Obama signs order for budget cuts

Washington: US President Barack Obama has signed an order that starts putting into effect across-the-board budget cuts known as the “sequester” after he and congressional leaders failed to find an alternative budget plan.
Huge spending cuts will start to hit the US starting Saturday after President Barack Obama and congressional Republicans failed to find a compromise budget. Obama signed an order authorizing the cuts Friday night, officially enacting the across-the-board reductions.
With the series of automatic spending cuts, Democrats and Republicans are playing a game of political chicken, with neither party willing to compromise in the latest round of America’s 18-month-old fiscal drama. A last-ditch round of talks between President Barack Obama and congressional leaders ended without a breakthrough. After the talks Obama described the cuts that now have gone into effect as “dumb” and “arbitrary” and warned of the negative impact on the economy and jobs.
The $85 billion (65 billion euros) in across-the-board cuts for fiscal year 2013, called sequestration, will equally impact both defense and social spending. Another $1.2 trillion of austerity will then set in over the next decade. Designed originally as a strategy to intimidate hyper-partisan members of Congress into a compromise on taxes and spending, sequestration was never actually supposed to become reality.