Democrats are said to be contemplating a short delay in spending cuts, called sequestration, that are scheduled to kick in on March 1.
A closed-door retreat in Annapolis, MD will house the debate of options for offsetting the reductions.
This Website Is For Financial Professionals Only
The figure being thrown around is $50 billion in reductions of the scheduled cuts as well as revenue increases to afford a five-month delay in the enactment of the cuts.
Action on the cuts is sure to involve increased revenue as well as slicing the amount of the cuts.
Other options include raising taxes on oil companies and converting private equity managers’ carried interest to ordinary income instead of considering it capital gains, which are taxed at a lower rate.
Republicans say they will not allow any tax hikes. They say government spending is completely out of control.
Under sequestration, defense programs would be cut 7.3% or $42.7 billion by the end of 2013, the same amount as non-defense budgets. Those would include programs like Medicare and temporary assistance for needy families.