“White House officials are in advanced internal discussions about a plan to replace the sweeping spending cuts set to begin in January with a smaller, separate package of targeted spending cuts and tax increases, people familiar with the planning said.
The spending cuts, known as the “sequester,” will begin in January unless the White House and Congress intervene. They would cut spending by roughly $100 billion next year, and then for eight additional years, hitting a number of federal programs, including military programs, embassy security and state aid.
Critics of the cuts, which were put in place by last year’s Budget Control Act deal to raise the debt ceiling, have said they could derail what remains a weak economic recovery. Democrats and Republicans have separately tried to design plans to replace the sequester.
The discussions are just one part of a complicated set of possibilities as Washington deals not only with the looming spending cuts but also the expiration of the Bush tax cuts and other traditional year-end priorities, such as finding a way to halt the scope of the Alternative Minimum Tax. While moving along separate tracks, it is also possible these three policy issues could be wrapped up into one universal deal.
The White House is set to start negotiations with Republican and Democratic congressional leaders Friday.”
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