Obama: No long-term deal on sequestration

President Obama, speaking with a group of what the White House characterized as middle class Americans arrayed on a stage behind him, announced Monday afternoon that a deal to prevent a series of tax hikes from going into effect at the beginning of the New Year was "within sight." But that deal, the president indicated, did not include a bargain to stop automatic cuts in discretionary federal spending from going into effect.

"We're still going to have some work to do," Obama said. That work, he added, would include addressing the prospect of automatic spending cuts, known as sequestration. 

Sequestration would impose cuts of 9.4 percent in nonexempt defense discretionary funding in fiscal 2013 and 8.2 percent in nonexempt, nondefense discretionary funding. Obama said that would involve cuts in everything from Defense Department programs to Head Start.

"We're using an ax instead of a scalpel" with the sequester cuts, Obama said. "That's a piece of business that still has to be taken care of."

It's possible that a last-minute fiscal cliff agreement could include language delaying sequestration for several months or a year. But more tax revenues "have to be part of the equation in turning off the sequester," the president said.

"If Republicans think we will finish the job of deficit reduction through spending cuts alone ... [and] shove spending cuts at us...they've got another thing coming," Obama said. "That is not how this is going to work."