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Secretary of State Kerry warns against deep budget cuts

By Paul Eckert

WASHINGTON (Reuters) - Automatic government spending cuts set to take effect next month would undermine U.S. diplomacy and security policies at a time of turmoil across the Middle East and Africa, Secretary of State John Kerry told Congress on Thursday.

Across-the-board cuts, known as "sequestration," set to begin on March 1, would take $2.6 billion out of the budget for the State Department and USAID, America's development assistance agency, Kerry said.

"Cuts of this magnitude would seriously impair our ability to execute our vital missions of national security, diplomacy and development," he wrote in a letter to Senator Barbara Mikulski, chairwoman of Senate Committee on Appropriations.

The warning from Kerry, who took over from predecessor Hillary Clinton 10 days ago, follows similarly stark alerts from Pentagon chief Leon Panetta and other Obama administration officials over cuts that will take place unless lawmakers and President Barack Obama reach an agreement to stop them.

The worst of the planned cuts might not come into force, as lawmakers try to find ways to avoid severe cost reductions.

Democrats in the Senate on Thursday rallied around a $110 billion tax increase and spending cut plan that would postpone the sequestration cuts. The proposal is expected to be shot down by Republicans, but some of its components could be included in future budget negotiations.

Sequestration would cut $200 million from humanitarian assistance, more than $400 million for global health funds to fight AIDS and child deaths, and more than $500 million in security assistance, Kerry said in his letter, dated February 11 and made public on Thursday.

The security assistance cuts could include $300 million in the Foreign Military Financing program and "lead to reductions in military assistance to Israel, Jordan and Egypt, undermining our commitment to their security at such a volatile time," wrote Kerry.

"This cut will be felt at home, resulting in a loss of sales to U.S. industry and a potential loss of U.S. jobs," he added.

Additional job losses would occur as budget cuts force the slower processing of visas for foreign tourists and business visitors, Kerry said.

The cuts would total about $85 billion this year across the entire U.S. budget. With a deal to avoid them looking less and less likely, administration officials are rallying to warn of the pain that will be imposed on various programs.

Kerry also said cuts would impair efforts to beef up security at U.S. diplomatic facilities, a sensitive issue after the attack by armed militants on the U.S. mission in the Libyan city of Benghazi. U.S. Ambassador Christopher Stevens and three other Americans were killed in that attack.

Americans living or traveling abroad would also feel the pinch, Kerry warned, as cuts "constrain our ability to assist U.S. citizens overseas, often at their darkest times."

(Reporting by Paul Eckert; Editing by Stacey Joyce)

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