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Sequestration Threatens To Slash Billions From Budget

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Partisan wrangling over raising the nation’s debt ceiling not only led to the U.S. credit rating being downgraded, it also set up sequestration: a mechanism to cut hundreds of billions of dollars from the federal budget if lawmakers don’t hammer out a deal.

A part of the reason it failed was because rank and file Republicans didn't want to entertain tax increases as a part of a compromise. Now Sen. Mark Warner, D-Va., is meeting with a bipartisan group of senators to hash out a deal to delay the cuts.

"We need to avoid sequestration, but it needs to be paid for," says Warner. "I can't believe some people would want to just kick the can and say, we're done, we'll just deal with it in the future.' We need to start out with a two-step process that generates some additional revenue, starts us on the path to entitlement reform and does some of the cuts."

Warner is hosting the bipartisan group of senators next week as his negotiations continue. If they fail, contractors in the region fear they'll have to lay off hundreds and possibly thousands of employees.

Warner and the others aren’t disclosing where the retreat will be located, and they’re not expected to unveil any product until after this year’s elections.

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