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Obama Proposes Short-Term Fix to Avert Sequester

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Obama asks Congress to pass a smaller package of spending cuts and tax code changes to avoid the sequester for a few months.

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Those cuts are due to hit after the agreement Jan. 1 that pushed off the sequester for two months, but the White House says the uncertainty leading up to the original Jan. 2 deadline hit the economy toward the end of last year. The White House last week blamed a 0.1 percent decline in the gross domestic product in the fourth quarter — an unexpected decline, led in part by falling federal spending — in part on uncertainty over the sequester.

Obama emphasized at the White House that although the economy is poised to strengthen this year, it should not have to absorb another “self-inflicted wound.”

Boehner earlier Tuesday noted that the House in the previous Congress passed plans to replace the sequester. “It’s time for the Senate Democrats to do their work. It’s time for the president to offer his ideas for how to replace the sequester,” he said.

The Senate did not take up the bills that the House passed last year, with Democrats saying the proposals were aimed at loading cuts onto domestic discretionary spending while sparing defense spending and avoiding tax revenue to replace any of the reductions.

Other Republicans said they welcomed the president’s offer of a plan but said they would proceed with their own efforts that would not include tax revenue.

“In the coming days, we will be introducing legislation — as we did last year — to avoid the first year of defense budget cuts by reducing the size of the federal workforce through attrition,” said Sens. John McCain of Arizona, Lindsey Graham of South Carolina and Kelly Ayotte of New Hampshire.

Senate Majority Leader Harry Reid of Nevada has said he hopes to pass a measure to replace the sequester but that it could come after the March 1 deadline passes. It is unclear how federal agencies would respond in their day-to-day operations, but other Democrats said Tuesday that they welcome the new White House approach in the meantime.

“I agree with President Obama that if we can’t agree now on a long-term solution, the best thing for families and the economy would be to pass a balanced short-term sequestration replacement while the House and Senate work on our budget resolutions,” said Sen. Patty Murray of Washington, chairwoman of the Budget Committee.

Daniel Newhauser contributed to this report.

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