California Healthline: GOP Rejects Senate Democrats’ Plan To Avoid Mandated Spending Cuts

On Sunday, Republicans rejected a recent proposal by Senate Democrats to replace mandated spending cuts under sequestration with alternative spending cuts and tax increases, suggesting little chance that a compromise will be reached before the sequester takes effect in March, the Wall Street Journal reports (Peterson, Wall Street Journal, 2/17).

The mandated cuts involve nearly $1 trillion in across-the-board reductions, including a 2% reduction to Medicare reimbursement rates. In January, President Obama signed legislation — negotiated by Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.) — that delayed the cuts by two months, to March 1 (California Healthline, 2/15).

The Senate proposal would reduce the federal budget deficit by $110 billion over a decade (Wall Street Journal, 2/17). The proposal — which would delay the sequester for 10 months — would generate $55 billion in new revenue by imposing a minimum 30% tax rate on individuals with annual household incomes over $1 million, as well as reductions to farm subsidies and more gradual military spending reductions.

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