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House Sequester Deal: GOP Insists On No Revenue Increases (VIDEO)

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WASHINGTON -- Democrats and Republicans appeared no closer to any sort of agreement on sequestration on Sunday, with the former insisting that any upcoming deal include an increase in revenue, and the latter insisting on spending cuts alone. One crack in party unity, however, appeared when Sen. John McCain (R-Ariz.) appeared open to possibly raising revenue.

"The president accepted no spending cuts back in the fiscal cliff deal 45 days ago. So you get no spending cuts back then, then you’re going to get no revenue now," said Rep. Tom Cole (R-Okla.) in an interview with ABC's "This Week." He argued that House Republicans will stand firm against any revenue increases.

Senate Majority Whip Dick Durbin (D-Ill.), however, said Democrats expect revenue increases to equal spending cuts, arguing that sequestration "was designed as a budget threat, not a budget strategy."

"What the president is proposing for the rest of this year, at least, is that we deal with the sequester the same [way] we have the first two months: evenly split between revenue and cuts," said Durbin. "I think that's a sensible approach. It's consistent with Simpson-Bowles, which many Republicans say should be our standard, and it doesn't really impose a tax burden on middle-income families."

On "Fox News Sunday," House Minority Leader Nancy Pelosi (D-Calif.) pointed to oil subsidies as a place where the federal government could find additional revenue.

"We have made the cut in terms of agriculture subsidies -- tens of billions of dollars in cuts there -- and that should be balanced with eliminating subsidies for Big Oil," said Pelosi, when asked by host Chris Wallace why Congress couldn't find more in cuts to avoid the sequester. "Why should we lower Pell Grants instead of eliminating the subsidies for Big Oil?"

According to the Congressional Budget Office, the oil industry received $2.5 billion in tax breaks in 2011. The three largest oil companies made a combined profit of $80 billion that year. Last year, Republicans blocked a Democratic attempt to end some $20 billion in subsidies to oil companies.

Lawmakers are looking to avoid a series of automatic deep spending cuts due to kick in March 1 unless Congress comes up with an $85-billion replacement plan. As Durbin pointed out, the plan was never to have the sequestration cuts go into effect; it was a mechanism designed to put a fire under lawmakers to come up with an alternative.

House Majority Leader Eric Cantor (R-Va.) attempted to lay the blame for the situation at the door of the White House, saying on "Meet the Press," "The president, he's the one that proposed the sequester in the first place."

When asked by host David Gregory about the possibility of raising revenue, Cantor grew frustrated. "The problem is every time you turn around, the answer is to raise taxes," Cantor replied. "[The president] just got his tax hike on the wealthy. And you can't in this town every three months raise taxes. Again, every time, that's his response."

McCain, however, argued that Republicans deserve an equal amount of the responsibility. "Republicans and Democrats are responsible for the new cliff, and I'll take responsibility for it for the Republicans," McCain said on "Fox News Sunday. "But we've got to avoid it. We've got to stop it."

"Would I look at some revenue-closers? Maybe so," said McCain, sounding slightly more conciliatory than his House GOP counterparts. "But we already just raised taxes. Why do we have to raise taxes again?"

The Budget Control Act created the concept of sequestration in 2011. On "This Week," Cole argued that Obama was responsible for that deal, but, as Rep. Keith Ellison (D-Minn.) pointed out, Republicans also voted for the legislation.

"Well, Tom, the problem with saying this is the president’s idea is that you voted for the Budget Control Act. I voted against it," Ellison said. "We wouldn’t have ever been talking about the Budget Control Act but for your party refused to negotiate on the debt ceiling, something that has been routinely increased as the country needed it. You used that occasion in August 2011 to basically say, 'We are going to default on the country’s obligations or you’re going to give us dramatic spending cuts.' That’s how we got to the Budget Control Act."

Senate Democrats plan to introduce a bill next week to postpone the sequester-related cuts until December. That bill would cut the deficit by $120 billion over 10 years. Approximately $55 billion would come from revenue hikes and a slightly larger amount would come from spending cuts.

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