On February 28, the Senate held side-by-side test votes to consider competing proposals to alter the sequester from the Democrats and Republicans. As expected, both proposals were rejected, as each required 60 votes to move forward. The Senate Democrats’ plan (S 388), backed by the President, would have delayed the sequester until January 2014 by replacing it with $110 billion in alternative savings from a combination of tax increases and alternative spending cuts. The Republicans’ plan (S 16) would have left the $85.3 billion sequester in place for fiscal 2013, but would have called on President Obama to submit to Congress an alternative package of spending cuts, with no tax increases, to replace the sequester. These measures may help set the state for budget negotiations in the month ahead.

Also, on Friday morning, the day that the sequester legally took effect, the President hosted Democrat and Republican congressional leaders from both chambers to discuss a deal to address the sequester and avert a government shutdown once the current continuing resolution (CR) expires on March 27. The meeting ended without an agreement in sight. Republican leaders stated following the meeting that they told the President they are not open to new revenue as part of a plan to further reduce the deficit. President Obama delivered a statement following the meeting saying that lawmakers must compromise on tax and entitlement reform, which would include spending cuts and net revenue increases, to achieve savings that can replace the sequester and reduce the deficit.

Lawmakers are now looking to March 27 as the next key budget deadline, when the current continuing resolution (CR) will expire. In order to prevent a government shutdown, Congress will need to reach a deal to continue funding the federal government for the remainder of fiscal 2013. It is possible that such a deal could also include provisions to alter or replace the March 1 sequester, but the outlook for this possibility remains uncertain.

Links: S 388; S 16; President’s Statement