Obama tells shipyard workers jobs on line if Republicans veto tax deal

Piling further pressure on Republicans to agree a deal to avert looming spending cuts, President Barack Obama told workers at a navy shipyard in Virginia their jobs would be “in jeopardy” if the cuts proceed.

Mr Obama chose Newport News in Virginia, a state next to Washington DC that absorbs a tenth of US military spending, to warn about the threat to local jobs and the economy if congressional Republicans do not agree to a deal involving tax increases to avoid the so-called “sequester” of automatic spending cuts.

Ripple effect

The president said that 90,000 people would be forced to take unpaid leave if the domestic and defence spending cuts go ahead, starting with $85 billion this year of about $1.2 trillion over the next decade. This would have a “ripple effect” across other businesses in Virginia if the cuts start kicking in from Friday, he said.

“All told, the sequester could cost tens of thousands of jobs right here in Virginia,” he said at the Newport News Shipbuilding which employs 21,000 people and where the country’s naval aircraft carriers are built.

The White House has ramped up pressure on Republicans in an attempt to force them into negotiations and concede tax increases by warning of the effects of the sequester ahead of the March 1st deadline.

Republicans have accused Mr Obama of trying to scare Americans about the effect of the automatic cuts and said that his political stunts would not help resolve the country’s fiscal difficulties. Mr Obama warned yesterday the sequester would lead to longer delays at airports, fewer cancer screenings and flu vaccinations and that federal prosecutors would have to close cases and let criminals go.

The New York Times reported that federal immigration officials have released hundreds of detainees from immigration detention centres in an effort to save money ahead of the budget cuts.

The president said that he was willing to negotiate to reach a compromise with Republicans but that finding a solution to avoid the “self-inflicted” wound of the sequester rested with Congress.

“There are too many Republicans in Congress right now who refused to compromise even an inch when it comes to closing tax loopholes and ending deductions. That’s what is holding things up right now,” he said.

Republicans are refusing to budge, saying that they already agreed to tax increases of $600 billion on the richest Americans in the eleventh-hour compromise agreed to avert the fiscal cliff at the end of last year and that there would be no more.

John Boehner, the Republican majority leader of the House of Representatives, said that the president’s visit to Virginia was more about scoring political points than reaching a deal on the sequester. He claimed that the House had already passed two Bills to replace the sequester and that it was now up to the Senate.

“We should not have to move a third Bill before the Senate gets off their ass and begins to do something – the House has done its job,” he said.

The White House has said that defence programmes would have to be reduced by 13 per cent, which would stall work on navy ships, and non-defence spending by 9 per cent if spending cuts came into effect.