Key senator says he thinks U.S. will avoid "fiscal cliff" cuts

NEW YORK Tue Oct 23, 2012 6:09pm EDT

Former Virginia Governor and 2008 Democratic candidate for U.S. Senator from Virginia Mark Warner delivers the keynote address at the 2008 Democratic National Convention in Denver, Colorado, August 26, 2008. REUTERS/Shannon Stapleton

Former Virginia Governor and 2008 Democratic candidate for U.S. Senator from Virginia Mark Warner delivers the keynote address at the 2008 Democratic National Convention in Denver, Colorado, August 26, 2008.

Credit: Reuters/Shannon Stapleton

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NEW YORK (Reuters) - A senator pushing to find a solution to automatic, across-the-board government spending cuts at the beginning of next year said on Tuesday he believes the so-called "sequestration" will ultimately be avoided.

"I do believe that we will avoid sequestration," said Mark Warner, a Democratic senator from Virginia.

He and Republican Senator Saxby Chambliss are leading the "Gang of Eight" talks aimed at avoiding the spending cuts embedded in the so-called fiscal cliff on January 1. The cliff, which lawmakers have little time to avoid, includes big spending cuts and tax increases that in combination are expected to push the United States into recession.

The pair were speaking at a financial markets conference in New York a day after President Barack Obama caught Capitol Hill by surprise when he said that automatic spending cuts "will not happen," in his third and final debate with Republican challenger Mitt Romney.

"This was certainly news to us," Chambliss said of Obama's comment. "I can tell you it sent waves around Washington."

The chances of a comprehensive legislative solution to the cliff problem before January 1 are considered slight and members of Congress have been looking for some temporary fix to buy time once a new Congress and a new or re-elected president are sworn in in January.

The Gang of Eight senators want to put Congress in a position to deal with sequestration in the 30 days or so that it will have between the November 6 election and the end of the year, Chambliss told the conference hosted by the Securities Industry and Financial Markets Association.

"I wish we could walk in here and tell you that we have a silver bullet," he said. "But it is going to be a very tough political slugfest in that period of time."

The spending cuts and tax hikes could take an estimated $600 billion out of the U.S. economy and push it into recession next year, according to the non-partisan Congressional Budget Office.

The spending cuts were mandated by Congress as part of a deal to raise the debt ceiling for federal borrowing last year. At the time, the assumption was that they would be replaced in a more deliberative way by a super-committee, which failed in its efforts.

Warner and Chambliss have been working on a bipartisan solution for more than two years. In recent months, the uncertainty has spooked financial markets.

"This is a challenge ... that is going to require both sides," Warner said. "It's going to require extra revenues, it's going to require entitlement (cuts)."

Simply putting off the hard decisions on spending would be a mistake, he added. "I think a complete punt would be awful."

(Editing by Eric Walsh)

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Comments (3)
Raelyn wrote:
When Romney threatened to unfund Big Bird, he lost my vote. Two things are sacred to mothers and most women — PBS and Planned Parenthood — America needs them both!

Oct 23, 2012 4:59pm EDT  --  Report as abuse
BATTMAN wrote:
55 years ago when I had to leave high school in the 9th grade, I didn’t have a clue about Wall Street.
After picking up a GED and night school at the University of Houston on the GI Bill,I made a 44 year career as a Power Lineman. I learned watching other try to retire on Social Security, that investing in what I knew would pay off. I am not a millionaire, but I don’t have many worries.
I invested in American Invester owned Power Companies, with not one dime off shore. I never received one dime of the dividends, just reinvested.
I look at Romney’s corporate raiding and company stripping and I wouldn’t vote for him if my life depended on it. While he was backing the Vietnam war while touring France, I was using pig Latin French in Vietnam.
I am sorry, I am on a rant. Some years I paid off Social Security and Medicare just like the big boys do. It required a lot of over time. If that money had not be stolen by Congress, to balance the budget, Social Security would not be in the shape it is now. When I hear the likes of Romney/Ryan want to voucher my Medicare, I want to go absolutely POSTAL. There should have never been a ceiling on Social Security or Medicare. There has never been a ceiling on collecting by the ones that hit the ceiling pay in limit.
Thank You for listening to an old vet, that might be voting in his last presidential election. I will vote for Obama/Biden. Michelle and Jill has done more in four years to help the families of deployed veteran’s than any previous presidents, vice presidents or Congresses wifes. Bless them.
One last thing. In reading my post, please forgive the mistakes. While getting my GED I found that I not only liked math, I was in the top 5% placement in the US, but when it come to the three R’s I was some what lacking. Good Night Mrs Calabash where every you are CHA CHA CHA. That was my Jimmy Durante impersonation Pretty good huh?

Oct 23, 2012 10:20pm EDT  --  Report as abuse
CMEBARK wrote:
You pretty much summed it up for a lot of us BATTMAN. If people want to see what the Republicans stand for today, READ THEIR PLATFORM and educate yourself.

Oct 24, 2012 5:54pm EDT  --  Report as abuse
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