Pentagon prepares to ask Congress for break from 'sequester'

By David Lawder and David Alexander

WASHINGTON (Reuters) - The Pentagon is preparing to ask Congress soon for more authority to shift funds to cope with automatic spending cuts, confronting lawmakers with another exception to the "sequester" just days after they gave a break to the flying public and the airline industry.

The request may be sent to the House of Representatives' Appropriations Committee as early as next week, a House Republican aide said on Wednesday.

The Pentagon won increased budget flexibility in March, but officials have told members of Congress they believe it was insufficient to cover shortfalls in training and operations.

The Defense Department move would follow closely the fix last week to ease airline flight delays caused by the temporary furloughs of air-traffic controllers by the Federal Aviation Administration.

The cuts, known as "sequestration," were originally hatched by Washington in 2011 as a way to force the White House and Congress to find an alternative budget deal rather than have spending cuts kick in automatically.

But policymakers failed to reach such a deal earlier this year and the cuts - totaling $109 billion for the current fiscal year - took effect on March 1.

Defense spending has taken the single biggest hit from the automatic cuts, with a $46 billion reduction through the September 30 end of the fiscal year.

One House aide said the request would cite a shortfall in war-fighting because of higher than expected costs of withdrawing from Afghanistan.

Pentagon officials paved the way for the move in testimony to congressional committees over the past few weeks in which they expressed worries about the sequester's impact on military readiness, particularly with tensions rising in Syria and Korea.

"With the events in the world today, with Korea, Syria, Iran, the continued fight in Afghanistan ... the discussion on readiness could not come at a more critical time," General John Campbell, Army vice chief of staff, told a U.S. Senate panel on April 17.

"The reality is that if sequestration continues as it is ... we risk becoming a hollow force," he added.

Members of Congress from states with a heavy military presence have been urging a shift of funds since the sequester took effect and might be hard-pressed to vote against it.

An April 18 bipartisan letter from Virginia senators and representatives urged Defense Secretary Chuck Hagel to move quickly to prevent furloughs and loss of pay for "thousands of Virginians."

'REPROGRAMMING'

The Defense Department is preparing the request to shift funds, said Lieutenant Colonel Elizabeth Robbins, a Pentagon spokeswoman, but has not "yet specified the timing or the amount" it wants to transfer, or "reprogram" in budget jargon.

Congress last week approved a similar request from the Justice Department to shift $313 million within its budget to avoid furloughing some 60,000 employees.

Robbins said it was not yet clear whether the Pentagon would submit several different reprogramming requests or one large omnibus-style request, but the budget shifts would be sought "soon."

The Pentagon was one of several government agencies that won some budget flexibility in a stop-gap government funding measure passed in late March.

That allowed more than $10 billion that was locked up in other accounts to be shifted to the Pentagon's operations and maintenance account, which funds training exercises and military readiness.

While that has helped, it did not make up for the deep budget cuts brought on by the sequester. The Army alone is facing about a $13 billion shortfall in training, operations and Afghanistan war costs, Army Secretary John McHugh and Army Chief of Staff General Ray Odierno told lawmakers last week.

(Editing by Fred Barbash and Peter Cooney)

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Arias judge denies motion to sequester jurors

PHOENIX (AP) — The judge in Jodi Arias' murder case on Thursday denied a defense motion to order jurors sequestered for the remainder of the trial during a bizarre week when one panelist was removed and videos emerged of Arias' parents telling authorities she has mental problems.

Defense attorney Kirk Nurmi sought the sequestration after noting the release of the footage and parts of Arias' journal to the media, explaining it could bias the jury.

"This case must be tried in the courtroom not in the media," Nurmi told the judge.

He said that despite daily admonitions from the judge to the jury not to follow media coverage of the trial, some on the panel are likely doing it anyway, calling it an "absolute fiction" to believe they are not.

Judge Sherry Stephens denied the motion then admonished the jury again on Thursday to avoid all media coverage of the trial.

The move comes during a week when one juror was removed from the panel for making statements the defense claimed called into question her impartiality.

In a statement to the media after her removal, the juror said she would not comment on the case until a verdict is reached. Her removal came just a few days after defense attorneys accused prosecutor Juan Martinez of misconduct by posing for photographs and signing autographs for fans outside court. The judge has not yet ruled in that matter.

Thursday's motion was just another twist in the murder trial that has captivated the nation with tales of lurid sex, lies and a bloody killing, playing out for the pubic via an unedited web feed from inside the courtroom.

Arias faces a possible death sentence if convicted of first-degree murder in the June 2008 killing of Travis Alexander in his suburban Phoenix home.

Authorities say she planned the attack on her lover in a jealous rage. Arias initially denied involvement then blamed it on two masked intruders. Two years after her arrest, she said it was self-defense.

Testimony has been ongoing for three months.

Later Thursday, psychotherapist Alyce LaViolette continued her testimony discussing Arias' relationship with the victim after spending several days explaining to jurors the traits of victims and abusers in generalities.

The defense witness, who spent more than 40 hours interviewing Arias, said the defendant and the victim appeared to be in a comfortable relationship and that Arias wasn't stalking him as some of Alexander's friends have indicated.

"It looks like a comfortable relationship where there's a lot of back and forth," LaViolette said.

She also explained again how battered women tend to minimize the abuse by their partners "or not talk about it at all."

Arias says Alexander was physically abusive and attacked her on the day of the killing, forcing her to fight for her life, yet no other evidence at trial has shown the victim was ever violent in the past. Arias says she was too ashamed to tell anyone.

In developments outside court, authorities released to the media videos of investigators questioning Arias' parents after her arrest in 2008.

Both of her parents told police they believed Arias has mental problems.

"Jodi has mental problems, Jodi would freak out all the time," Sandra Arias says on the tape. "I had quite a few of her friends call and tell me I needed to get her some help."

On the tape, William Arias says he had suggested that she might be bipolar.

The videos have not been admitted into evidence at the trial, and Arias' parents have not been called as witnesses.

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Foundation to Cover Sequester Cuts to Iraq, Afghanistan Scholarships

A Florida-based charity announced today that it will cover the funding cut from scholarships for children of military members who died fighting in the Iraq and Afghanistan wars because of sequestration.

ABC News reported Tuesday that scholarships were being cut by as much as $2,133.81 per recipient this year because of automatic budget cuts to the Department of Education included in the sequester legislation.

The Children of Fallen Patriots Foundation, a Jacksonville Beach organization that helps children of military members who perished while on active duty to finance their education, said it will use funding from private donations to cover the gap left by sequester cuts.

"We work with our children any way to find them all available funding and grants towards college," Executive Director John Coogan told ABC News today.

Coogan said the organization dedicates every dollar of donations to identifying children of the fallen, advising them on how best to find grants and scholarships for higher education, and covering whatever costs are left over.

The foundation is nonpartisan, but Coogan said the announcement about sequestration triggered an increased sense of responsibility to help out in this respect.

"I think, generally speaking, it's important for us to stay focused that the children of these fallen patriots aren't affected by policy disagreements," Coogan said.

The challenge for the organization is finding these children - be they infants or just reaching college age - so they can help. Coogan said the organization had already enrolled 1,800 children, but he estimated there were about 15,000 who had lost a parent in the line of duty.

"We're really looking to increase the number of children that we've identified so that we can be sure we're doing what we're supposed to be doing as an organization," Coogan said.

In speaking this afternoon, Coogan said the group had already begun the process of reaching out to families of those Marines killed in a training exercise in Nevada Tuesday.

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Harry Reid Commemorates Dead Marines, Calls for End to Sequester

Democrat Harry Reid commemorated the seven Marines killed in an explosion at Hawthorne Army Depot in his home state today, and called for an end to sequestration budget cuts at the Department of Defense.

The Marines were killed and at least seven others injured during a training exercise.

The Senate majority leader began his speech on the floor today expressing his condolences for those who died and their families, but soon turned to the sequester cuts.

"One of the things in sequester is we cut back in training and maintenance. That's the way sequester was written," the Nevada senator said. "It's just not appropriate, Mr. President, that our military can't train and do the maintenance necessary. These men and women were Marines who were training there in Hawthorne, and with the sequester, it's going to cut this stuff back."

"I just hope everyone understands the sacrifices made by our military," Reid added. "They are significant. Being away from home, away from families, away from their countries."

Reid said a 2014 budget that Senate Democrats are hoping to pass would allow the military some "flexibility" in its budgeting.

Reid later tweeted a video of his statements on the Senate floor.

My heart goes out to those injured and to Marines who lost their lives in an explosion near Hawthorne Army Depot bit.ly/149HU2B

— Senator Harry Reid (@SenatorReid) March 19, 2013

Reid did not indicate how exactly sequestration cuts could have been involved with the accident.

The Department of Defense has said on numerous occasions that sequester cuts hurt the military's readiness and capabilities.

Some Republicans have accused Democrats of inflating the effects of the sequester in order to make them as painful as possible.

Rep. Darrell Issa, R-Calif., accused the Obama administration of "touting" negative sequester effects today, some of which he said were "over the top."

"They've threatened thousands of teachers will get a pink slip, federal prosecutors would have to close cases and let criminals go; even programs like Meals on Wheels that provide our seniors with assistance would be cut; millions of seniors would lose this assistance - another claim; thousands of students - I think 70,000 they said - would lose access to Head Start programs. And I think I even saw the DHS secretary threaten long lines and delays at our airports because of TSA cutbacks," Issa said at a hearing of the House Oversight and Government Reform Committee. "Unfortunately, all of these statements I believe to be exaggerations."

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Sequester at Home: Uncertainty in DC Suburb Means Higher Taxes to Come

Residents of Virginia's most populous county should expect to see a bump in their property tax bill this year, thanks to economic uncertainty fostered by - you guessed it - Washington and the sequester, a county official said Thursday.

Fairfax County, a D.C. suburb ranked one of the top three richest counties in the country, depends on government contracts for much of its commercial revenue. As agencies are tightening their belts in some places and throwing their hands up on others trying to figure out how the $85 billion budget cuts will affect them, businesses lack the stability to expand, according to Braddock District Supervisor John Cook of Fairfax County.

County officials have named sequestration one of the factors shaping their plans for the coming year.

"The uncertainty about sequestration puts Fairfax in a particularly vulnerable economic situation," reads the county's most recent budget proposal for FY 2014. "The good news is that Fairfax County's General Fund only receives about 1 percent of its budget from the federal government and the County's total revenue stream is fairly resilient. The bad news is that residents and businesses within the County will also be impacted which in turn will impact growth and substantial recovery in the real estate market, consumer consumption and business expansion."

READ MORE: New Hampshire Businesses Look to Exports to Make Up for Budget Cuts

Cook, a Republican coming up on the four-year anniversary of his swearing-in in Fairfax, blamed the need for the tax increase on the federal government's lack of consensus on sequestration and the practice of passing continuing resolutions rather than yearlong budgets.

"The worst thing for a business is to not know what's coming, because a business will adjust to reality," Cook told ABC News Thursday. "If they knew what was coming - even if it wasn't good - they'd adjust to it and eventually we'd have growth, but we won't have growth until there's an answer."

READ MORE: Sequester to Bring Harm Beyond Staffing Cuts at Local, National Level

Yesterday the House of Representatives passed a continuing resolution to fund the government for the next six months. Cook insisted short-term stop-gap measures like these make planning his county's own budget more difficult.

"We have to set aside reserves, and we have to hold off on doing new things, because we don't know what's coming down the pipes," Cook said.

The current budget proposal institutes an extra 2 percent in property tax - going from $1.075 for every $100 of assessed property value to $1.095. The county estimates that will mean an extra $94 added to the average taxpayer's bill.

Fairfax County had the 37 th highest property taxes in the nation between 2005 and 2009, according to the Tax Foundation, with the median home paying about $4,371 in taxes on land. Two other Virginia counties outranked Fairfax, with most of the other counties located in New York, New Jersey or Illinois.

As a state, Virginia ranks 14 th in the nation for highest property taxes; the average locality took $1,427 per capita in property taxes in 2009. Americans paid almost $475 billion in property taxes between September 2011 and September 2012.

READ MORE: The Most Convoluted Sequestration Controversy Known to Man?

The bottom line for Cook was that loss of revenue does not just hurt residents in their wallet. As the board of supervisors finalizes the next draft of the budget between now and April, they're considering flattening education funding.

The county executive recommended raising funding to schools by two percent - a three percent cut from what they requested. But Cook said that number could drop to zero.

The Center on Budget and Policy Priorities estimates local education agencies in Virginia are already losing more than $11.6 million dollars in grants, plus another $14.395 million in special education grants to the state, almost half a million in pre-school grants and $999,000 in federal work study.

READ MORE: Sequester Snapshot - Student Loans

"What's the real world effect of this uncertainty in the economic environment? It's that our schools are not getting the money that they're looking for," Cook said.

Virginia Gov. Bob McDonnell signed an executive order March 1 with $45 million targeted to help localities.

"We are doing all we can on the state level to weather this difficult period," the Republican governor said in a statement emailed to ABC News. "Now, we need leadership in Washington so all states and all Americans can have certainty about the years ahead, and to get our nation's fiscal house in order."

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Obama signs order for "sequester" budget cuts

WASHINGTON (Reuters) - The United States lurched into a new budget crisis on Friday as President Barack Obama and Republicans failed to agree on stopping broad spending cuts that could dampen economic growth and curb military readiness.

Put in place during a bout of deficit-reduction fever in 2011, the automatic cuts can only be halted by a deal between Congress and the White House.

As expected, talks at the White House on Friday were fruitless, meaning that government agencies will now begin to hack a total of $85 billion from their budgets between Saturday and October 1. Financial markets in New York shrugged off the stalemate in Washington.

Democrats predict the cuts, known as "sequestration," could soon cause air-traffic chaos, delays in food safety inspections and less aid to the homeless as hundreds of thousands of federal employees are forced to take furloughs.

The nation's largest employer with a civilian workforce of 2.7 million people, the U.S. government begun notifying staff to prepare for reduced hours and slashed paychecks.

New U.S. Defense Secretary Chuck Hagel said the cuts, half of which will fall on the Pentagon, put at risk "all of our missions."

While the International Monetary Fund warned that the belt-tightening could slow U.S. economic growth by at least 0.5 of a percentage point this year, that is not a huge drag on an economy that is picking up steam.

Many Republicans accuse the administration of overstating the effects of the cuts in order to pressure them into agreeing on a solution to the White House's liking.

Obama said the damage to the economy was genuine.

"Not everyone will feel the pain of these cuts right away. The pain though will be real. Beginning this week, many middle-class families will have their lives disrupted in significant ways," he told journalists after meeting Republican and Democratic congressional leaders.

At the heart of Washington's persistent fiscal crises is disagreement over how to slash the budget deficit and the $16 trillion national debt, bloated over the years by wars in Iraq and Afghanistan and government stimulus for the ailing economy.

Obama wants to close the fiscal gap with spending cuts and tax hikes, but Republicans do not want to concede again on taxes after doing so in negotiations over the "fiscal cliff" at the New Year.

"The discussion about revenue, in my view, is over. It's about taking on the spending problem," House of Representatives Speaker John Boehner said on leaving the meeting.

The full brunt of the automatic cuts will be borne over seven months. Congress can stop them at any time if the two parties agree on how to do so.

The across-the-board cutbacks were mandated by a deficit reduction law, structured to be so disruptive that Congress would ultimately replace them with more targeted savings. But partisan gridlock in Washington has prevented agreement on where to save.

OBAMA TO SIGN ORDER

Obama will now issue an order to federal agencies on Friday night to reduce their budgets. The White House budget office must send a report to Congress detailing the spending cuts.

Notices of "intent to furlough" have gone to many of the unions representing government employees.

Some 115,000 employees of the Department of Justice -including prosecutors and the FBI - were among the first to get the official word of furloughs in notices that started going out last week but were made public on Friday.

The government also sent letters to several governors advising them of cuts to services like the Head Start education program in California and military facilities in Virginia.

Unlike previous fiscal dramas, the sequestration fight is not rattling Wall Street.

U.S. stocks rose moderately on Friday, with the Dow Industrials closing up 35 points, as data showed manufacturing expanded at its fastest pace in 20 months in February. Despite the market being up more than 7 percent this year, and near a record high, the discord in Washington has not prompted traders to cash in gains.

"Most of us believe that sequestration is not something that will make us fall off the cliff, since the cuts will be worked in relatively slowly," said Bill Stone, chief investment strategist at PNC Wealth Management in Philadelphia.

Canadian Finance Minister Jim Flaherty expressed rare public frustration with the United States for lurching from crisis to crisis.

Flaherty said he was confident Canada would not suffer too badly from the fiscal troubles its biggest trading partner is suffering from. "It is regrettable, though, that the U.S. continues to move from crisis to crisis in fiscal terms," he told reporters.

Another influential minister in Canada's Conservative government, House Leader Peter Van Loan, took a swipe at the United States, saying it was up to its ears in debt because of big-spending, left-wing policies.

One reason for the inaction in Washington is that both parties still hope the other will either be blamed by voters for the cuts or cave in before the worst effects predicted by Democrats come into effect.

A Reuters/Ipsos poll released on Friday showed 28 percent of Americans blamed congressional Republicans for the sequestration mess, 18 percent thought Obama was responsible and 4 percent blamed congressional Democrats. Thirty-seven percent blamed them all, according the online poll.

The non-partisan Congressional Budget Office predicts 750,000 jobs could be lost in 2013, and federal employees throughout the country are looking to trim their own costs.

"The kids won't go to the dentist, the kids might not go to the doctor, we won't be spending money in local restaurants, local movie theaters," said Paul O'Connor, president of the Metal Trades Council, which represents 2,500 workers at the Portsmouth Naval Shipyard in Kittery, Maine.

After weeks of White House warnings about the cuts causing disruption, Obama acknowledged it might be a while before effects fully kicked in.

"We will get through this. This is not going to be an apocalypse," Obama said.

In the absence of any deal at all, the Pentagon will be forced to slice 13 percent of its budget between now and September 30.

In his first Pentagon news conference since he was sworn in on Wednesday, Hagel struck a more moderate tone than many other defense officials who have said the spending reductions would be devastating or could turn the U.S. military into a second-rate power.

"America ... has the best fighting force, the most capable fighting force, the most powerful fighting force in the world," he said. "The management of this institution, starting with the Joint Chiefs, are not going to allow this capacity to erode."

Most non-defense programs, from NASA space exploration to federally backed education and law enforcement, face a 9 percent reduction.

Moving to head off a new budget crisis later this month, Boehner said the Republican-led House would move a "continuing resolution" to fund government through the rest of the fiscal year, thus hopefully averting a government shutdown.

(Additional reporting by Steve Holland, Roberta Rampton, Deborah Zabarenko and Jeff Mason in Washington and David Ljunggren in Ottawa; Editing by Peter Cooney)

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