This time around, there won’t be a Joe-and-Mitch Show to save the day.
Senate Minority Leader Mitch McConnell (R-Ky.), in his bleakest comments yet about averting automatic spending cuts March 1, said that he has not heard from Vice President Biden, his chief negotiating partner in three recent tax-and-budget compromises and he has little interest in trying to re-create the hectic last-minute deals that the two have crafted since December 2010.
“It’s pretty clear to me that the sequester is going to go into effect,” McConnell told reporters after Tuesday’s weekly Senate policy luncheons, adding later: “Read my lips: I’m not interested in an 11th-hour negotiation.”
McConnell’s dour assessment was the latest bleak comment by a senior Washington official about averting roughly $85 billion in cuts to federal agency budgets this year, as mandated by the 2011 Budget Control Act that allowed Treasury to continue borrowing to fund government operations. In exchange for an increased debt ceiling, Congress and President Obama agreed to $2.1 trillion in spending cuts and other savings. The first $900 billion of that came in agreements to lower the expected spending outlays for agencies, and the next $1.2 trillion would come from an across-the-board slashing of budgets and reduced interest payments on the debt.
In their latest last-minute deal, Biden and McConnell hatched a New Year’s Day compromise extending most of the Bush-era tax cuts and delaying the onset of the sequester’s mandated spending cuts until March 1. The cuts are to be drawn equally from national security and domestic agencies.
Senate Democrats are drafting a plan that would delay those automatic spending cuts for several months by offsetting them with $120 billion in savings drawn by instituting the “Buffet rule,” which would most likely guarantee that millionaires would pay at least 30 percent in income taxes, after revelations a year ago that Warren Buffet’s secretary paid a higher marginal tax rate than the billionaire investor.
The plan would also include closing loopholes for oil and gas production, as well as some smaller version of cuts to the military budget and agriculture subsidies. “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,” Majority Leader Harry M. Reid (D-Nev.) told reporters after exiting the Democratic huddle.
Republicans, however, reject adding new tax revenue to the mix of potential savings to avert the sequester. They say that the August 2011 BCA met their premise of lifting the debt ceiling in exchange for a similar dollar level of spending cuts, not tax increases, and that replacing those cuts now with higher taxes would violate that deal. Additionally, the New Year’s Day deal averting the “fiscal cliff” allowed for higher taxes on family income of more than $450,000 — something Republicans considered a political gift to Obama for his reelection on a campaign pledge to raise taxes on the wealthy.
McConnell dismissed Reid’s plan as something that “doesn’t lead to a solution” and only leads to a pair of competing proposals from the two Senate leaders, in the final week of February, both of which are expected to fail to reach 60 votes.
Even though McConnell is unlikely to meet with Biden, Senate Majority Leader Harry M. Reid (D-Nev.) told reporters Tuesday that he is scheduled to meet later this week with House Speaker John A. Boehner (R-Ohio) to discuss the possibility of a last-minute agreement.
Ed O’Keefe contributed to this report.