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VOL. 37 | NO. 7 | Friday, February 15, 2013




Democrats to unveil bill to replace budget cuts

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WASHINGTON (AP) — President Barack Obama's Democratic allies in the Senate are unveiling legislation Thursday to avoid a looming set of sharp, across-the-board spending cuts set to strike the Pentagon and domestic agencies in just two weeks.

The measure would impose a minimum tax rate on million-dollar incomes and replace the automatic cuts, known as a sequester in Washington-speak, with cuts to much-criticized farm subsidies and more gradual reductions to the Pentagon budget.

But the legislation, set to be revealed Thursday afternoon, is sure to die at the hands of Republicans opposed to new tax hikes when a vote is called the week of Feb. 25. Its release set off a predictable round of bickering in the Capitol.

"Their whole goal here isn't to solve the problem, it's to have a show vote that's designed to fail, call it a day, and wait for someone else to pick up the pieces," said Senate GOP Leader Mitch McConnell of Kentucky.

"Well, my message this morning is simple: There won't be any easy off-ramps on this one. The days of 11th hour negotiations are over. Washington Democrats may have gotten used to Republicans bailing them out of their own lack of responsibility. But those days have passed."

The automatic cuts would drain $85 billion from the government's budget over the coming seven months, imposing an 8 percent cut on the Pentagon and a 5 percent cut on domestic agencies. Medicare provider payments would be cut by 2 percent.

The cuts are the resulting failure of a 2011 deficit "supercommittee" to reach agreement. The original idea was that the threat of the sequester would drive Democrats and Republicans to strike a budget bargain.

The ongoing deadlock comes as more and more federal agencies are coming forward with details about the consequences of the cuts, which are set to take effect March 1.

The Senate Appropriations Committee heard testimony from several Obama administration officials. The Pentagon, for instance, would have to furlough civilian employees for up to 22 working days over six months, while 15,000 air traffic controllers would be laid off for more than two weeks. There would be the equivalent of 5,000 fewer border patrol agents and 1,000 fewer FBI, Drug Enforcement Administration and Bureau of Alcohol, Tobacco and Firearms and Explosives agents and U.S. Marshals.

Daniel Werfel, a top official in the White House budget office, said the cuts will mean reduced operating hours at smaller rural airports, less food aid for pregnant women and their children and less money for mental health programs. He said the cuts will "keep federal agencies from conducting the inspections necessary to keep our food, our air, and our water safe and clean."

"A 5 percent cut this late into the fiscal year often translates into a double whammy for our agencies because fixed costs like rent and utilities can't be cut. The big cuts will be to salaries, which means furloughs, layoffs, and services not delivered to the American public," said Appropriations Committee Chairwoman Barbara Mikulski, D-Md.

The Agriculture Department, for instance, says furloughs of inspectors would force the closure of meat and poultry processing plants for up to 15 days nationwide, with resulting industry production losses of up to $10 billion and $400 million in lost wages.

The Interior Department says automatic spending cuts set to take effect next month would lead to reduced hours and services at national parks, wildlife refuges and other public lands. The department is preparing to reduce hours and services at all 398 national parks and possibly could close up to 128 wildlife refuges.

The State Department warns it would lose $2.6 billion in department and USAID funds this year. The cuts would mean $200 million less in humanitarian assistance for places like Syria and Somalia, and $300 million less in foreign military financing to U.S. allies such as Israel, Jordan and Egypt.

Security at U.S. diplomatic installations, incredibly sensitive since the Sept. 11 attack in Benghazi, Libya, would also be affected, as would international peacekeeping operations in Mali and elsewhere and programs combatting terrorism, weapons proliferation and drug trafficking.

Speaker John Boehner, R-Ohio, told reporters on Thursday the sequester was Obama's idea and said it's up to Senate Democrats to see if they can pass legislation to replace it with other spending cuts.

"The sequester, I don't like it. No one should like it. But the sequester is there because the president insisted that it be there. Where's the president's plan to replace the sequester that he insisted upon?" Boehner told reporters.

The Senate bill would forestall the cuts through Dec. 31 and substitute about $120 billion in deficit savings over the coming decade. Almost $1 trillion worth of cuts over the coming eight years would remain in place.

But Republicans are likely to block the measure because it contains a 10-year, $47 billion tax increase known as the "Buffett Rule" that would require people with million-dollar incomes to pay a minimum of 30 percent income tax. The rule is named after billionaire investor Warren Buffett, whose secretary pays a higher tax rate than he does.

The measure would also raise about $24 billion by cutting much-criticized direct payments to farmers in addition to $27 billion in Pentagon cuts. Interest savings would contribute most of the rest.

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