)

MR. WERFEL:  I’m not involved in the specific negotiations and I think that’s details that Congress is going to need to be worked out.  I think what we’ve outlined here is impacts are extraordinarily troublesome.  I couldn’t pull one out and say, yes, the defense priorities, the domestic priorities, health, education -- it’s hard for me to isolate one of those and say this is something that we should tolerate.  But, again, that’s not really my decision.  There’ll be -- Congress needs to do its work and then ultimate decisions will be made.  And the President will make a decision on the best interests of the nation.

     MR. FURMAN:  Right now, Major, there’s two options on the table.  One is the sequester hits, and the second is there’s a short-term delay of the sequester.  There’s no question that economically that second option, a short-term delay of the sequester, would be far superior to the former.

     What would make that option even better is if American people and American businesses really appreciated that the reason you are doing that was in order to build time and space for something that was even better than either of those options, which was more medium- and long-term deficit reduction, reforming our entitlements, reforming our tax code, making ourselves more competitive, and permanently ending this fiscal cliff after fiscal cliff.  There’s no question that that’s better.

And part of what we’ve tried to convince people is, A, the short term is much better than nothing -- much, much better than nothing; and, B, the short term will be even better if people see it as momentum and movement towards continuing to solve our problems.

     MR. CARNEY:  The notion much propounded by the spin doctors on the Republican side that the sequester is somehow something that the White House or the President alone wanted or desired is a fanciful confection.  The fact of the matter is, as I think you all recall in the wake of the passage of the Budget Control Act, it was the Republicans, including the Republican Leader of the House, who celebrated it as getting 98 percent of what they wanted.

     The sequester was designed as a means of creating a trigger that would get us out of what was a terrible situation that was already doing enormous harm to our economy, which we now know, and that was the threat of default.  It was designed by Republicans and Democrats to be so onerous that it would never come into place because it would force and compel Congress to do something more responsible, which is reduce the deficit -- not through spending cuts alone -- but reduce the deficit by $1.2 trillion.

     Finally, I would note it was certainly our preference, the White House’s preference, the administration’s preference, even in the sequester process, that it would be -- that revenues would be part of sequester -- revenues as well as defense and nondefense cuts.  Republicans adamantly refused to go along with that proposition.  Had they not, we would be in certainly a different situation today than we are now.

     So I understand that it’s a convenient bit of spin but it’s also a lot of baloney. 

Q    But does he regret it anyway?  I mean, regardless of whose idea it was, does he now, looking at all of the consequences that are --

MR. CARNEY:  What he regrets is that we ever had a circumstance like this country was forced to contend with in the summer of 2011 that there was a certain amount of enthusiasm even within the Republican Party, especially within the House, for the prospect of the United States defaulting on its obligations for the first time in its history -- an enthusiasm that somehow was linked to a belief that it would help the Republican Party achieve ideological goals that the nation overwhelmingly rejected -- rejected then, rejected last year, rejected in the campaign, rejected at the end of the year when we had our fiscal cliff negotiation, and rejects today.

So that the President regrets.  He could not let the country default for the first time, and thus the sequester and the Budget Control Act and everything associated with it, including the super committee, was born.  The whole point in its design was that it would never come to pass.  If Republicans would go along with the simple proposition that the American people overwhelmingly support -- which is that we need a balanced approach to further deficit reduction -- we would have solved this already.

It has been, I think to their -- it's been their loss, in terms of public opinion, that they've refused to go along with this.  And it has been to the country's detriment, because we keep having to deal with these manufactured crises that are terrible for the economy, that hardly inspire confidence with the American people or globally in our capacity to deal with our fiscal challenges.

We need to return to normalcy when it comes to how we debate and decide these issues.  That’s why we need to -- failing a big deal now, we need to pass an extension, a short-term buy-down, to allow Congress to do what it seems to be inclined to do, which is to return a semblance of regular order and a budget process that hopefully will result in a final product that reflects the proposition of balance that is supported by the vast majority of the American people, by Republicans and Democrats across the country.  And that’s what the President hopes.

Q    To follow up on a previous question, what’s -- you laid out the two scenarios.  What is your best estimate of the hit to GDP if the sequester takes effect or if there’s that short-term uncertainty?

     MR. FURMAN:  We don't have an estimate.  Others, independent forecasters, CBO have done estimates.  And it’s important to put it in context, which is that we did solve the majority of the fiscal cliff at the end of December.  The largest item was what was going to happen on taxes, and then we also dealt with the SGR and unemployment insurance.

But there’s no question defense spending was the difference between a positive GDP number and a negative GDP number in the fourth quarter.  I’m not saying that it would be the difference between that again in the future, but there’s no question that this would make a big difference and, as I said, hundreds of thousands of jobs and a commensurate amount of GDP would be lost as a result relative to what otherwise would have happened.

     Q    Do you agree with CBO’s estimates on the impact of the sequester?

     MR. FURMAN:  We don't have a specific opinion on CBO’s, but they're never very far off in terms of something like this.  So maybe they're a little high, maybe a little too low.  Maybe you could argue one way or the other, but certainly, they and other forecasters are in the right ballpark in terms of hundreds of thousands of jobs and a significant impact on the economy.

     Q    Why defer to Congress?  I mean, this is almost certainly going to go down to February 28th, and the White House is going to have to engage then.  Why not now try to nip this in the bud and take the uncertainty off the table?

     MR. FURMAN:  Jay is welcome to add to this too, but the President is looking for the best way forward.  What we’ve heard from both Democrats and Republicans in Congress is an interest in doing something more like the regular order, something more like the budget process.  And this would buy them time to do precisely what both parties in Congress say is the best way to deal with all of this.

     I think if anyone here thought that inviting everyone up here this afternoon and locking them in a room would walk out with an agreement and solve this, of course, people would do whatever course it is.  But I’d say we’ve heard really from both parties that getting back, as I said, something more like regular order is the best way forward.  And the President is just trying to help foster that process which they’ve said is the best way to move this forward.

Q    If you buy several months here and you fail to reach the agreement in that period of time, do you then have an even shorter period of time to implement the same magnitude of cuts?

     MR. WERFEL:  Yes.  It would depend on the nature of the deal.  But I would imagine that we would be at a smaller size from the $85 billion and a smaller period of time to implement.  So the notion here is to delay these very severe impacts that I've described, so that you have time to work out a deal that can delay and avoid them more permanently.

     Q    But if you don't, you have then an even more serious problem?

     MR. WERFEL:  I don't know that you'd know that it's more serious, depending on how the numbers go with the dollar decrease and the months.  But you'd still have a serious issue.

     Q    Jason, you talked about replacing the sequester with something bigger and better.  Just to get straight the order of magnitude that you're talking about -- if $4 trillion over 10 years is the goal, $2.5 trillion have been done, does that mean you simply need to replace the $1.2 trillion in the sequester, add a couple of hundred billion more, and you're basically at the goal?

     MR. FURMAN:  Yes, that's what the President has said, that ideally what the next phase would be, would be about a trillion and a half.  That includes interest associated with it.  And when you said $1.2 trillion for the sequester, that also -- that number for the sequester is the programmatic cuts plus interest.  And that is the type of magnitude he'd like to do.  But again, it's not just the magnitude.  It's also the timing of it, the balance of it, and the fact that you're accomplishing it with real reforms rather than just crude across the board.

     Q    And is it your view that that trillion and a half should be 50/50 revenues and --

     MR. FURMAN:  The President just said it should be balanced.  In fact, the final offer he had on the table to Speaker Boehner was one that if you just did -- was 50/50 at the time.  And we've enacted about half of the tax portion of that and almost none of the spending portion of that.  And so on a going forward basis, it would have a different ratio than when he originally proposed it.

     Q    Danny, the way the law is written, if there's no deal on March 2nd, do you have to start making cuts right away?  Or can agencies sort of hope there will be a deal and just not -- and just delay making cuts?

     MR. WERFEL:  Well, I wouldn't advise that they rely on hope.  (Laughter.)  They need to execute plans that protect their mission.  But as I mentioned, the legal requirement would be that when we get to September 30th, the end of the fiscal year, they will have to across government have spent $85 billion less.  And every agency is going to have to approach that differently.

     And if we have the sequester order, we will be working with agencies to making sure that they're doing prudent things to meet that legal responsibility.  Unfortunately, as outlined, those prudent things will help protect their mission as much as possible.  But ultimately, their mission will be compromised for the reasons which I outlined earlier.

Q    In your view, what sort of impact are we looking at for U.S. government civilian operations overseas, aside from the military?

MR. WERFEL:  Well, I mean, there are -- we can work with the State Department and get you more specific answers as an example.  But there are civilian personnel, both at the Defense Department, at the State Department and other agencies around government that will be impacted.  Because, as I said, unless it's exempted -- and there are certain activities, for example, VA, is explicitly exempted -- unless it's exempted, you're taking a cut in every segment of the organization.  And to the extent the organization has an international presence, then they will be taking cuts in that way, too.

And so I think probably more prudent to defer your question, in terms of more specifics, to an agency like the State Department or the Pentagon so they can give you more color to that.

Q    To what degree would DOD be able to use transfer authority or reprogrammings to offset sequester and protect key programs and contracts?

MR. WERFEL:  So there is the -- one of the things that we've advised agencies, in terms of taking those prudent steps, is looking at ways in which they can manage through the sequester in the best possible way, again, under the guiding principle of protect mission first.  One of those tools they will have is a reprogram authority, where they can go back to Congress and potentially move money from account to account.

But we've looked at this very closely, and Secretary Panetta is going to say it much better than I can -- with all the tools that they have, that will not get them in any way, shape or form in a place where they can tolerate the sequester safely.

Q    It won't eliminate sequester, but do you think it will make a big difference in any way?

MR. WERFEL:  No, I do not think it will make a big difference.

Q    I'm just wondering if you've been able to calculate what kind of impact, just on certainty of this, has already had on the business community.

MR. FURMAN:  We don’t have a precise quantification of that.  And I would just give the same example I gave before, which is, I think most of the observers of the first fourth-quarter GDP number thought that one thing that played a role in that was uncertainty about future defense spending levels, which led to some -- appeared to have led to some reduction in defense spending then, which adversely affected GDP.

So we don’t know the magnitude, but we do know the sign.  And the sign is unambiguously negative.

     MR. CARNEY:  Last one for these guys.

     Q    Should we interpret the President's statement earlier this week where he says that any short-term bill should have revenue attached as a veto threat on a two- or three-month bill that was cuts only?  Because there are a lot of Republicans who think that the White House is effectively bluffing, and if they were presented with a two- or three-month cuts-only bill, that he would sign it.

     MR. CARNEY:  I mean, I would just point you to what the President said and what I have said, and that is that balance has to be part of our approach to deficit reduction.  And that applies to a short-term buy-down of the sequester, and it certainly applies to our approach to broader deficit reduction.

The President is extremely serious about this, because the consequences -- I mean, the alternative that you're suggesting and has been floated by Republican leaders is that you would ask the burden of further deficit reduction to be borne solely by seniors through significant proposed cuts in Medicare and Social Security and Medicaid; families who have children with disabilities; middle-class families who depend on other programs, and then say, but we will hold harmless wealthy individuals and corporations who enjoy substantial benefits through loopholes and other special interest aspects of our tax code.

That’s simply unacceptable to this President.  It's unacceptable, overwhelmingly, to the American people.  You would be saying that we can't ask folks who enjoy a benefit in the tax code for their corporate jets to give a little bit, but we should raise the eligibility age Medicare to 67.  That's a tough sell I think for anybody, even in some of the reddest of districts in this country.

     Q    But in a two- or three-month bill you could easily --

     MR. CARNEY:  Again, the President --

     Q    -- put more of the President’s own cuts in a package  --

     MR. CARNEY:  If you want to negotiate on behalf of the Congress on this, that would be great.  But the balance is essential.  It is essential because it’s the right way to go economically.  It’s the right way to go for the middle class, and it’s the way this President insists we move forward.

     Q    But, Jay, there’s no balance in the sequester -- I mean, there’s no revenue in the sequester.

     MR. CARNEY:  Let’s go back -- the mandate from Congress was to reduce the deficit by an additional $1.2 trillion.  There are a lot of folks in the Republican Party, as well as their supporters on op-ed pages, who have translated that to mean spending cuts only.  That is not what the law said.  And the President -- all I’m saying is the President says, and it is his position -- it is a position he held throughout this process -- that balance is how we’re going to approach it.

     And at different times -- and their positions as strategy go are ever-changing.  But at different times there have been embraces of, as a matter of general principle, Simpson-Bowles, for example.  But what Republicans never tell you is that they all opposed Simpson-Bowles.  Every Republican on the commission voted against it, including the Chairman of the Budget Committee -- Republican House member rather -- and they would never go along with either the revenues or the defense cuts that were in Simpson-Bowles.

So the fact of the matter is balance is the absolute right way to do this.  It’s the President’s position, and that's what it’s going to be.

     Thanks, guys.  I got about five more minutes.

     Q    Can you tell us about the storm -- what the President is doing to debrief --

     MR. CARNEY:  Yes, I can give you a little update on the storm.  We’re going to have week ahead later in the day.  I don't have it for you now.  I want to thank Danny and Jason for coming out here.

     FEMA is working closely with its partners, including the National Weather Service to monitor the developing winter storm in the Northeast.  FEMA’s regional offices in Boston and New York City are in contact with state emergency management counterparts.  FEMA’s National Watch Center here in Washington continues to monitor the situation and hold regular operational briefings with regional and federal partners as the severe winter weather advances and as impacts are felt throughout -- through the overnight hours into Saturday.

     The President will obviously be updated on this regularly.  FEMA liaisons are working directly with our state partners at state emergency operation centers in the Northeast states including Connecticut, Massachusetts, New Hampshire, New Jersey, New York -- both in Albany and New York City -- Rhode Island and Vermont.  These liaisons are in addition to the joint state and federal field office staff who are already in place to support ongoing disaster recovery efforts in Connecticut, New Jersey, New York, Rhode Island and Vermont.

I can refer you for more information -- at least to the American people in affected areas before and after storms -- to visit www.ready.gov.  But that's our update.

     Q    Has the President spoken to any of the governors or state officials in the affected areas?

     MR. CARNEY:  I don't have any conversations to read out to you.

Mark.

     Q    Jay, can we expect the sequester to be a large part of the State of the Union address?

     MR. CARNEY:  I have no previews to give to you on the State of the Union address.

     Q    Ever?  (Laughter.)

     MR. CARNEY:  I’ll give you one Wednesday.

     Ari.

     Q    Can you talk about the decision not to send arms to Syrian rebels?

     MR. CARNEY:  What question are you asking?

     Q    Why the White House overrode recommendations from others in the administration to arm Syrian rebels.

     MR. CARNEY:  Well, I am not going to get into internal deliberations about policy decisions of that nature, but I can tell you that, as the President and his national security team have looked at these issues, we have had to be very careful.  We don’t want any weapons to fall into the wrong hands and potentially further endanger the Syrian people, our ally, Israel, or the United States.  We also need to make sure that any support we are providing actually makes a difference in pressuring Assad.

I think it’s widely viewed that more weapons in Syria -- that a lack of weapons is not the problem in Syria right now.  Keep in mind that there is no shortage, as I just said, of weapons in Syria.  That’s why we’ve focused our efforts on helping the opposition to become stronger, more cohesive, and more organized.

Now, as a general principle, this is not the kind of thing around which there is one discussion.  We almost constantly or continually review what we’re doing with regards to Syria and that conversation continues.  But it is, of course, of paramount interest on this matter in particular that we not create a situation where weapons provided by the United States end up in the wrong hands and we thereby accidentally, if you will, create more danger for the United States, for the Syrian people, or for Israel.

     Anybody else?  Victoria.

     Q    Was the White House surprised that yesterday John Brennan would not say that waterboarding was torture when --

     MR. CARNEY:  I thought John Brennan did an excellent job yesterday.  I know that’s how people in this building feel.  He demonstrated the breadth and depth of his experience in the field of intelligence and counterterrorism.  He provided I think what has been called by others one of the most expansive discussions of some of the very serious matters that we have undertaken in our effort to fight al Qaeda.  And I think it was -- the public interest was greatly served by that hearing yesterday.

     Q    Were you surprised that he wouldn’t say that waterboarding was torture?

     MR. CARNEY:  I think John Brennan answered the questions in depth on a number of subjects, so I would just point you to the answers he gave.

     Anybody else?  One more.  Dan Lothian.

     Q    Why isn’t the President going to the funeral of the young girl in Chicago that the First Lady is going to?

     MR. CARNEY:  I think the First Lady is going to the funeral of a girl who was killed in Chicago.  So are, I believe, a few other officials from the administration.  I think that represents the feeling that the President and the First Lady both have about what happened to her and the tragedy that it represents both in real concrete terms to her family but also symbolically because of the tragedy of gun violence that our country has to deal with all too often.

     Thanks, guys.  We’ll have a week ahead for you later this afternoon.

                                       END                1:22 P.M. EST

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