Sen. Lindsey Graham, a pivotal member of a bipartisan group of senators trying to overhaul the nation’s immigration system, said on NBC’s Meet the Press Sunday that the key to a bipartisan “grand bargain” on entitlement reform and tax reform “is can we solve immigration?”

If Democrats and Republicans can come up with a bill to overhaul the nation’s immigration system, the South Carolina Republican said, it would open the way to a deal on entitlements and taxes.

Related: Graham warns of North Korean regime overplaying its hand

A member of the Senate Judiciary Committee, Graham has been collaborating with three other Republican senators, Marco Rubio of Florida and Jeff Flake and John McCain of Arizona, along with four Democratic senators, to try to design an immigration bill. This group is known as the Gang of Eight.

“We’re hoping to get this thing done in the next couple of weeks,” the South Carolina Republican told NBC’s David Gregory.

The leading Democratic member of the Gang of Eight, Sen. Charles Schumer of New York said Sunday on CBS's Face the Nation that “So far we're on track. All of us have said there will be no agreement until the eight of us agree to a big, specific bill but hopefully we can get that done by the end of the week.”

The major impediment to reaching a final immigration accord is now the design of a guest worker program, Graham said on Meet the Press. If Republican negotiators are willing to allow a path to citizenship for those foreigners now illegally living in the United States, Graham said, “then the Democratic Party has to give us a guest worker program to help our economy. That’s what we’re arguing over.”

In a message to fellow Republicans, Graham said “the politics of self-deportation are behind us,” – a reference to an idea floated during the 2012 presidential campaign by GOP candidate Mitt Romney. Graham implied that the millions of non-citizens who are illegal living in the United States won’t leave voluntarily and he added that the concept of “self-deportation” was both “impractical” and “offensive.”

Graham said “nuggets” in proposals already leaked from President Barack Obama’s budget plan for the new fiscal year are “somewhat encouraging” and could lead to a deal with Republicans on entitlements and taxes. Obama is “showing some signs of leadership that has been lacking,” he said.

According to Obama administration officials, the president on Wednesday in his Fiscal Year 2014 budget blueprint will propose some changes in entitlement programs – such as a new formula for Social Security, which would effectively reduce retirement benefits, and raising the premiums that upper-income Medicare beneficiaries would need to pay for coverage.

“We’re beginning to set the stage for the grand bargain,” said Graham.

But he mentioned one idea that Obama has not proposed – raising the eligibility age for Medicare benefits from the current age of 65. Graham called for a change to “harmonize the retirement age of Medicare with Social Security.” For middle-aged and younger workers, the eligibility age for full Social Security retirement benefits is 67. For Medicare benefits, the eligibility age is now 65.

On immigration, Graham faces increasingly vocal opposition from some of his fellow Republicans in the Senate.

Related: LGBT activists jump into immigration fray, seeking same-sex partner protections, rights

On Friday, four Republican members of the Judiciary Committee, led by ranking member Sen. Charles Grassley of Iowa, sent a letter to Graham and the other Gang of Eight Republicans saying, “your group has secretly met for months and not consulted with members of the Committee about major changes to our nation’s immigration laws. The time for transparency has come.”

Grassley and his GOP colleagues complained about   the “rushed timetable” which they say Judiciary Committee Chairman Sen. Patrick Leahy, D- Vt., has set for committee approval of the immigration overhaul, moving directly to committee drafting of a bill, with no additional committee hearings.

“We believe it is time for you to discuss the status of your negotiations, disclose what concessions have been made, and provide details to members of the Judiciary Committee as well as the entire Republican Caucus,” the Grassley group said in its letter to Graham and other GOP Gang of Eight members.

Susan Walsh / AP

President Barack Obama gestures as he speaks during an Easter Prayer Breakfast in the East Room of the White House in Washington, Friday, April 5, 2013.

With the Friday release of ingredients of President Barack Obama’s budget proposal for the new fiscal year, it is clear that the fiscal policy divide remains as wide as ever between Democrats and Republicans.

Obama will once again propose some changes in entitlement programs — such as a new formula for Social Security, which would effectively reduce retirement benefits, and raising the premiums that upper-income Medicare beneficiaries would need to pay for coverage.

Some Republicans have supported such proposals in the past and might support them now.

But in a sense it’s the summer of 2011 all over again, when a tentative deal between Obama and House Speaker John Boehner collapsed. For example, the new formula for Social Security benefits, called “chained CPI,” was part of the failed Obama-Boehner negotiations in 2011.

However, there’s been one decisive change since that busted budget deal two years ago: On Jan. 2, Obama signed into law a tax increase worth about $600 billion over ten years. Since then, Republican congressional leaders have repeatedly rejected Obama’s and other Democrats’ calls for another round of tax increases.

After elements of Obama’s Fiscal Year 2014 budget plan were reported Friday, former congressional Budget Committee staffer Stan Collender said, “A grand bargain is still a long way — as in years — away. The president may get an agreement that can pass the Senate (although I doubt it), but the real problem is, and always has been, the House. The House GOP can't agree to additional revenues without risking its majority status so it won’t much care about what the Senate GOP agrees to do.”

House Speaker John Boehner signaled just that in response to the president’s budget. “If the president believes these modest entitlement savings are needed to help shore up these programs, there's no reason they should be held hostage for more tax hikes. That's no way to lead and move the country forward," Boehner said. 

Among House Republicans a deep-seated skepticism remains that increased revenue would actually be used for deficit reduction, instead of paying for new federal entitlements.

In simplest terms, here’s how the three different budget blueprints offered by Obama, Senate Democrats and House Republicans compare:

The Obama plan: Higher taxes through elimination of certain tax preferences for upper-income people; more cost-sharing by upper-income people for Medicare benefits; reductions in Social Security benefits through the new “chained CPI” formula.

The Senate Democrats’ plan: Higher taxes through elimination of certain tax preferences for upper-income people; some relatively small cost-saving changes in Medicare.

The House Republicans: Tax reform through lowering income tax rates and eliminating most tax credits and other preferences – but no additional revenue to be raised, other than from greater efficiency of a reformed tax code; fundamental change in Medicare for those who become eligible for benefits in 2024 or later, making the program a more market-based system, with subsidies for lower-income and sicker beneficiaries.

If an accord is to be reached between Obama and Republicans, the chained CPI idea could be one building block of a deal, but Collender cautions “only if (new tax) revenues are part of the equation. Obama — and congressional Democrats won't agree to that without getting the tax changes they want in return.”

And Democrats signaled displeasure with the president’s inclusion of changes in Social Security. Congressional Progressive Caucus co-chairs Reps. Raul Grijalva, D-Ariz., and Keith Ellison, D-Minn., said Friday that when dealing with the Republicans, Obama “should not try to bargain for their good will with policies that hurt our seniors….”

They said any cuts in Social Security benefits “could be disastrous for our economy because the recession has led more seniors to rely to Social Security for income.”

Meanwhile, the discouraging employment data released Friday underscored the continued need for more federal revenue. With faster economic growth and more jobs being created, federal revenues would begin to return to their normal levels and would help reduce deficits and slow the growth of the federal debt.

There was some good news on the revenue front Friday as the CBO reported that individual income and payroll tax revenues increased by 12 percent in the first six months of the fiscal year, compared to the same period in the prior year. This was partly due to the tax increase that Obama signed into law.

From 1997 to 2007, federal revenues averaged 18.5 percent of gross domestic product. In fiscal year 2012, revenues were only 15.8 percent of GDP and the Congressional Budget Office estimates they will amount to 16.9 percent of GDP in the current fiscal year.

Some veteran budget observers look back on the year-end fiscal cliff deal Obama struck with GOP leaders as a lost opportunity to get more revenue.

“The amount of revenue that was generated by the deal was far lower than the president and the Democrats had hoped for, and even lower than the amount the Republicans seemed willing at various times to put on the table,” former CBO director Robert Reischauer noted right after Obama signed the tax increase into law.

The deal Obama agreed to at the end of 2012, Reischauer said, will signal that higher income tax rates “are off the table in the future” – which he said was “very damaging” since higher revenues will be needed over the next few decades.

One interesting new element in Obama’s proposal leaked Friday is sure to spark more discussion in the weeks ahead: limiting tax sheltered retirement accounts.

A senior administration official said the budget plan will include a proposal to prohibit individuals from accumulating over $3 million in Individual Retirement Accounts (IRAs), 401k accounts, and other tax-preferred retirement accounts.

Under current law, some Americans can accumulate millions of dollars in their retirement accounts, which this official said is “substantially more than is needed to fund reasonable levels of retirement saving.”

This proposal is yet another indication that the relentless search for more revenue continues.

Related: 

Obama to offer compromise budget to Republicans

Boehner says Obama holding entitlement reform 'hostage' for tax hikes

As First Read wrote this morning, President Barack Obama's budget is expected to contain an additional $1.8 trillion in deficit reduction over 10 years -- including a measure to change the way cost-of-living increases are calculated for Social Security recipients. 

The outline, which mirrors an abandoned compromise offer from the White House to House Speaker John Boehner last year, is already causing griping on the left because the entitlement changes would effectively decrease payments to beneficiaries.

But the budget isn’t exactly getting a ringing endorsement from Boehner either. The House Speaker said in a statement Friday that the White House is holding the entitlement reforms "hostage" by asking for further revenues. 

Boehner's full statement follows: 

"The president and I were not able to reach an agreement late last year because his offers never lived up to his rhetoric. Despite talk about so-called balance, the president's last offer was significantly skewed in favor of higher taxes and included only modest entitlement savings. He said he could go no further toward the  middle, and that's why his last offer was rejected.  In the end, the president got his tax hikes on the wealthy with no corresponding spending cuts. At some point we need to solve our spending problem, and what the president has offered would leave us with a budget that never balances.  In reality, he's moved in the wrong direction, routinely taking off the table entitlement reforms he's previously told me he could support.

"When the president visited the Capitol last month, House Republicans stated a desire to find common ground and urged him not to make savings we agree upon conditional on another round of tax increases. If reports are accurate, the president has not heeded that call. If the president believes these modest entitlement savings are needed to help shore up these programs, there's no reason they should be held hostage for more tax hikes. That's no way to lead and move the country forward." 

This story was originally published on Fri Apr 5, 2013 10:46 AM EDT

As they prepare to take a two-week Easter break, Congress has been busy passing bills and resolutions on taxes and spending, but there are several budget paths converging all at once.  What does all the action really mean? Here’s a guide to what’s happening:

Both houses of Congress this week passed a $1.27 trillion spending bill to keep the government operating for the rest of the fiscal year, that is, until Sept. 30. Was that bill part of the process of designing a budget for the government?

No. That bill – passed by the House on Thursday and by the Senate on Wednesday – was a measure to keep non-entitlement spending at current levels until the end of fiscal year 2013. That bill is separate from the plan – called the budget resolution -- for the new fiscal year which begins on Oct. 1.

This week the House and Senate have each been working on their own budget resolutions for the coming fiscal year.

Recommended: Senate votes to kill part of 2010 health care overhaul

What did that spending bill have to do with the spending reductions required by the Budget Control Act of 2011 – the so-called “sequester”?

That bill abides by the spending limits sets by the Budget Control Act. It does not try to undo those limits.

What exactly is the budget resolution which each house of Congress was working on Thursday and Friday?

The budget resolution is a blueprint for spending and for revenues. It does not specify exactly how much money will be spent in the coming fiscal year, for example, on the federal inspectors who check on meat, poultry, and eggs. Nor does the blueprint in itself appropriate money to be spent. Instead it sets broad targets and creates a framework within which Congress will consider separate revenue and spending bills.

Does the budget resolution apply only to the coming fiscal year that starts on Oct. 1?

No, it attempts to set goals for ten years, through 2023.

Can a budget blueprint that’s being voted on this week accurately reflect what economic conditions might be in 2016 or 2018 or 2023?

No. If, for instance, there were another recession in 2016, revenues would decrease since workers would lose their jobs and not be paying income taxes.

But Congress uses a budget “baseline,” a set of assumptions, prepared by the nonpartisan Congressional Budget Office to try to forecast what employment levels will be during the next ten years, what interest rates will be, etc. The CBO baseline also assumes that current laws – such as the tax law that Obama signed on Jan. 2 -- will remain in effect and will not subsequently be changed by Congress.

If the House and Senate each pass different budget resolutions, would they need to negotiate in a conference committee a compromise version of a budget?

Yes, but since their budget blueprints plans are so different they may not try to do that. If so, there would no official budget resolution for Fiscal Year 2014. Sarah Binder, an expert on Congress at George Washington University and the Brookings Institution, said Thursday, “There doesn’t seem to be any hope of going to conference and actually doing the real budget process.”

Did Congress pass a budget resolution last year?

No. The Senate has not passed a budget resolution in four years.

Without a budget resolution, will federal spending stop?

No, spending continues under either a temporary spending bill similar to the one now in effect, or by means of specific appropriations bills for the departments and agencies.

What are the main features of the blueprint which the House passed on Thursday – and how does that proposal differ from the Senate Democrats’ plan?

Under the leadership of House Budget Committee chairman Rep. Paul Ryan, the House passed a plan that would sharply reduce federal debt as a percentage of national income and would reduce Medicaid and other health care spending as a percentage of national income. Ryan’s proposal would also make fundamental changes in the Medicare program for people who’d become eligible for benefits in 2024 or later. Ryan’s plan would offer the choice of traditional fee-for-service Medicare along with private health care plans. His critics charge that this would lead to the demise of the traditional Medicare design.

Senate Democrats’ plan offered by Budget Committee chairman Sen. Patty Murray, D- Wash., would preserve the current design of Medicare. It would also instruct the Senate Finance Committee to come up with legislation by Oct. 1 that would raise $975 billion in new tax revenues over the next ten years. That legislation would not be subject to a Senate filibuster.

If a budget blueprint is more or less a statement of goals for a ten-year period, how much real significance does it have?

It’s a statement of the priorities the Senate or House majority has, for example, on education or defense.

But what’s especially important in the Senate is that the budget process can be used to circumvent the requirement that bills have 60 votes before advancing to final passage.

Using a process called “reconciliation,” the Senate can pass a budget measure with only 51 votes.

Given the current political lineup, in order to enact tax reform or entitlement reform into law, Senate Democrats would need their plan to be approved by a Republican-majority House.

How can the Senate budget debate be used to score points for the 2014 elections?

Over time the Senate has developed a process called the “vote-a-rama,” which allows senators to offer a theoretically unlimited number of amendments to the budget resolution.

Some of these amendments may be simple statements of belief or perhaps might be used to put senators up for reelection in 2014 in an awkward spot explaining why they voted against it.

For example, Sen. David Vitter, R- La., said Thursday he’ll be offering amendments to end automatic pay increases for members of Congress, to require photo identification for voting in federal elections, to set up an entry-exit system to determine whether foreign visitors to the United States leave when their visas expire, and to halt greenhouse gas regulations until the governments of China, India and Russia implement similar rules to reduce emissions in their countries. 

This story was originally published on Fri Mar 22, 2013 8:44 AM EDT

The House of Representatives successfully passed Republicans' 2014 budget on Thursday with four votes to spare, relying only upon GOP votes to advance Wisconsin Rep. Paul Ryan's third budget blueprint.

The House voted 221-207, largely along party lines, to advance the budget for the next government fiscal year. The plan seeks to balance the budget within a decade, primarily by saving $4.6 trillion through cuts to spending, and reforms to Medicare that would transform the plan into a "premium support" (or voucher) system.

Ten Republicans joined with Democrats, all of whom opposed the Ryan budget, to vote against the plan. Due to the defections, Republicans only passed their budget by an extra margin of four votes. Ten Republicans also opposed last year's budget, though there were 241 total GOP members of the House last year, versus 232 sitting Republicans at the time of today's vote.

The budget is the third passed by Republicans since retaking the House in the 2010 elections. But like the two preceding budgets, Ryan's 2014 fiscal blueprint will likely never become law, due to opposition from both the president and Senate Democrats.

The House moved quickly following the budget vote to pass legislation settling spending levels for the rest of this fiscal year, which concludes at the end of September.

The House voted 318-109 with bipartisan support to pass a continuing resolution funding the government through that date, averting a government shutdown that would have occurred at the end of March if spending authority had run out. The Senate passed that legislation on Wednesday, and it now heads to the White House for President Barack Obama's signature, once he returns from a foreign trip to Israel.

Republicans set the stage for this spring's fiscal battles by readying the debut of their new budget blueprint on Tuesday, which they said would achieve $4.6 trillion in savings and balance the U.S. budget within a decade. 

Rep. Paul Ryan, R-Wis., argued that his forthcoming budget — the third he's authored as chairman of the House Budget Committee — would be able to achieve a balanced budget by 2023, and boost the gross national product by as much as 1.7 percent in the meanwhile. 

The plan is unlikely to ever become law in its entirety; it assumes a repeal of President Barack Obama's health care reform law, and collects no new revenue from taxes, two elements which are unpalatable to Democrats. 

But budgets are often more political statements about a party's priorities than a hard governing blueprint. With that in mind, Ryan, the 2012 GOP vice presidential nominee, sought to inoculate Republicans from criticism of the budget, and play offense against Democrats' forthcoming budget. 

"Our opponents will shout austerity, but let's put this in perspective," Ryan wrote in an op-ed to be published in Tuesday's Wall Street Journal. "On the current path, spending will increase by 5 percent each year. Under our proposal, it will increase by 3.4 percent. Because the U.S. economy will grow faster than spending, the budget will balance by 2023, and debt held by the public will drop to just over half the size of the economy."

Ryan was set to detail his full plan in a press conference on Tuesday morning, but his op-ed contained key elements of the budget. Ryan's plan would:

• Achieve a total of $4.6 trillion in savings over the next decade
• Enact tax reform that closes loopholes and deductions, while reducing the number of income brackets to two — one at 10 percent, the other at 25 percent
• Change Medicare to a model in which future retirees would receive "premium supports" (Democrats call them vouchers) to subsidize the purchase of insurance from a menu of options, including traditional Medicare
• Repeal the president's health care reform law
• Approve the proposed Keystone XL transnational oil pipeline
• Enact welfare reforms to give states more flexibility in enforcing the program

There are other aspects of Ryan's plan that the Wisconsin congressman will outline tomorrow. Many elements of the new Ryan budget are familiar Republican proposals, weaved together in a comprehensive statement of governing principles. 

The new budget, however, is only the opening salvo in a budget battle that could stretch throughout much of the spring. Congress acted earlier this year to extend the debt limit through mid-May, but only on the condition that the House and the Senate each pass a budget. The Senate budget, authored by Democrats, and their first in years, is also due this week.

And the political fighting over the dueling proposals has already begun. 

"I hate to break the suspense, but their budget won't balance—ever," Ryan wrote. "We House Republicans have done our part … Now we invite the president and Senate Democrats to join in the effort."

In the raucous debate over the cuts in federal spending, also known as the sequester, which began taking effect Friday, a lot of numbers are being tossed around -- $85 billion, $42 billion, $1.2 trillion. And lots of adjectives, too -- “massive,” “deep,” “severe,” “arbitrary” and more.

You’d think that numbers would be more precise than adjectives, but there’s no agreement on the correct number to describe the size of the spending cuts required by the 2011 Budget Control Act.

The Congressional Budget Office explained last week that while the often-used figure of $85 billion “represents the reduction in budgetary resources available to government agencies this year” – the cash that would be on hand for agencies to spend -- in fact “not all of that money would have been spent in this fiscal year.”

Why is that?

Federal departments and agencies would have used some of that $85 billion to “enter into contracts to buy goods or services to be provided and paid for next year or in subsequent years,” the CBO said.

For instance, if the Navy is buying some submarines or if the Missile Defense Agency is buying new satellites, it may take them a few years to spend the money to do so.

Thus, since not all of the $85 billion would have been spent anyway in the current fiscal year, the CBO said that in fact $42 billion will be the actual size of the cut in outlays in the fiscal year which ends on Sept. 30.

And how large is $42 billion when compared to the total amount of federal outlays?

The federal government’s outlays this fiscal year will total $3.55 trillion, according to the CBO’s latest estimate. Do the arithmetic and you’ll see that $42 billion is 1.16 percent of what the federal government would have spent this year if there had there been no sequester.

A 1.16 percent cut does not seem “massive.”

But the cuts do not apply equally across the board to every single category of federal spending – even though the term “across the board” is often used to describe the cuts.

In reality, the Budget Control Act was designed to shield much federal spending from the spending cuts.

Pablo Martinez Monsivais / AP

The White House is seen through a chain-link fence where the inaugural reviewing stand once stood, Monday, March 4, 2013, in Washington, as the tear down on Pennsylvania Avenue from the inaugural neared completion.

What’s exempt is most mandatory spending -- the spending that goes to Medicare and Social Security for the old and the disabled, Medicaid and SNAP payments (“food stamps”) for the poor,  payments to low-income people in the form of tax credits, interest payments on the debt, federal employee retirement benefits, and other categories.

(The sequester does cut Medicare’s payments to hospitals, physicians, and the administrators of certain Medicare services by two percent.)

Since mandatory spending, which accounts for two-thirds of all federal spending, is mostly off limits, the spending cuts are highly concentrated on the remaining third of the budget, what’s called “discretionary spending” – the kind of spending that Congress would normally decide each year in its appropriations bills, sometimes increasing the amount spent on some items and perhaps lowering the amounts spent on others.

An example of discretionary spending: the money that goes to the National Science Foundation, which has an annual budget of about $7 billion and funds research in everything from the stickiness of spider webs to the demise of coral reefs in the Florida Keys.

In percentage terms, the CBO said, the amount available to spend for defense (other than for military personnel) will be cut by about 8 percent and the amount available for nondefense discretionary items will be cut by about 6 percent.

The Obama administration’s Office of Management and Budget has a higher estimate: a reduction in available money of 13 percent for defense programs and 9 percent for nondefense programs for the remaining seven months of this fiscal year.

Defense spending accounted last year for about 18 percent of all federal spending. Under the sequester, defense spending will bear a disproportionately large share of the cuts. And since the law gave President Obama the discretion to exempt military service members’ pay from the cuts (and he did so) the defense cuts will fall heavily on daily operations and maintenance, activities such as training missions for Navy aviators.

Finally, what about that other number that Obama used in his State of the Union address: “about a trillion dollars’ worth of budget cuts”?

Obama was referring to the full 10-year budget forecasting period and assuming that the Budget Control Act will remain in effect for the entire period.

If the automatic spending cut provisions were to remain in effect, they would reduce deficits by at least $1.2 trillion over the 10-year period from 2012 to 2021, the CBO has estimated. Total federal outlays over the next ten years will amount to $45 trillion.

This story was originally published on Mon Mar 4, 2013 10:37 AM EST

In an exclusive interview with NBC’s Meet the Press, House Speaker John Boehner said there is no easy way to stop the budget cuts -- known as the “sequester” -- that began taking effect Friday night, and voiced uncertainty over how Washington can solve the overall fiscal problems that have consumed the nation’s politics for more than two years.

“I don't think anyone quite understands how it gets resolved,” Boehner admitted in his interview with NBC’s David Gregory.

Boehner explained his strategy in the Republicans’ tax-and-spending standoff with President Barack Obama, saying that he didn’t want to “arbitrarily pull out a couple of tax expenditures” just to raise the revenue needed to avert $85 billion in spending cuts which are being made this year.

The president and many of his administration officials have warned of dire consequences to government services and national security if the sequester happens as planned.  But to avoid them and reach a deal, the president wants new tax increases, something Boehner and his fellow Republicans have insisted are off the table.

The spending cuts – which were intended to spur a bipartisan “grand bargain” on deficit reduction, entitlement reform and tax increases -- are part of the 2011 Budget Control Act which Obama signed into law.

Boehner voted for the law and urged his members to do likewise.

But now that the spending cuts are beginning, neither Boehner nor Obama wants them to continue. Yet they have been unable to reach an accord on an alternative measure.

Related: As meeting yields no breakthrough, Obama blames 'dumb' cuts on GOP, signs order

Larry Downing / Reuters

Speaker of the House John Boehner, R-Ohio, speaks briefly after a meeting with President Barack Obama at the White House March 1, 2013.

Boehner insisted that Obama should abandon his effort to get more tax increases and instead focus on spending.

“Every American, in these tough economic times, has to find a way to balance their budget. They've got to make choices,” Boehner said. “They expect Washington to live within its means and to make choices as well.”  

He said, “It's time for the president and Senate Democrats to get serious about the long-term spending problem that we have.”

And he noted that if Obama has a credible alternative to the sequester, “why wouldn't Senate Democrats go ahead and pass it?”

Obama has insisted that any plan to replace the sequester must include new tax increases, for example by changing the tax treatment of corporate jets, and by ending tax preferences for oil and gas producers.

But Boehner said Obama had already gotten his tax increase in the deal that he made with Republicans in December. “The president got $650 billion of higher taxes on the American people on January the first,” Boehner said. “How much more does he want?”

Boehner did say that a comprehensive tax reform law would be a way to spark growth. That, in turn, would produce more tax revenue for the federal government.

“American family's wages aren't growing,” the House speaker said. “They're being squeezed. And as a result, we've got to find a way through our tax code to promote more economic growth in our country.  We can do this by closing loopholes, bringing the (tax) rates down for all Americans, making the tax code fairer. It will promote more economic growth.”

Obama said Friday it may take some time before members of Congress agree to bargain with him on how to replace the spending cuts.

He told reporters that he hoped that “after some reflection, as members of Congress start hearing from constituents who are being negatively impacted… that they step back and say, all right, is there a way for us to move forward on a package of entitlement reforms, tax reform, not raising tax rates, identifying programs that don't work, coming up with a plan that's comprehensive and that makes sense.”

He said, “It may take a couple of weeks. It may take a couple of months” before that happens, but in the meantime the spending cuts will dampen economic growth and hurt federal workers who are furloughed and federal contractors who lose work.

“It's going to mean hundreds of thousands of jobs lost,” he said. “That is real. We're not making that up.  That’s not a scare tactic, that’s a fact.”

But Boehner said, “I don't know whether it's going to hurt the economy or not. I don't think anyone quite understands how the sequester is really going to work.”

The speaker said the House would pass a spending plan this week to fund the government through the end of the current fiscal year, which ends on Sept. 30, and that in his conversation with Obama at the White House Friday, the president had agreed “that we should not have any talk of a government shutdown. So I'm hopeful that the House and Senate will be able to work through this.”

Following Boehner on Meet the Press, Obama economic advisor Gene Sperling said Boehner ought to be willing to consider at least $400 billion more in tax revenue increases over the next ten years as part of a larger agreement on deficit reduction.

Sperling said Obama has already agreed to require higher-income Medicare recipients to pay higher premiums for their coverage than they now pay and has agreed to change the formula for Social Security benefits, which would in effect reduce benefit increases over time.

These were difficult concessions for Obama to make, Sperling said.

In the face of congressional Republicans charging that Obama and his aides have been exaggerating the effect of the spending cuts – with one House Republicans calling their effort “Scarequester” – Sperling said, “Nobody ever suggested that this harmful sequester – which the speaker himself said would be devastating to national security – was going to have all its impact in the first few days.”

But he argued that the spending reductions will “hurt a lot of communities that rely on military spending” and hurt public education.

As House Republicans begin to see the impact he said he hoped they “will choose bipartisan compromise over this absolutist position.”

He noted that on Saturday Obama made phone calls to both Democratic and GOP  senators to form a “caucus of common sense” and support an alternative to the spending cuts. 

The Senate Finance Committee voted 19-5 on Tuesday to report Jack Lew's nomination as Treasury Secretary to the full Senate. 

Lew's nomination moved a step closer to final confirmation before the full Senate with the finance panel's approval, though a floor vote isn't scheduled yet.

Recommended: Increasing polarization in Washington

Five Republicans joined with all of the committee's Democrats in supporting Lew. Five Republicans opposed Lew.

Sen. Orrin Hatch, R-Utah, voted yes, but criticized the administration for being reluctant to answer questions about nominees. Sen. Charles Grassley, R-Iowa, voted no, citing concerns about Lew's ties to Citigroup, which received federal bailout money.

The nation’s capital was enveloped in a familiar kind of gridlock late Monday, as Republicans again demanded that President Barack Obama and Senate Democrats act first to put off $85 billion in automatic cuts slated to take effect on Friday.

“The president says we have to have another tax increase to avoid the sequester,” House Speaker John Boehner, R-Ohio, said of the hefty and indiscriminate spending cuts. “Well, Mr. President, you got your tax increase. It's time to cut spending.”

Related: Obama to govs: Push Congress to avert cuts

As Congress returned to work following a weeklong recess, the Obama administration and lawmakers appeared no closer to resolving the automatic spending cuts before their Friday deadline. While both Democrats and Republicans bemoan the cuts as potentially catastrophic for the economy and the national defense, both sides have been locked in a virtual staring match over the sequester.

The end result is that the cuts seem likely to take effect, if only for some limited period of time, come Friday. Both sides spent Monday posturing rather than working toward a solution.

For their part, the House GOP is content to rest upon the two bills they had passed in the last Congress meant to offset the $85 billion in spending cuts with a series of additional, alternative cuts. Democrats, led by Obama, had rejected that alternative as “unbalanced” because it did not include some measure of new tax revenue.

But, buoyed by stronger approval ratings than congressional Republicans, the president has also been generally unwilling to budge from his stance that a sequester replacement would have to include new tax revenue – likely through closing loopholes and deductions – in addition to other spending cuts.

“Unfortunately, in just four days Congress is poised to allow a series of arbitrary, automatic budget cuts to kick in that will slow our economy, eliminate good jobs, and leave a lot of folks who are already pretty thinly stretched scrambling to figure out what to do,” Obama told a bipartisan group of governors at the White House this morning.

The president leaned on the governors to pressure their respective states' congressional delegations to support a compromise agreement.

Obama has relied increasingly on these public events to make his arguments to the public, pursuing a sort of "outside" strategy meant to rally pressure on lawmakers to strike deals on a range of issues. For instance, Obama will travel to Newport News, Va., on Tuesday to highlight the negative toll the sequester would take on that region's defense industry.

For their part, Republicans have derided the president as spending more time on campaigning against the GOP than working toward a deal.

"Instead of using our military men and women as campaign props, if the president was serious, he'd sit down with Harry Reid and begin to address our problems," Boehner said Monday, referencing the dire warnings of furloughed workers and potential pay cuts for some employees involved with the nation's defenses.

Boehner and the rest of the House GOP appeared no closer to relenting on their demand that any final compromise originate in the Senate. After a roller-coaster past two years in the House, in which conservative lawmakers often threatened to upset delicate agreements Boehner had struck with Obama, the speaker has adopted a strategy of deferring to the Senate on many top legislative matters.

Before the recess, Senate Majority Leader Harry Reid, D-Nev., and the rest of the Democratic leadership unveiled a sequester proposal that would offset the impending cuts with new taxes on corporations and the ultrawealthy, more modest defense cuts and additional cuts in discretionary spending.

"Congress has the power to prevent these self-inflicted wounds," Reid said Monday on the Senate floor. "We have the power to turn off the sequester."

J. Scott Applewhite / AP

House Speaker John Boehner of Ohio responds to President Barack Obama's remarks to the nation's governors earlier today about how to fend off the impending automatic budget cuts, Monday, Feb. 25 on Capitol Hill in Washington.

Amid the pessimism about the prospects for a deal, Boehner half-heartedly told reporters that "hope springs eternal" that an agreement could be reached by Friday.

"The president can sit down with Harry Reid tonight and work with Senate Democrats, who have the majority in the Senate to move a bill. It's time for them to act. I've made this clear for months now, and yet we've seen nothing," he said.

This story was originally published on Mon Feb 25, 2013 4:18 PM EST

What the sequester debate has turned into: all posturing and rhetoric -- but no action… The debate also has turned into about what Bob Woodward wrote over the weekend… GOP message on sequester is all over the place… What a busy week it will be -- Obama to VA, Hagel confirmation vote, IL-2 special, NBC/WSJ poll, and sequester deadline… And Team Obama promises additional access for big donors, contradicting a key message from ’07-’08.

*** All posturing and rhetoric -- but no action How do we know that the looming automatic cuts set to take place on Friday probably will go into effect, at least in the short term? The answer: Everything right now in this debate over the so-called “sequester” has been reduced to rhetoric and posturing -- but not action. While both the Obama White House and congressional Republicans have warned about the dangers associated with these cuts, and have blamed one another for their creation, this weekend saw no new plans of compromise, no new meetings, and no real work as Congress stayed on its recess. Nothing, and we mean nothing, seems to be imminent on even a deal to start TALKING about a deal. So this lack of urgency belies the rhetoric and posturing. If these cuts are so drastic or so ill-considered, why weren’t House Speaker John Boehner and Senate Minority Leader Mitch McConnell over at the White House this weekend? Where was President Obama’s compromise offer? But here’s what’s really going on: Both sides are laying the groundwork to see who bleeds the most after March 1 once the spending cuts take effect as a way to see who holds the negotiating upper hand. Yet here’s also the stark reality: No side has a real end game or knows how this will play out. And for now, congressional Republicans are content with status quo, which means the White House has to be willing to change the calculus during the budget talks at the end of the month. Can they?

*** Debating Bob Woodward: Another example of how the sequester fight has been reduced to rhetoric and posturing is that the central argument over the weekend was what a political reporter -- namely the Washington Post’s Bob Woodward -- wrote on Friday night. Woodward, who wrote a book about the 2011 debt-ceiling standoff, penned a WaPo op-ed contending (as he’s done before) that the sequester was the White House’s idea. But he made this (new) additional charge: that the White House is moving the goal posts, because getting revenue was never part of the sequester. Republicans gleefully circulated the Woodward piece, while the White House and liberals fought back. Our take is that Woodward is on solid footing in asserting that the sequester was the White House’s idea to deal with the GOP’s demand for spending cuts to raise the debt ceiling. But Woodward is on much shakier ground when he insists that the White House never wanted revenue to replace the sequester. After all, the whole point of the sequester and the creation of the Super Committee was the INABILITY of getting a deal on taxes. All that said, it’s never a good day when one side is debating a political reporter, no matter the ground on which that reporter is standing.

*** GOP message is all over the place: But it’s also not a good place when one side’s message is all over the place, and that’s the situation where Republicans currently find themselves in this sequester debate. In his Wall Street Journal op-ed last week, Boehner called the spending cuts “dramatic,” arguing that they threatened “U.S. national security, thousands of jobs, and more.” But then when the Obama White House began its campaign noting how deep these cuts would be, Republicans countered that the White House was trying to scare the public. And then over the weekend, Republican governors were contradicting that message. “The uncertainty of sequestration is really harming our states and our national economy,” said Oklahoma Gov. Mary Fallin (R). Added Arizona Gov. Jan Brewer (R): “We've got Raytheon [in Arizona], and we don't know exactly what that's going to do, but it's going to cost a lot of job results.” And Wisconsin Gov. Scott Walker (R): “I think there should be limited government, but I don't like random changes. If you look at my budget, I didn't do across the board cuts. A lot of times politicians talk about 10% across the board, I didn't do that.” So here’s the GOP’s muddled message: First, these cuts could cost jobs and money; second, the Obama administration is trying to scare the American people about these cuts; and third, these cuts could cost jobs and money. What’s happening here: Congressional GOPers are split. Some of the old guard of the GOP (and the leadership) believe sequester is bad and will hurt the economy and hurt the government. Some of the Tea Party types and other conservatives are so frustrated by the inability of Washington to EVER cut spending, they’d take sequester over nothing. This also explains why Boehner has not been able to put together a new sequester replacement bill.

Charles Dharapak / AP

President Barack Obama answers a question from a reporter during his meeting with Japan's Prime Minister Shinzo Abe, Friday, Feb. 22, 2013, in the Oval Office of the White House.

*** What a week that’s coming up: It’s worth noting that the debate over the sequester isn’t the only political story that will be taking place this week. As NBC’s Mike O’Brien writes, the nation’s capital “is bracing for a politically consequential week ahead,” and here are the events we’ll be watching:

Monday, Feb. 25: Obama’s remarks to the National Governors Association beginning at 11:05 am ET.
Tuesday, Feb. 26: Obama travels to Virginia to warn about the looming cuts… Our new national NBC/WSJ poll comes out… The Senate is expected to vote on Chuck Hagel’s nomination to be defense secretary… And the special Democratic primary to fill Jesse Jackson Jr.’s (D-IL) vacated congressional seat takes place.
Wednesday, Feb. 27: The Supreme Court hears oral arguments in the challenge to the Voting Rights Act
Thursday, Feb. 28: Pope Benedict XVI holds his final day as pope
Friday, March 1: Sequester cuts take effect.

*** Team Obama promises additional access for big money to OFA: When he first announced his presidential bid in Springfield, IL six years ago, Obama stressed the need to curb the influence of special interests in Washington. "The cynics, and the lobbyists, and the special interests [have] turned our government into a game only they can play,” he said. “They write the checks and you get stuck with the bills. They get the access, while you get to write a letter. They think they own this government, but we're here to take it back." But the New York Times report over the weekend -- that donors who contribute and raise $500,000 to Obama’s Organizing for Action will get special access to the president -- runs counter to that ’07 promise. If you’re a big business wanting additional contact with the president (lobbyists and PACs are precluded from donating), you’re going to pony up $500,000-plus. The Obama folks can rationalize this all they want (you’ll be disclosing the donors, you’ll also be accepting small-donor money, this is the campaign-finance world we live in after Citizens United), but offering this kind of access to big donors was PRECISELY what Obama was campaigning against in 2007-2008. Every political strategist involved in the 2012 presidential campaign on BOTH sides of the aisle believes the campaign-finance system is a mess. And yet we continue to see a perpetuation of the so-called flawed system. This is how a bad system becomes worse. Wonder what Candidate Obama would say about this?

Click here to sign up for First Read emails.
Text FIRST to 622639, to sign up for First Read alerts to your mobile phone.
Check us out on Facebook and also on Twitter. Follow us @chucktodd, @mmurraypolitics, @DomenicoNBC, @brookebrower

GOP’s weak political position on the sequester… Just look at the polls, the lack of compromise, and the message… That said, Democrats have their own sequester problems, too… Rick Scott accepts Medicaid expansion… Look who’s coming to CPAC -- almost everybody… And when it comes to politicians, almost nothing surprises us anymore. See the Pete Domenici story.

Mandel Ngan / AFP - Getty Images

House Speaker John Boehner, R-Ohio, addresses the media following a Republican Conference meeting on Feb. 5, 2013 at the Capitol. From left are: House Majority Leader Eric Cantor, R-Va., Conference Vice Chairman Rep. Lynn Jenkins, R-Kan., House Majority Whip Kevin McCarthy, R-Calif., Rep. Susan Brooks, R-In., and Conference Chairman Rep. Cathy McMorris Rodgers, R-Wash.

*** GOP’s weak position on the sequester: Yesterday we asked this question about the political back-and-forth regarding the looming automatic budget cuts that are set to take place on March 1: What if the sky doesn’t fall? But here’s the opposite question: What if it does? And if that’s the case, Republicans stand to pay the steepest political price. It’s not even close right now. For starters, look at the numbers from the first two national polls taken after the State of the Union. The new USA Today/Pew poll: “President Obama starts his second term with a clear upper hand over GOP leaders on issues from guns to immigration that are likely to dominate the year… On the legislation rated most urgent — cutting the budget deficit — even a majority of Republican voters endorse Obama's approach of seeking tax hikes as well as spending cuts.” Also in this poll, the president’s approval rating is at 51%, while the approval for congressional GOPers is at 25%. And here’s Bloomberg’s poll: “… Obama enters the latest budget showdown with Congress with his highest job- approval rating in three years [55%] and public support for his economic message, while his Republican opponents’ popularity stands at a record low [35%].” So these are the numbers when the White House’s P.R. campaign to avert the sequester has only begun and before the expected layoffs and furloughs.

*** Where’s the compromise? Besides the polling numbers, Republicans find themselves in a weak position -- politically -- because they’ve yet to propose ANY kind of compromise that recognizes they don’t control the White House or the U.S. Senate. By contrast, Obama has offered up entitlement cuts (chained CPI for Social Security is apparently still on the table), and he has indicated a willingness to make additional cuts to Medicare (he said so in the State of the Union). But Republicans are refusing to budge on any tax revenues (via closing loopholes, etc.), even though House Speaker John Boehner offered them up during the fiscal-cliff debate. “House Republicans, shrugging off rising pressure from President Obama, are resolutely opposing new tax increases to head off $85 billion in across-the-board spending reductions, all but ensuring the cuts will go into force March 1 and probably remain in place for months, if not longer,” the New York Times says. Interestingly, Karl Rove has proposed a sort of compromise for House Republicans to offer: “pass a continuing resolution next week to fund the government for the balance of the fiscal year at the lower level dictated by the sequester—with language granting the executive branch the flexibility to move funds from less vital activities to more important ones.” In other words, force the Obama administration to choose which programs and entities get funded. Of course, this comes with political risk as many Republicans will fear that the Obama administration will essentially fund what he wants at the expense of programs or projects important to Republicans.

*** A muddled message: In addition to the GOP’s poll numbers and its inability to propose a compromise, a third Republican shortcoming in this sequester debate is the message. Conservative writer Byron York sums the problem of House Speaker John Boehner describing the looming cuts as a policy “that threatens U.S. national security, thousands of jobs and more,” but isn’t earnestly trying to avoid it. “Could the GOP message on the sequester be any more self-defeating?” York asks. “Boehner could argue that the sequester cuts are necessary as a first — and somewhat modest — step toward controlling the deficits that threaten the economy. Instead, he describes them as a threat to national security and jobs that he nevertheless supports. It’s not an argument that is likely to persuade millions of Americans.” As we’ve pointed out in the past, if a party’s opinion writers -- like York and Rove -- are arguing that the party isn’t pursuing a wise course, you’re typically losing the debate.

*** Democrats have their own sequester problems: Of course, none of this is to say that Obama and the Democrats have handled the sequester politics swimmingly. The same polls that show Obama’s approval rating above 50% could easily fall during this latest fiscal standoff. What’s more, the public isn’t engaged in this battle like it has been in previous ones. (Per that USA Today/Pew poll, “barely a quarter have heard a lot about the scheduled cuts, while about as many have heard nothing at all.)  And as the New York Times notes, senior Senate Democratic aides complained that the Obama White House should have demanded a better way to handle the sequester during the fiscal-cliff negotiations. “In late December, as the White House and Senate Republicans closed in on a deal to head off a far larger wave of automatic tax increases, Senate Democrats had urged the president and Vice President Joseph R. Biden Jr. to hold out for a better deal on the automatic spending cuts.” But if the sequester sky does fall, Republicans hold the weaker hand. And Democrats -- this DCCC video targeting House Republicans is an example -- are on the offensive.

*** Rick Scott accepts Medicaid expansion: Beyond the upcoming sequester, the other big political story today is Florida Gov. Rick Scott (R) saying that his state will accept Medicaid expansion under the federal health-care law. While other GOP governors have refused the expansion (like Virginia Gov. Bob McDonnell yesterday), Scott’s decision is significant because -- as Politico writes -- he’s “the biggest symbol of grudging Republican acceptance that Obamacare is the law of the land.” More from that article: “Scott had campaigned against the health legislation even before he began running for office, and Florida led the 26 states that fought it in court.” So Scott, who’s facing a VERY difficult race for re-election next year, isn’t just simply a conservative governor of a swing state; he’s the guy who spent MILLIONS of dollars to stop the health-care law. There’s an interesting pattern developing, and one that isn’t that surprising: Just about any Republican governor in a blue or purple state that Obama carried (or nearly carried) seems to finding a way to compromise on health care, either in setting up exchanges or on Medicaid. The lone exception is McDonnell, but he’s NOT running for re-election and the next election he faces may be with Republican primary voters in 2016.

*** Look who’s coming to CPAC: Yesterday, we also learned -- via NBC’s Sarah B. Boxer -- that Mitt Romney will be addressing CPAC next month, which will be his first public (and political) speech since his concession to Obama on Election Night. And Romney’s participation begs this question: Just who isn’t coming to CPAC? Not only will potential 2016ers (like Marco Rubio, Jeb Bush, Rand Paul, Paul Ryan) be addressing the conservative confab, but so will folks many Republicans have moved on from (like Romney and Sarah Palin). The only prominent Republican we can see who won’t be addressing CPAC appears to be New Jersey Gov. Chris Christie. This is all a recognition of how mainstream CPAC, which used to be considered the anti-establishment wing of the party, has become.

*** Nothing surprises us anymore about politicians: Lastly, we mention this story because it’s proof that NOTHING -- and absolutely nothing -- surprises us about politicians anymore. “Former New Mexico Sen. Pete Domenici told the Journal on Tuesday he fathered a son outside of his marriage over 30 years ago, revealing a secret kept for decades. Statements given to the Journal by Domenici and the son’s mother, Michelle Laxalt of Alexandria, Va., identified the son as Adam Paul Laxalt, a Nevada lawyer. Michelle Laxalt formerly was a prominent government relations consultant and television political commentator in Washington, D.C. She is a daughter of former U.S. senator and Nevada Gov. Paul Laxalt,” who served with Domenici in the U.S. Senate. A little history lesson on Laxalt for our younger readers: He was essentially Ronald Reagan’s best friend in the U.S. Senate (almost on the ticket if you believe some reports back in 1980). And Domenici was a real possibility to be Bush 41’s VP in 1988.

Click here to sign up for First Read emails.
Text FIRST to 622639, to sign up for First Read alerts to your mobile phone.
Check us out on Facebook and also on Twitter. Follow us @chucktodd, @mmurraypolitics, @DomenicoNBC, @brookebrower