Reid looking to gut sequestration; Republicans won't budge

It looks like a meeting of the minds has been reached on the debt ceiling. Both sides appear to agree that the debt limit should extend for a few months rather than a few weeks.

The sticking point now is in spending levels for the next year. The GOP wants to keep the sequestration cuts in place - cuts that Harry Reid and the Democrats voted for and President Obama signed - while the Democrats want to get rid of them.

Sam Stein:

Senate Republicans are holding the line against Democratic demands for a framework to alleviate the across-the-board spending cuts established by sequestration as part of any deal to end the government shutdown and raise the debt ceiling.

In talks between Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.), the main sticking point is now where to establish funding levels for the federal government and for how long. The Republican offer made on Friday -- to set spending at sequestration levels of $988 billion for the next six months -- was rejected by Reid and others on Saturday on the grounds that it was too favorable to the GOP position and discouraged future negotiations.

By Sunday morning, little notable progress toward a resolution had been made. McConnell, according to sources, was adamant that the spending cuts of sequestration be maintained in any final arrangement.

"Sen. McConnell will defend the commitment Congress made on spending reductions; he'll defend the law that Sen. Reid voted for and the president signed -- and subsequently bragged about in his campaign," said McConnell spokesman Don Stewart. "As I recall, Sen. Reid voted for, and President Obama signed the Budget Control Act [which established sequestration]. They may not like that the supercommittee didn't act and we're left with sequester, but under their own rhetoric, it's 'the law of the land.'"

Some of McConnell's top deputies that echoed sentiment on the Sunday talk shows. "The president and leaders of Congress need to take the responsibility of dealing with the underlying problem and keep the budget caps in place," Sen. Rob Portman (R-Ohio) told "Meet The Press." "My gosh, we just put them in place two years ago."

"If you break the spending caps, you're not going to get any Republicans in the Senate," Sen. Lindsey Graham, (R-S.C.) said on ABC's "This Week."

So where does that leave negotiations? In a difficult but not impossible place.

Senate Republicans would like to keep spending at $988 billion for one year, though in Friday's offer moderates in the party were demanding only six months. Democrats want spending at $1.059 trillion, but nearly all have said they would be willing to stomach $988 billion in the short term.

The reason these spending levels are important - aside from maintaining the sequester - is that they will establish a baseline for next year's budget. The lower the baseline, the lower federal spending will be. If the GOP can't hold the line here, what point was there in shutting down the government?

The Democrats don't want a few tweaks to the sequestesr - they want it gone. They're not going to get that, and it is unlikely they will get many tweaks during negotiations either.  It's possible that Republicans could swap some sequester changes for entitlement reform - but it would have to be more substantive than adopting a chained CPI and means testing Medicare.

Meanwhile, House Republicans are not happy. The longer the negotiations go on, the shorter the time will be for the House to pass what comes out of the Senate. Some House conservatives believe that this is part of Reid's strategy; that he and McConnell will draw out negotiations almost to the last minute, presenting the House with a "take it or default" proposition.

Nobody wants to predict the outcome if that scenario plays out.