It is now only a matter of days before the US government will be forced to slash $85 billion from the federal budget.

The president is warning about the impact of the massive automatic budget cut, which is due to take place on Friday unless Democrats and Republicans can reach a new deal.

The US president went to Newport News, Virginia, home to major military bases, ports and shipbuilders likely to be hit with layoffs and delayed projects.

"This work, along with hundreds of thousands of jobs are currently in jeopardy because of politics in Washington. In a few days, Congress might allow a series of immediate, painful, arbitrary budget cuts to take place, known in Washington as the sequester," Barack Obama said.

"These cuts are wrong. They're not smart, they're not fair."

Barack Obama says the effects will be felt far beyond the military, painting a grim picture of an implications for a country still pulling itself out of the economic doldrums.

"If the sequester goes into effect, more than 2,000 college students would lose their financial aid," he added.

"Across the country, these cuts will force federal prosecutors to close cases and potentially let criminals go. Air traffic controllers and airport security will see cutbacks and that could cause delays at airports across the country."

In Washington, Republicans such as Cathy McMorris Rodgers urged the president to get off the campaign trail and show some leadership.

"He's travelled over 5,000 miles the last two weeks and we challenge him - Mr President, travel a mile and a half up here to Capitol Hill, sit down with Harry Reid and urge the Senate Democrats to take action," she said.

"The president says that this is a bad idea, but yet he has not put forward an alternative idea."

The problem is the same one that has constantly dogged budget negotiations - to rein in the deficit, the president is insisting on a mix of spending cuts and new revenue from ending tax breaks for the wealthy and corporations, whereas Republicans oppose any tax hikes.

Fed concerns

Giving evidence at a congressional hearing, the Federal Reserve's chairman Ben Bernanke encouraged politicians to avoid sharp spending cuts.

"The CBO [Congressional Budget Office] estimates that it would cost about 0.6 per cent of growth in this year and the equivalent of about 750,000 jobs, and so it would be a drag on near term economic recovery," he warned.

"So, in that respect, I think an appropriate balance would be to introduce these cuts more gradually and to compensate with larger and more sustained cuts in the longer run to address our long run fiscal issues."

When Barack Obama first agreed that these automatic spending cuts would kick in unless the two parties reached a deal on more targeted measures, he thought the spectre of dramatic cuts to the Defence Department would be enough to bring Republicans to a compromise.

However, that is looking increasingly like a miscalculation - within the Republican party, those determined to reduce the size of government seem to be winning out over those who have traditionally seen a robust military as sacrosanct.

Americans are hearing remarks like this one from the Republican senator Pat Toomey.

"I just have to strongly disagree with the notion that we have some kind of severe austerity program that's about to kick in," he said.

"We have a federal government that's doubled in size in the last ten years - 100 per cent growth in total spending. So we're talking less than 1.3 per cent of federal spending and outlays that would be curbed.

"The fact is if the sequestration fully goes into effect in fiscal year 2013 the federal government will spend more money than in did in 2012. It's hard for me to understand that as draconian spending cuts and austerity."

As the deadline looms, there is plenty of posturing, plenty of press conferences, but there are no late night meetings to hammer out a deal, no planned meetings at all between the president and congressional leaders for the rest of the week.

 

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