* McConnell wants no replay of "fiscal cliff"-style talks
* Senate Budget chair wants phased-in approach to aid
By David Lawder
WASHINGTON, Feb 12 The U.S. Senate's top
Republican predicted on Tuesday that automatic spending cuts
will take effect on March 1 as scheduled.
Senate Minority Leader Mitch McConnell said he did not
expect some last-minute deal to materialize that would avert the
cuts, known in budget jargon as a "sequester."
"Read my lips: I'm not interested in an 11th-hour
negotiation," McConnell told reporters.
"It's pretty clear to me that the sequester's going to go
into effect," McConnell said. "I have seen no evidence that the
House plans to act on this matter before the end of the month."
The across-the-board cuts were set in motion in August 2011
as part of a deficit-reduction deal between Republicans and
They were supposed to be so draconian that Congress would be
inspired to replace them with more thoughtful ways of reducing
the budget deficit.
But Republicans and Democrats have been unable to agree on a
substitute for the sequester.
The cuts will be split evenly between military programs and
domestic discretionary spending, with the first seven months'
worth coming to about $85 billion if Congress fails to act
before March 1.
Republican House Speaker John Boehner has declined to
reintroduce legislation passed by the House last year that would
shift the cuts from the military to other domestic programs,
such as the Medicaid healthcare program for the poor.
Instead, he has simply pinned blame for the looming cuts on
President Barack Obama and his fellow Democrats.
U.S. Defense Department officials warned lawmakers on
Tuesday that the military portion of these cuts will erode U.S.
war fighting capability, force the furloughing of some 800,000
civilian employees for 22 days, and slash ship and aircraft
Democrats on Thursday will unveil a $120 billion plan that
replaces the cuts for 10 months, half with increased tax revenue
and half with more targeted cuts.
Aides have said in recent days that the plan would include
reductions in farm subsidies, a higher minimum tax rate for
income over $1 million, and an end to tax breaks for oil
companies and corporate jets.
"The bills being drafted will include equal amounts of
revenue and cuts, because Democrats believe the right way to
reduce the deficit is to target waste and abuse by pairing smart
spending cuts with closing tax loopholes, asking the wealthiest
Americans to contribute more," Senate Majority Leader Harry Reid
McConnell made clear that Republicans would not accept any
new tax increases after agreeing to swallow a tax hike on family
income above $450,000 in the Jan. 1 fiscal cliff deal.
"The tax issue's over. The president got his taxes at the
end of the year, not because people voted for it, but because
operation of law sent taxes up for Americans who make more than
$400,000 or $450,000 per couple.
Separately, the new chairwoman of the Senate Budget
Committee, Patty Murray, said Tuesday that any replacement for
the automatic spending cuts should be phased in gradually to
give the economy some breathing space.
"I believe our focus should be on jobs and the economy, not
on arbitrary pain for American families," Murray said at a
hearing of her committee.
Doug Elmendorf, director of the Congressional Budget Office,
told the hearing that a delay of the fiscal tightening caused by
the automatic budget cuts through Dec. 31 would add about 0.6
percentage point to gross domestic product growth this year,
which would allow an extra 750,000 jobs to be created.
CBO last week issued new forecasts that GDP growth would be
held back to about 1.4 percent by the fourth quarter, with the
unemployment rate ticking slightly higher, if the cuts were
allowed to proceed.