In just a few weeks, the nation will be facing yet another manufactured fiscal crisis when a series of harsh across-the-board federal spending cuts in education, defense and all government operations go into effect unless Congress repeals them. 

Known as “sequestration,” economists say these cuts would imperil the fragile economic recovery and cost as many as 1 million of America's workers their jobs. Yet Republicans are making threats to let those cuts take effect on March 1 unless Social Security, Medicaid and Medicare benefits are cut or drastic cuts are made to vital services.

Says Sen. Sheldon Whitehouse (D-R.I.), who is soon to introduce legislation to stop sequestration:     

We should make every effort to prevent this needless, self-inflicted harm. Many Republicans have said they want the sequester, as part of their clamor for "austerity." In Europe, countries that responded to the economic downturn by slashing their budgets suffered shrinking economies and persistent double-digit unemployment rates. But the failure of austerity in practice does not deter our Republican colleagues.

The looming threat of sequestration is the result of an earlier episode of Republican hostage-taking in the summer of 2011, when Republicans in Congress threatened to cause a U.S. government default unless they got their way in budget negotiations. Says Whitehouse:  

We can reduce our deficit and do it in a much more balanced way than sequestration, simply by fixing our tax code to get rid of needless giveaways.

Sen. Whitehouse’s proposals to close tax loopholes would generate more than $1 trillion in new revenue over 10 years—more than the $960 billion total amount of sequestration cuts. His proposals include:

• Implementing the Buffett Rule, which would require millionaires to pay at least a 30% effective tax rate;
• Reducing tax incentives for sending jobs overseas;
• Implementing a modest 0.03% financial speculation tax on Wall Street trading in stocks, bonds and other complex financial products to discourage destabilizing high-frequency trading;
• Assessing a financial crisis responsibility fee on the largest financial institutions to let the financial sector pay back taxpayers for the financial crisis; and
• Limiting the extra benefit of tax deductions for the richest 2% of Americans.

He also points out that despite Republican rhetoric, the Budget Control Act of 2011 and other cuts enacted in the last Congress have reduced the deficit by $2.4 trillion, with $1.7 trillion of that deficit reduction coming from spending cuts and related interest savings, and only $700 billion coming from new revenues, and none of those new revenues coming from closing tax loopholes, which not too long ago was a cornerstone of Republican deficit reduction strategy. Whitehouse says:

Is keeping Big Oil happy with subsidies from the American people more important than addressing our deficit? Should a billionaire who makes a multimillion-dollar gift to a museum receive more tax bang for his charitable buck than a middle-class family who gives to their local church? And is protecting these special-interest tax giveaways more important than addressing the deficit?