Wolin: Spending Cuts Would Hurt U.S. Expansion

The across-the-board government spending cuts, known as sequestration and set to kick in March 1, would threaten U.S. economic expansion and must be avoided, Acting Treasury Secretary Neal Wolin said.

“What we cannot do -- what would be a grave and unnecessary mistake -- is to deliberately throw sand in the gears of our recovery,” Wolin said in written remarks prepared for delivery to the Chicago Council on Global Affairs today. “Congress must replace these arbitrary and across-the-board cuts before they cause serious harm to the middle class and to our economy.”

While President Barack Obama and congressional Republicans are trading blame for the impasse on the automatic cuts, neither side is expecting an agreement that would allow the U.S. to avert $85 billion of spending cuts in the final seven months of this fiscal year and $1.2 trillion over the next nine years.

Wolin has been acting as the head of the Treasury Department since Timothy F. Geithner left last month. The Senate plans to vote on Jack Lew, Obama’s nominee as Geithner’s successor, this week, Senate Majority Leader Harry Reid, a Democrat from Nevada, said today.