Threat of spending cuts a sign of Washington's political impasse

Fresh from a debt ceiling showdown and end-of-year fiscal cliff brinkmanship, US President Barack Obama and Republicans are now locked in a test of wills over huge budget cuts due to come into force in a matter of days.

The White House and independent analysts fear the so-called sequester could cost hundreds of thousands of jobs and crimp already slow economic growth. There is little hope in Washington that it can be averted.

The sequester, a multibillion-dollar package of spending cuts, was designed never to come into force. It is a measure of the political estrangement in Washington that it looks certain to do so. The idea was that the cuts would be so devastating to domestic spending favoured by Democrats and defence spending beloved of Republicans that they would have no choice but to reach a deal to cut the deficit .

But no deal is done and prospects of a last-minute agreement seem slim. So on March 1, cuts that will slash defence spending by US$55 billion and non-defence discretionary spending by US$27 billion this year look set to come into force.

"Republicans in Congress face a simple choice," Obama said on Tuesday. "Are they willing to compromise to protect vital investments in education and health care and national security and all the jobs that depend on them? Or would they rather put hundreds of thousands of jobs and our entire economy at risk just to protect a few special-interest tax loopholes to benefit only the wealthiest Americans and biggest corporations?"

Speaking for the Republicans, Speaker John Boehner shot back: "The president offered no credible plan that can pass Congress - only more calls for higher taxes." Obama's desire for more tax revenue was "a dead issue".