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“To be clear, we stand ready to work with you to identify and enact common-sense savings necessary to replace the January 2013 sequester,” the letter continued. “Rather than proposing to simply put more space between this problem and the election or offering tax increase proposals that face bipartisan Congressional opposition, we hope you instead work with us to find a bipartisan solution before the [Sept. 30] end of the fiscal year.”
Democrats and the president have said Republicans need to accept the cuts or broker a deficit-reduction deal that includes tax increases, a position that hasn’t changed since their negotiations on the super committee. Democrats believe that their message calling for the wealthy to pay more in taxes strikes a chord with middle-class voters, and in some cases, polling has backed them up.
In a letter last week to the House Armed Services Committee, Senate Majority Leader Harry Reid (D-Nev.) underscored the Democrats’ position, which also includes extending the 2001 and 2003 Bush-era tax cuts only to households making less than $250,000 a year.
The purpose of the sequester “was to force the hard choices necessary to address our nation’s long-term fiscal challenges in a balanced and fair manner,” Reid said.
“Unfortunately, so far, Republican leaders have refused to make the difficult decisions necessary for a compromise,” he continued. “Instead, Mitt Romney and the congressional GOP leadership have fallen in line behind Grover Norquist, the radical lobbyist who opposes closing even the most outrageous corporate loopholes to reduce the deficit. In fact, not only has the GOP leadership refused to ask special interests, millionaires and billionaires to pay their fair share, now they are demanding even more budget-busting tax breaks for those who need them least.” (Norquist heads the conservative Americans for Tax Reform.)
“Sequestration was designed to overcome such ideological extremism,” Reid said. “And I am convinced that, in time, it will.”
Still, some Members are involved in discussions to find an agreement on replacing the sequester for fiscal 2013 to spare the military and the jobs that could be lost.
“We are just talking about process questions at the moment. We haven’t gotten to the substance yet,” said Senate Armed Services Chairman Carl Levin (D-Mich.), who is involved in the discussions. “We are just trying to come up with a process for addressing the sequestration issues.”
“Revenues are going to have to be on the table, there is no doubt about that,” he said. “There is just informal discussion going on, lots of them.”
Graham sees this fall’s continuing resolution as a likely vehicle for a plan that he agrees will have to include taxes. Lawmakers have already conceded that a CR will likely be needed to keep the government funded beyond Sept. 30.
“Is it OK to eliminate a deduction in the tax code, take that money, pay down debt or save the Defense Department from destruction? The answer, to me, is yes,” Graham said.
Senate Democrats hope that he can convince other Republicans to go along.