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Donnelly: Sequestration deal not likely before deadline, could come soon

U.S. Sen. Joe Donnelly expresses hope in sequestration debate, says the inability to reach deal by Friday's deadline doesn't preclude one shortly thereafter.


Posted on Feb. 27, 2013 at 12:00 a.m. | Updated on Feb. 27, 2013 at 4:02 p.m.

There’s still hope in the sequestration debate — kind of, that is.

Even if lawmakers don’t reach an accord by Friday’s deadline — a seeming inevitability at this point — that doesn’t mean they won’t reach one in the near term, according to U.S. Sen. Joe Donnelly, D-Granger.

“The fact that we do get to Friday without an agreement does not preclude the fact that we could come to an agreement shortly therafter,” he said in a conference call Wednesday Feb. 27, with Indiana reporters.

Still, he offered no concrete hint of a looming deal, though a bipartisan group of around 25 senators recently met on the matter. And he pointed to the Republican-led U.S. House’s unwillingness to consider new revenue as part of any alternative plan to sequestration, the mix of $85 billion in mandatory cuts meant to trim the ballooning U.S. budget deficit.

“Obviously a bill has to pass both places, the House of Representatives and the Senate,” Donnelly said. “The House has indicated they will not pass any bills that ... include any revenue.”

Democrats in Washington propose a mix of spending cuts and new tax revenue to replace the sequestration package while Republicans have said the focus should be just on spending cuts. In fact, U.S. Sen. Dan Coats, the other Indiana senator and a Republican, has indicated the focus should be on cuts, as has U.S. Rep. Jackie Walorski, R-Elkhart.

In arguing for new revenue, Donnelly noted that funds now entering U.S. coffers amount to 16 percent of U.S. gross domestic product while spending amounts to 23 percent of GDP. He said revenue should be increased and spending decreased so both are at about the 20-percent level.

Possible areas of new revenue, he said, would be increasing the income tax rate on those earning more than $1 million a year to 30 percent, which would generate $53 billion over 10 years. Another possibility would be ending tax breaks on machinery that is shipped for use abroad.

As for losers, the sequestration cuts would reduce federal spending by $85 billion across the nation through September, the end of the fiscal year.

Impacted in Indiana, according to Donnelly, would be everything from grants for child immunization programs to military installations like the Crane Naval Surface Warfare Center and Camp Atterbury, the Indiana National Guard training base. Also taking funding hits would be Jobs Corps and Small Business Administration loan programs and more.



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