McConnell: Sequester will happen

Senate Minority Leader Mitch McConnell (R-Ky.) said Tuesday that $85 billion in automatic spending cuts will likely go into effect on March 1 despite opposition in both parties.

President Obama has demanded that at least some of the cuts be turned off, but McConnell said Democrats and Republicans were unlikely to reach a last-minute deal.

“It is pretty clear to me that the sequester is going to go into effect,” he told reporters.

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McConnell in the past has worked with Vice President Biden to broker deals between the White House and congressional Republicans, but he indicated no interest in doing so to prevent the cuts.

“Read my lips: I am not interested in an eleventh-hour negotiation,” said McConnell, who acknowledged an “eerie similarity” to previous debates.

McConnell’s comments are the biggest sign yet that the $85 billion in cuts will not be avoided. Speaker John Boehner (R-Ohio) has likened the sequester to a “meat ax,” but argued House Republicans would not eradicate the cuts unless Obama agreed to meaningful spending reductions to replace them.

Some Republicans see the sequester as the only way left to impose cuts on Washington spending.

The president and Democrats have said any replacement bill should include both spending cuts and new taxes.

Senate Democrats are trying to unveil a replacement bill by Thursday. The bill is expected to include roughly $120 billion in deficit reduction, much of which would come from imposing the so-called “Buffett Rule” on the wealthy.

The Buffett Rule, named after investor and Obama ally Warren Buffett, would implement a tax rate of at least 30 percent on taxpayers making seven figures a year, and would be phased in for those making between $1 million and $2 million a year.

“The majority is going to offer a proposal. I anticipate that we will have an alternative proposal. That, however, doesn’t lead to a solution — that just leads to a couple of votes,” McConnell said.

Senate Majority Leader Harry Reid (D-Nev.) said Tuesday that votes would happen the last week of February, and that he would discuss the Democratic proposal with Boehner this week.

The majority leader stressed on Tuesday that the Democratic plan would be split evenly between spending cuts and revenue increases, and Democrats have made clear that they would use next week’s recess to sell their plan to constituents and put pressure on Republicans to back the plan.

Senate aides said Democrats see the measure as a way to blame Republicans if the spending cuts happen. Democrats would argue that Republicans refused to replace the cuts with new taxes on the wealthy.

Republicans contend it was the president’s idea to include the sequester in the 2011 deal to raise the debt ceiling, and that he has failed to provide a plan to replace the $85 billion in cuts set for March 1.

“We’re waiting for the president to tell us how he wants to avoid the sequester,” Senate Minority Whip John Cornyn (R-Texas) said Tuesday. “Hope springs eternal.”

McConnell said “the tax issue is over” following the January deal that raised tax rates on annual household incomes above $450,000 — a hike that was not coupled with spending cuts and represented a significant concession by Republicans. He noted that the 2011 debt deal setting up the sequester included no new taxes. The automatic spending cuts were to be implemented unless a supercommittee of lawmakers came up with a replacement deal by the end of 2011.

“I think we ought to keep the commitment we made,” the Kentucky Republican argued. “If the supercommittee failed, these reductions were made without raising taxes.”

Rank-and-file Democrats expect to be briefed Thursday on the Senate Democratic sequester-replacement proposal, which Reid, Finance Chairman Max Baucus (D-Mont.), Appropriations Chairwoman Barbara Mikulski (D-Md.) and Budget Chairwoman Patty Murray (D-Wash.) are all working on.

“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,” Reid told reporters on Tuesday.

In addition to the Buffett Rule, Democrats are discussing a variety of ways to reach the $120 billion in deficit reduction, including cutting farm subsidies known as direct payments.

Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) told The Hill that she is talking with leaders to ensure the sequester bill does not hurt her effort to pass a five-year farm bill.

It is not clear whether Democrats can bring all of their members behind new taxes. The party faces a tough electoral landscape in 2014, and could face internal opposition to the Buffett Rule or to scrapping tax breaks used by the oil-and-gas industry.

“My position is that no industry should be singled out to be punished because they are a legal, robust industry,” Sen. Mary Landrieu (D-La.), who is up for reelection in 2014, told reporters on Tuesday. “And so while I most certainly am supportive of a review for the whole tax code of all industries, I don’t see why the oil-and-gas industry should have to be ever singled out.”

Other Democrats, including Sen. Ben Cardin (D-Md.), have said that they would prefer to craft a package to undo the full $1.2 trillion sequester that is to be implemented over 10 years.

“I’m looking for the best answer that gives us two things: deficit reduction that does not kill the recovery,” said Senate Majority Whip Dick Durbin (D-Ill.). “And that’s the balance we’re trying to strike. And sequester is a heavy-handed approach to dealing with deficit reduction, and has very little thought being given to its impact on the economy.”

Sen. Mike Crapo (R-Idaho) said that conservatives wanted to keep the same amount of spending cuts, but that Republicans could be open to a measure that gives agencies more flexibility on how to implement the sequester.

“The same savings, I think, can be achieved in most budget arenas without the kind of damage to programs,” Crapo said.

Ben Geman contributed to this story.

— Published at 3:14 p.m. and updated at 8:34 p.m.