Republicans rejected a proposal by Senate Democrats to replace the sequestration cuts with alternative spending cuts and tax increases. Recent events suggest that a compromise will not be reached before the sequester takes effect on March 1.
The mandated cuts involve nearly $1 trillion in across-the-board reductions, including a 2% reduction to Medicare reimbursement rates. The Senate proposal would reduce the federal budget deficit by $110 billion over a decade. The proposal would delay the sequester for 10 months and generate $55 billion in new revenue by imposing a minimum 30% tax rate on individuals with annual household incomes over $1 million, as well as reductions to farm subsidies and more gradual military spending reductions.