With Congress out of session next week, due to the Presidents’ Day holiday, it looks inevitable that the sequestration cuts will take effect March 1st. Replacing the $85 billion in cuts scheduled through the rest of the fiscal year isn’t necessarily difficult itself, but Republicans and Democrats are deeply divided over whether or not increased revenues should be used to off-set the cuts. Democrats insist that some portion of the cuts be replaced with new tax hikes.
A Senate Democrat plan unveiled Thursday would replace most of the $85 billion spending cut, with $55 billion in new taxes. Their plan comes just over a month after Congress raised taxes by around $60 billion a year as part of the “fiscal cliff” deal. The GOP is adamant that new taxes can’t be part of any deal to avoid sequestration.
The sequester was first proposed by the Obama White House during the debt ceiling talks in 2011. It provided for mandatory across-the-board cuts to discretionary programs, with the Defense Department bearing around half the cuts. Full sequestration would trim $1.2 trillion in spending over the next decade. The cuts take effect unless Congress approves an equivalent amount of deficit reduction.