Obama: $85bn budget cuts mean unemployment will rise Barack Obama alongside defence secretary Chuck Hagel and transport secretary Ray LaHood. Photograph: Mandel Ngan/AFP/Getty Images Barack Obama warned at the first meeting of his second-term cabinet on Monday that the $85bn in forced spending cuts will mean difficult budget decisions in the weeks ahead and that unemployment will end up being higher than it needs to be. Details of the areas to be cut will be rolled out over the next few weeks, but already the Obama administration is claiming that cancellations in overtime for aviation staff is leading to long queues for travellers. The Pentagon has cancelled the deployment of a carrier group to the Gulf despite continuing tensions with Iran. With no sign of Republicans looking to compromise on the $85bn sequester and the cuts beginning to take on an air of permanence, the White House described it as "an empty victory" for the Republican party. The Republicans are downplaying the impact of the cuts ordered by Obama on Friday after failure of Republicans and Democrats to look seriously for a deal. They describe the cuts as modest, whereas Obama and the White House are predicting the impact will be severe. Obama, addressing a cabinet that included new members Treasury secretary Jack Lew and defence secretary Chuck Hagel, said: "Obviously, we're going to be spending some time talking about the potential impact of the sequester on all the agencies and missions across the board. It is an area of deep concern and I think everybody knows where I stand on this issue. We are going to manage it as best we can, try to minimise the impacts on American families, but it's not the right way for us to go about deficit reduction. The president added: "We're going to do our best to make sure that our agencies have the support they need to try to make some very difficult decisions, understanding that there are going to be families and communities that are hurt, and that this will slow our growth. It will mean lower employment in the United States than otherwise would have been. Earlier, at the daily White House briefing, press spokesman Jay Carney said the cuts hit hard areas the Republicans normally seek to protect, namely the Pentagon and border security. Carney said he was surprised that Republicans were claiming the $85bn as a win. He hoped that they would come to see it as an "empty victory" and realise that their goals of high defence spending and border protection were not being achieved. "So not only are regular Americans folks suffering from this, but their objectives are being unmet," Carney said. The secretary for homeland security Janet Napolitano, speaking at a Politico meeting, said: "Now that we are having to reduce or eliminate basically overtime both for TSA (Transport Security Administration) and for customs, now that we have instituted a hiring freeze ... we will begin today sending out furlough notices." She said airports are seeing lines at some airports "150 to 200% as long as we would normally expect."