SEQUESTRATION:

Senate to vote on dueling bills to avert cuts, but no deal in sight

The Senate plans to vote later this week on dueling proposals aimed at averting the looming spending cuts set to kick in Friday, aides said yesterday.

While House Speaker John Boehner (R-Ohio) suggested yesterday that Republicans may be able to support Senate proposals eliminating agriculture subsidies to offset some of the cuts, he reiterated the GOP's insistence that additional tax revenue be taken off the table.

The White House, however, has been strongly lamenting the potentially devastating effects of the so-called sequester and talking up the need for additional tax revenue. Both sides appear to be headed once again toward a collision course.

Senate votes on the pair of bills -- one from Senate Democrats, another from Republicans -- are expected toward the end of the week. Senate Democrats earlier this month unveiled their proposal to avert cuts that would slash $85 billion in spending across almost all federal agencies for the remainder of this year.

The Democrats' bill would eliminate a so-called tax loophole that spares developers of oil sands from paying into a federal spill-cleanup trust fund. It also would raise taxes on wealthy individuals and corporations, eliminate agriculture subsidies and cut defense spending (E&ENews PM, Feb. 14).

A provision to eliminate $27.5 billion in direct payments to farmers was the only non-defense spending that the Senate Democrats' bill would cut. During a brief press conference yesterday afternoon, Boehner said the idea could gain traction with Republicans. "Certainly, I think it would be an option. It would be someplace to start," he said.

Senate Republicans have not yet unveiled their proposal, which is expected to be discussed at the party's weekly policy lunch today, a Senate GOP aide said.

Boehner and other House Republican leaders yesterday pointed out that the lower chamber last year passed two bills that would replace the sequester with other spending cuts and accused President Obama of being more interested in holding campaign-style rallies than in proposing his own sequester alternative. They dismissed calls from Obama and congressional Democrats for added tax revenue instead of spending cuts.

"Listen, the president says we have to have another tax increase in order to avoid the sequester. Well, Mr. President, you got your tax increase. It's time to cut spending here in Washington," Boehner said. "Instead of using our military men and women as campaign props, if the president was serious, he'd sit down with [Senate Majority Leader] Harry Reid and begin to address our problems."

White House offensive

Obama administration officials have been speaking in near-apocalyptic terms about the effects of sequestration on the economy and government programs. Over the weekend, they warned of cuts to pollution and wildlife funding, and potential permitting delays for energy and mineral production.

While the White House has been increasingly open about the potential effects of budget cuts, there is much uncertainty surrounding how different departments would distribute dollars if and when sequestration happens.

Yesterday, the president himself asked a gathering of the National Governors Association to help him lobby lawmakers to work with him toward compromise.

"So while you are in town, I hope that you speak with your congressional delegation and remind them in no uncertain terms exactly what is at stake and exactly who is at risk," he told governors at the White House. "Because here's the thing, these cuts do not have to happen. Congress can turn them off anytime with just a little bit of compromise."

Yesterday afternoon, Interior Secretary Ken Salazar warned of cuts to the national parks (E&ENews PM, Feb. 25). And Homeland Security Secretary Janet Napolitano said sequestration would make it tougher to prepare for disasters.

"In terms of our nation's disaster preparedness response and recovery efforts, it would reduce the Disaster Relief Fund by nearly $1 billion, potentially affecting survivors recovering from Hurricane Sandy, the tornadoes in places like Tuscaloosa and Joplin, and other major disasters across the country," she told reporters at the White House.

Top administration aides said the automatic cuts would mean that federal spending to help communities recover from Superstorm Sandy would decrease by about $3 billion. Principal Deputy Director of the National Economic Council Jason Furman said, "Absolutely it would affect Sandy, and that's a good example."

Furman, who blamed the House for the impasse, said allowing the cuts but giving the White House more leeway in executing them also is not a good option. He said the sequester is problematic because of the "magnitude and speed of these spending reductions."

Obama yesterday reiterated his support for entitlement reform. But surrogates said Congress has already approved significant spending reductions and does not appear to be ready to budge on the need for more tax revenue.

"The choice is very clear for congressional Republicans," said Amy Brundage, White House deputy press secretary for the economy. She said closing loopholes and paring back deductions is the "balanced solution."

But Republicans and other administration critics have been crying foul over the White House's predictions of the effects of sequestration. They say the president is using fear to get his way.

House Majority Leader Eric Cantor (R-Va.) said, "This is a false choice, and the president has been engaging in this rhetoric of a false choice for weeks now."

Obama will travel today to Newport News, Va., where he will deliver a speech on the sequester at a ship-building facility. He warned that "workers will sit idle when they should be repairing ships, and a carrier sits idle when it should be deploying to the Persian Gulf" if sequestration happens.

Want to read more stories like this?

E&E is the leading source for comprehensive, daily coverage of environmental and energy politics and policy.

Click here to start a free trial to E&E -- the best way to track policy and markets.