Budget-and-tax Impasse Threatens Troops, Economy

"Two years ago, the president said that stopping the tax hike was the right thing to do for our economy," said House Speaker John Boehner, R-Ohio. "Well, economic growth is worse now, but he's out campaigning for a tax hike on small businesses."

The vote came as gridlock and partisan disputes ensured that pressing issues remain unresolved.

For example, with half the country suffering from the worst drought in decade, it was uncertain whether Congress would pass a disaster relief program. A long-term farm bill was highly unlikely.

And the U.S. Postal Service was defaulting at midnight Wednesday on a $5.5 billion payment due to the Treasury for future postal retirees' health benefits because of congressional inaction.

Legislation on trade, cybersecurity and defense policy weren't getting finished either in the final week before Congress breaks for its five-week vacation.

The divisive politics and recriminations that marked last August's fight over cutting the deficit and raising the nation's budget authority was on full display in the typically bipartisan House Armed Services Committee hearing with Zients and a senior Pentagon official.

Obama and congressional Republicans agreed last summer to $1.2 trillion in spending cuts and tasked a bipartisan congressional panel with coming up with another round of reductions. If it failed, automatic cuts known as sequester would kick in.

All committee members and the two witnesses agreed that sequester was a destructive policy. But none could agree on a solution in a hearing that degenerated into finger-pointing over who was responsible ⿿ Obama or Congress ⿿ even though Republicans and Democrats voted for the bill and the president signed it.

In the run-up to this year's election, Republicans are using the impending reductions in military spending as a political cudgel against Obama, arguing that the commander in chief is willing to risk the nation's security as he uses the leverage in the budget showdown with Congress. Republican presidential candidate Mitt Romney has echoed GOP lawmakers' criticism.

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