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  • Showdown in December
    Posted by Jen DiMascio 10:09 PM on Mar 01, 2012

    Rep. Adam Smith (Wash.), the top Democrat on the House Armed Services Committee, put the debate over defense spending in stark terms. Come December, he says Republicans may have to choose between two prized policies – tax increases or defense cuts.

    Given the November elections, neither the Democrats nor the Republicans have advanced serious efforts at reducing the deficit by $1.2 trillion over the next decade. But the clock is ticking on the penalties imposed by last year’s Budget Control Act. If Congress wants to avoid handing down automatic budget cuts of $1.2 trillion across the government – about half of which would be aimed at security programs – they will have to reach a deal before January 2, 2013.

    The Bush-era tax cuts are also expiring at the end of the year. Extending them will require a vote on Capitol Hill.
    And that sets up the pickle for the Republicans, Smith suggests.

    If Congress does nothing, and the tax cuts expire, the savings could be counted toward $1.2 trillion in deficit reduction, he says. But a vote to extend the Bush tax cuts, he notes, will essentially be a vote to lock in steeper cuts to defense.

    Tags: ar99, Congress, budget

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