WSJ: White House re-evaluating sequester cuts

The White House is in "advanced internal discussions" on a plan to replace the deep "sequester" cuts that are set to begin next month with a smaller package of spending cuts and tax increases, The Wall Street Journal reported Friday.

The sequester cuts, which begin taking effect in January, would slash $100 billion from the federal budget next year and continue for eight more years, affecting numerous federal programs, including defense spending, education and state aid.

"By postponing the sequester cuts, Washington would essentially push off a number of large deficit-reduction decisions into mid-2013," the Journal reported, quoting people familiar with the talks. "This would include a long-term plan to replace the remaining sequester cuts, a plan to overhaul the tax code, and separate decisions about how to restructure Medicare and Medicaid."

The sequester cuts were locked in place in 2011 in a compromise aimed at prodding Congress to negotiate at least $1.2 trillion in deficit reduction measures through a now-defunct bipartisan Super Committee. The panel failed to reach an agreement by its self-imposed November deadline last year.

The report comes as Congressional leaders of both parties were scheduled to meet at the White House Friday to discuss ways to avoid the sequestrations.