Obama says spending cuts will be ‘slow grind’ on economy

Economic Improvement

“A couple economic data points are reminding the market that the sequestration is an issue, it’s an issue that was known, but the underlying fundamental data continued to improve slightly,” Andres Garcia-Amaya, New York-based global market strategist at JPMorgan Chase & Co.’s mutual funds unit, which oversees $400 billion in assets, said in a phone interview.

Both sides continued arguing their cases after the White House meeting ended. The speaker’s office said in a statement that Boehner told Obama in the meeting that Democrats should produce a plan to replace the spending cuts “that can actually pass” the Senate.

Obama said he’s offering a “fair deal” on the budget and one that has the support of the majority of Americans. The Republican alternative plan would impose “even worse arbitrary cuts” to the budget and that wouldn’t help the economy.

With the spending cuts “the economy will not grow as quickly as it would, unemployment will not go down as quickly as it would have,” he said.

Negotiating Position

Obama said he can’t lock both parties in a negotiating session until a deal is struck.

“I am not a dictator; I’m the president,” Obama said. If McConnell and Boehner want to leave town without a deal, “I can’t have Secret Service block the doorway.”

After he and his Cabinet officers have used the past week to warn of the impact from the cuts, including flight delays, curtailed border crossings for goods and fewer meat inspectors, Obama sought to moderate the alarms.

“We will get through this,” he said. “This is not going to be an apocalypse.”

The showdown is occurring amid signs the economy is on solid footing.

Manufacturing in the U.S. expanded at a faster pace than forecast in February, reaching the highest level since June 2011, the Institute for Supply Management’s factory index showed today. The Thomson Reuters/University of Michigan final index of consumer sentiment climbed to 77.6 last month from 73.8 in January, which may indicate a boost in consumer spending.

Bloomberg News

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