President Has “Not Given Up” Hopes over Averting Sequester But GOP is Pessimistic

The White House Chief of Staff, Dennis McDonough believes that there is still room for further negotiations with the Republicans so that the sequestration or across-the-board spending cuts is prevented.

While speaking to Bob Schieffer on CBS’s “Face The Nation” on Sunday, McDonough said, “Well we’ve not given up on this, Bob, and the reason we haven’t given up on it is because it’s going to have a real impact on middle class families.”

Last week, Senate Democrats had presented an alternative plan aimed at postponing sequester. The package proposed 50:50 ratio between tax hikes and spending cuts.

However, this package was straight away rejected by the GOP, citing that the matter involving raising taxes on wealthy Americans was already being addressed when the “fiscal cliff” was averted.

Still, Democrats are adamant with their posture which is to generate equal savings both from spending cuts and tax increase.

“When you look what at Senate Democratic plan and the president’s plan – both very balanced plans that get some savings in this deficit fight from spending cuts, and some savings from increased revenues,” added McDonough while speaking to “Face the Nation”.

According to Senate Majority Leader, Harry Reids’ Office, Senate Democrats were targeting to generate $54 billion through implementing “Warren Buffet rule” that calls for at least 30% tax on millionaires and raising additional $2 billion by closing tax-loophole which favors oil companies, currently.

Republicans argue that there are “better ways” to solve the issue of budget cuts even though John McCain (R-Ariz) showed support to Obama’s call for raising taxes in order to avoid the sequester.

Sen. John Barrasso, R-Wyo., said to CNN’s “State of the Union” on Sunday that Democrats’ new package on budget cuts was “off the table,” and their demand for generating additional revenue isn’t going to convince the GOP.

“Let me be very clear – and I’d say this to the president as I say it to you – these spending cuts are going to go through.  ”The American people need to know tax cuts are off the table and the Republican Party is not in any way going to trade spending cuts for a tax increase,” said Barrasso on “State of the Union”.

Earlier on Sunday, McCain said that although he was in favor of closing loopholes in existing tax laws, ongoing subsidies were “outrageous and disgraceful”.

More Posts by this author

• AIG Posts Surprise Q4 Adjusted Profit
• Hewlett-Packard Q1 Results Edge Past Street’s Estimates, Outlook also Tops Expectations (HPQ)
• Gold Prices Recover Some Lost Ground after Weak U.S. Economic Indicators
• Market Update After Hours February 21
• Stocks Finish Lower for a Second Consecutive Day
• Forex Market Update: Euro Falls Against Dollar and Yen
• Gold Prices Bounce Back; Silver Prices also Gain

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.