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Sequester Disagreements Could Further Complicate Fiscal Cliff Negotiations

In a plan Treasury Secretary Timothy F. Geithner gave to Congress week, the administration proposed a $4-trillion deficit reduction framework that would replace the $1.2 trillion sequester. Democrats said the plan would raise $1.6 trillion in new taxes. Republicans called it a phony proposal because, they say, it counts some $800 billion in war savings and includes about $1 trillion in spending cuts already were enacted in the 2011 debt limit increase.

Its unclear to what extent a counteroffer proposed by Speaker John A. Boehner, R-Ohio, would replace the sequester.

It could be structured in a number of ways, Boehner spokesman Michael Steel said Dec. 7 of the $2.2 trillion deficit reduction plan.

The Boehner framework would raise $800 billion in revenue, and spending would be cut by $1.4 trillion over a decade.

Although both parties object to the arbitrary nature of the sequester, they are on different pages on how it should be replaced.

The sequester resulted from the inability of a special deficit reduction committee to reach agreement last fall on a plan to reduce the deficit by $1.2 trillion over 10 years. Republicans contend that all the deficit reduction should be in the form of spending cuts. The debt limit law, however, gave the committee flexibility to use spending cuts, revenue increases or a combination of both.

Steven T. Dennis contributed to this report.

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