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Showdown in Congress over federal deficit

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CNY/NNY/S. Tier: Showdown in Congress over federal deficit
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A new month is nearing and it means a new showdown in the nation's Capitol, focused on how to reduce the federal deficit. YNN's Bill Carey says democratic lawmakers from New York are growing concerned about the impact of potential cuts set to begin taking effect on Friday.

SYRACUSE, N.Y. -- Again, the clock is ticking in Washington. And again, no easy solution seems within reach.

This time it isn't a fiscal cliff, but a so-called "sequester." It was designed as a package of cuts so severe that it would force the two sides to reach a deficit reduction compromise. So far, no deal.

“We cannot give up. We have to try to come to a deal on this. I'm now on the Armed Services Committee and I can tell you that this is not insignificant, in terms of our national security. We just can't, as public officials, do this, jeopardizing our national security, jeopardizing the ability to create new jobs. It's just irresponsible,” said Congressman Dan Maffei.

The cuts will roll out over several months. The impact will hit hardest on defense, with civilian jobs in the military at risk, as well as jobs dependent on federal contracts.

On the domestic spending side, everything from education and day care services to air travel and security, could be at risk.

“I would hope that people on both sides of the aisle would come to the conclusion that, both on the military side and on the spending side, there's a lot better ways to cure the deficit, which we should cure, than these devastating and harmful cuts,” said Senator Charles Schumer.

Schumer says that closing some tax loopholes would help to ease some of the more devastating cuts. He wants to end tax breaks for companies moving jobs overseas, as well as closing loopholes that hold down taxes paid by wealthy Americans. He is also targeting one major business sector.

“To prevent continued tax breaks for oil companies. They're making billions of dollars. Oil is at record high prices. They don't need any tax breaks to encourage them to explore for oil,” Schumer said.

While all sides on Capitol Hill say they are still open to talks, there is growing pessimism that the March 1st deadline for avoiding the sequester will not be met.

Democrats, for now, are arguing that this is no time to just wait and see what happens.

Maffei said, “Whether it will be bad or very bad, we need to avoid it.”

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