White House blames contracting economy on GOP brinkmanship

White House blames contracting economy on GOP brinkmanship

Washington : DC : USA | Jan 31, 2013 at 1:15 AM PST
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The White House on Wednesday said that Republicans' "political brinkmanship" is part of the reason the US economy has seen a shrink for the first time in four years.

While the unexpected decline in the GDP is seen temporary, White House spokesman Jay Carney said that threats to let defense cuts take place without a bigger budget deal can further hurt the already shrinking economy as well as the taxpayers.

"This is political brinkmanship with one primary victim, and that is American taxpayers and the American middle class," Carney said at a briefing. "Our economy is facing a major headwind ... and that's Republicans in Congress."

Carney’s comments come after House Budget Committee Chairman Paul Ryan (R-Wis.) said in an interview on Sunday that if the automatic spending cuts go into effect, it will be the fault of the Democrats because they have not left any other option open.

Carney also highlighted Speaker John Boehner's remarks about having the spending cuts in his back pocket to be used as a bargaining tool during the budget negotiations with the White House. Carney said Republicans should not think of it as a game, but take it rather seriously.

"The American people—those who pay attention to this issue in detail—are rightly appalled by those kind of tactics that, you know, do harm to their lives, do harm to the economy in the name of ... achieving some political objectives here in Washington."

The automatic spending cuts, known as sequester, were avoided last year, but the problem remains and must be addressed in a few months' time. The temporary truce over the fiscal cliff will soon be over once debates on spending cuts and the debt ceiling begin again.

Pointing out to the 0.1 percent decline in the economic output in the last quarter of 2012, the first such decline since the 2009 recession, Carney said that uncertainty over the government’s fiscal plans can hurt the economy even more.

"The GDP number we saw today was driven in part by, in large part by a sharp decrease in defense spending," he said. "And at least some of that has to do with the uncertainty created by the prospect of sequester."

However, despite White House concerns, economists unanimously believe that while the headline number is a bit jarring, the underlying details of the GDP growth report show that economy is probably growing at a decent two basis point, and the plunge is only temporary.

Wendy Zachary is based in Texas, Texas, United States of America, and is a Reporter on Allvoices.
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