WASHINGTON Feb 3 The top U.S. Senate Democrat
said on Sunday tax revenue must be part of any deal to replace
looming automatic spending cuts, despite Republican warnings
that they will not buckle over this issue after conceding on tax
rises for the rich a month ago.
In separate remarks, U.S. Defense Secretary Leon Panetta
also took aim at the $85 billion in across-the-board spending
cuts, known as the sequester, which bite on March 1 unless
Congress takes action, and warned they would harm U.S. security.
Senate Majority Leader Harry Reid said the American people
backed his party in the argument over tax increases and spending
cuts, singling out tax breaks for oil companies and corporate
jets as examples of loopholes he would close.
"The American people are on our side. The American people
don't believe in these austere things. We believe that the rich
should contribute," he told ABC News program "This Week With
The March 1 cuts are a holdover from a 2011 budget deal to
lift the U.S. debt limit and deliver $1.2 trillion in spending
cuts. These were meant to be so painful that Congress would
ultimately replace them with other budget savings.
Economists and several bipartisan congressional commissions
say these must include a mixture of reforms to the tax code and
so-called entitlement spending on social security, and Medicare
and Medicaid health programs for poor and older Americans.
But bitterly divided lawmakers have so-far failed to agree a
plan, threatening across-the-board cuts that could dent a
fragile U.S. economic recovery, and efforts to lower lofty U.S.
unemployment that rose 0.1 percentage point to 7.9 percent in
Democratic President Barack Obama won re-election in
November in a campaign built solidly on his argument that richer
Americans should pay more in taxes to help lower U.S. deficits
He won the first round of that debate when Republicans
allowed taxes to rise for American families earning more than
$450,000 a year, in order to preserve tax cuts for everyone else
that would otherwise have expired on Jan. 1. Reid said that
Democrats would continue to make that case.
"We believe we should fill those tax loopholes - get rid of
them, I should say. And that's where we need to go," Reid said.
"And I've got a pretty good fan base for that: the American
people. Republicans, Democrats, and Independents."
Panetta, the outgoing secretary of defense and himself a
Democrat, told NBC's "Meet the Press" that the automatic
spending cuts would be deeply harmful.
"If sequester happens, it is gonna badly damage the
readiness of the United States of America," he said. "We are
gonna weaken the United States and make it much more difficult
for us to respond to the crises in the world."