"Austerity," which in reality makes economies worse, is a tool by the leeches at the top to force everybody else to pay for their screw-ups when in fact these leeches should have gone to prison and had their assets seized for tanking the economy.
Deficit reduction is not a requirement of any previous legislation, but a political mandate from the financial aristocracy, which is demanding that its two political parties take joint action to make working people pay for a fiscal crisis that is the product of the 2008 Wall Street crash and the trillions expended to bail out the banks and corporations.
That the deadline is January 1, 2013 is politically revealing. In each of the bipartisan agreements between the Obama White House and congressional Republicans and Democrats—in December 2010, August 2011 and February 2012—the two parties acted deliberately to push back the decision until after the November 2012 elections, in order to prevent the American people from having any say on the measures to be enacted.
Given Obama's tendency to asskiss the GOP in his delusional quest to become a "transformative" president, he can't be trusted to do the right thing by the American people.