Analysis: Congress Scrambles To Avert Cuts To Pentagon Budget | WAMU 88.5 - American University Radio

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Analysis: Congress Scrambles To Avert Cuts To Pentagon Budget

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As much as $55 billion in defense spending cuts are set to go into effect in January unless Congress intervenes. They were part of a deal last year to raise the debt ceiling and reduce the federal deficit. They could have a dramatic impact on the D.C. area, explains The Hill's Alex Bolton, with the region's deep ties to the military and defense contractors, prompting area lawmakers fight to prevent them.

Sen. John McCain (R-Az.) has been trying to prevent these defense cuts from happening. What is he proposing?

"McCain, the senior Republican on the Senate Armed Services Committee, is working with Carl Levin, the chairman of that committee, on a package that would replace the cuts with something else. Republicans would like to replace it with cuts to social programs, but Democrats have drawn a very strong line in the sand that they are not going to except that. They say that whatever deal McCain and Levin come up with, it has to include new taxes, higher tax revenues. So McCain and Levin are working on something."

"On Friday, McCain proposed taking some of the tax hole closures that were floated by Republicans during the deficit reduction super committee talks in the fall and using them to offset the defense cuts."

How much support has McCain been able to come up with?

"McCain has the support of members of the Armed Services Committee — presumably Lindsay Graham (R-SC) is signing on to the proposal... John Kyle, the Senate Republican Whip could perhaps sign on to it. He's retiring at the end of the year, so he might not be averse to closing these tax loopholes."

"The main obstacle in Virginia is Dave Camp. He's chairman of the Ways and Means Committee in the House — that's the committee with jurisdiction over tax issues. Camp had Grover Norquist, the tax activist to the Ways and Means Committee last week. Grover delivered a very clear and direct message to Republicans who attended the meeting. He said that anybody who votes to close these tax loopholes would  be violating the anti-tax pledge that many Republicans have signed. Furthermore, he said it would imperil efforts to do broader tax reform next year. That's what Camp's goal is — he wants to do larger tax reform package next year that would reduce marginal tax rates. To do that, he needs to save these various tax loopholes that McCain wants to close this year to prevent defense cuts."

Do you see other prospects for trying to prevent these defense cuts?

"The other prospect is the so-called 'grand bargain' that lawmakers have been talking about for almost two years now. Sen. Mark Warner of Virginia is very involved in that effort. He's been convening these quiet bipartisan negotiations. High-level members of the Democratic leadership are interested in this effort and some Republicans have, in private, voiced some support for raising some taxes, closing some tax loopholes. So if there is a grand bargain to reduce the deficit at the end of the year, that could avert these cuts."

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