Senate rejects rival bills to prevent $85B sequester spending cuts

The Senate on Thursday rejected rival proposals to stop the sequester, ensuring the $85 billion in automatic spending cuts will begin on Friday.

A bill crafted by Senate Democrats won 51 votes, while a Republican alternative won only 38 votes. Three Democrats — Sens. Mary Landrieu (La.), Mark Pryor (Ark.) and Kay Hagan (N.C.), who are all up for reelection in 2014 — voted against their party's bill, which fell 51-49.

Senate Majority Leader Harry Reid (D-Nev.) also switched his vote to "no," a procedural move that would allow him to bring the bill to the floor in the future. 

Both plans needed 60 votes to advance, and as expected, neither came close to meeting that threshold.

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Democrats did appear more unified than Republicans, who suffered 8 defections because of concerns that their legislation did too little to shield the military from deep cuts. 

Sens. Mark Warner (Va.) and Max Baucus (Mont.) were the only Democrats who voted for the GOP bill. GOP Sens. John McCain (Ariz.), Mike Lee (Utah), Rand Paul (Ky.), Kelly Ayotte (N.H.), Ted Cruz (Texas), Lindsey Graham (S.C.), Dean Heller (Nev.), Marco Rubio (Fla.) and Susan Collins (Maine) voted against the GOP bill, which failed 38-62.

Congressional leaders say there is no Plan B and that the sequester, as the cuts are known in Washington, will be phased in over the next seven months. Hopes that a government-funding measure could become a vehicle to avert some of the cuts have also faded.

If Congress fails to freeze the cuts, a total of $110 billion in spending reductions to domestic discretionary and defense programs will have been implemented in the fiscal year that began last October and ends on Sept. 30.

The Congressional Budget Office estimates the cuts could cost 750,000 jobs this year.

Following the votes, President Obama said Senate Republicans voted “to let the entire burden of deficit reduction fall squarely on the middle class.

“Today, Republicans in the Senate faced a choice about how to grow our economy and reduce our deficit. And instead of closing a single tax loophole that benefits the well-off and well-connected, they chose to cut vital services for children, seniors, our men and women in uniform and their families,” Obama said in a statement.

Obama will meet with congressional leaders from both parties and chambers on Friday at the White House to discuss the next steps for addressing the sequester.

Senate GOP Leader Mitch McConnell (Ky.) said he will tell Obama in blunt terms that Republicans will not accept additional tax increases after voting for a $620 billion tax hike on New Year’s Day.

“Look: the American people will simply not accept replacing spending cuts agreed to by both parties with tax hikes. And I plan to make all of this clear to the president when I meet with him tomorrow,” McConnell said.

Speaker John Boehner (R-Ohio) says the House will not pass a sequester replacement until the Senate acts.

“Republicans have voted twice to replace the president’s sequester with smarter spending cuts and reforms. But the president and Democrat leaders have failed to pass a solution of their own. It’s time that they do,” he said at a press conference Thursday. “My message at the White House will be the same as what I’m telling you today: It’s time for them to do their job and to pass a bill.”

It’s unclear what Congress will do next to attempt to stop the automatic cuts. Lawmakers and aides said the sequester could last well beyond the end of March.

The Democratic bill to replace the sequester would have reduced spending by $55 billion and raised taxes by $55 billion. Most of the tax revenues would have come from phasing in a 30 percent effective tax rate on incomes between $1 million and $5 million. Adjusted gross incomes above $5 million would have been taxed at a 30 percent effective rate. The bill cut agricultural subsidies by $27.5 billion and defense by the same amount.

The Republican alternative sponsored by Sens. Pat Toomey (R-Pa.) and James Inhofe (R-Okla.) would have given the president more flexibility to manage the cuts and limited the impact on national security. It would have allowed Obama to shift cuts slated for defense programs to other areas and explicitly prohibited tax or fee increases.

Republicans opposed to the bill, including defense hawks and the party’s top appropriator, said it would do too little to protect defense programs and would give too much of Congress’s authority to Obama.

Ayotte, an ally of McCain, a vocal opponent of defense cuts, circulated a plan to limit the reduction in military spending. She asked for a vote on her bill as well, but the Senate majority leader said he would only allow one if Republicans agreed to lower the threshold for passing any of the three sequester alternatives to 50 votes, a move that would have allowed the Democratic bill to clear the Senate.

McConnell rejected Reid’s condition.

Reid accused Republicans of wanting the sequester to go forward and said there would not be any agreement to replace it until Republicans give ground on tax revenues.

“The Republicans want the sequester to go forward,” he said. “We cannot solve the problems of this country with cuts, cuts, cuts. We’ve cut $2.6 trillion. We need to do more but we’re going to do it in a balanced approach. We cannot continue to hurt the middle class and the poor.”

Some lawmakers think the expiration of government funding on March 27 will give them another opportunity to turn off the sequester.

Senate Appropriations Committee Chairwoman Barbara Mikulski (D-Md.) said that is her hope but that there are no specific plans to pair a sequester replacement with an omnibus spending bill or continuing resolution.

“I would hope it to be but there’s no plan,” Mikulski said when asked whether an omnibus or continuing resolution could be the vehicle for stopping the sequester.

Sen. Charles Schumer (D-N.Y.) said Senate Democrats will propose deficit-reduction measures to replace the sequester when they bring a budget resolution to the floor next month.

“The debate’s only beginning. In the coming weeks under [Budget Committee] Chairman [Patty] Murray’s [(D-Wash.)] leadership we’ll consider a budget that will keep these issues front and center,” said Schumer. “The budget even more than the debate over sequestration will show the contrast in the two sides’ approach.”

Murray said her budget plan would include a proposal for stopping the sequester.

—Ramsey Cox and Erik Wasson contributed to this report.

This report was last updated at 7:49 p.m.