Two Parties Map Strategy on Automatic Budget Cuts
Congressional Democrats, sensing a shift in
political momentum, said Wednesday that they were closing in on
legislation to temporarily head off deep across-the-board spending cuts,
convinced that once federal furloughs and layoffs begin next month,
political pressure on Republicans to accept more tax increases will
become irresistible.
At a
closed-door retreat in Annapolis, Md., this week, Senate Democratic
leaders struck a populist tone, urging the party to stand its ground in
the battle over nearly $1 trillion in military and domestic cuts over 10
years, set to begin March 1. Democrats want a temporary reprieve from
those cuts, financed by a mix of spending cuts and tax loophole closings
that they believe will rally public support.
A
presentation by Senator Patty Murray of Washington, who spoke along
with Senators Max Baucus of Montana and Barbara Mikulski of Maryland,
ran through the huge income gains of the richest 1 percent, amid rising
poverty and stagnating middle-class incomes.
"Democrats need to keep fighting," Ms. Murray, the Senate Budget Committee chairwoman, concluded.
Representative
Chris Van Hollen of Maryland, the ranking Democrat on the House Budget
Committee, said, "Republicans ultimately have to choose whether they are
more interested in protecting tax breaks for Big Oil and other special
interests, or protecting defense spending and the economy."
Republican
leaders are no less firm that the cuts — known as sequestration — will
come into force in three weeks unless Democrats agree to equivalent
spending cuts elsewhere in the budget, without tax increases.
"At
some point, Washington has to deal with its spending problem," Speaker
John A. Boehner of Ohio said Wednesday, his voice rising in frustration.
"Now I've watched them kick this can down the road for 22 years since
I've been here. I've had enough of it. It's time to act."
With
the clock ticking and President Obama calling for some action, both
parties are showing some cracks in their resolve. Some Republicans with
large military installations in their districts said they could support a
postponement in the military cuts while negotiations continued on a
broader deficit reduction plan. Fearing for Hill Air Force Base,
Representative Rob Bishop, Republican of Utah, did not rule out
supporting a Senate bill that closes tax loopholes and pares spending to
stave off the cuts.
"It would depend on what the details are," he said.
The
Republican leaders of the Senate and House Armed Services Committees
proposed Wednesday to cancel the military cuts for 2013 by roping off
savings from a 10 percent cut in the federal work force over the next
decade. Representative Howard P. McKeon of California, the chairman of
the House Armed Services Committee, met on Tuesday with the commandant
of the Marine Corps, General James F. Amos, who told him that he could
maintain Marine Corps readiness this year, but that training and
equipping Marines would drop off sharply in 2014 if the cuts went
forward.
"These cuts are very harmful to the Department of Defense, especially to the Marine Corps," Mr. McKeon said.
House
Democrats produced legislation that would stave off the cuts through
Sept. 30 by ending direct subsidy payments to agriculture businesses,
eliminating tax breaks for oil and gas companies, and establishing a
minimum 30 percent effective tax rate on annual income over $1 million.
Senate Democrats hope to produce a similar plan by the end of next week,
aides at the Senate retreat said.
The
targets include poll-tested, time-honored marks like limiting tax
incentives for oil and gas exploration, "carried interest" that allows
private equity titans to pay a low 20 percent capital gains rate on much
of their income, and tax deductions for the cost of moving business
functions overseas.
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