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White House not "hopeful" sequester will be averted

Senior administration officials do not expect the spending cuts to be averted; they expect them to happen.

"It doesn't look hopeful that we will resolve this before Saturday," said one senior official who briefed reporters Tuesday afternoon.

The White House does detect some differences emerging among Republicans and pointed to comments from Sen. Lindsey Graham, R-S.C., and Rep. Scott Rigell, R-Va., who flew with President Obama to Virginia on Tuesday.

Graham has called for up to $600 billion in new revenue from tax reform if it is combined with entitlement reform. Rigell said he opposes the GOP position of refusing to raise taxes in pursuit of an alternative to $85 billion in discretionary spending cuts. 

"I believe that a position that says we will reject a proposal if it has even a dollar increase in revenue, I don't think that's a wise position and I don't hold that value," Rigell said today before President Obama's remarks.

"There seem to be some cracks among Republicans," said one official. "There is some division there."

White House officials said it was "hard to predict" when the standoff would be resolved. They said Obama will not budge and the only outcome he will accept is a GOP cave on higher taxes.

"Until they are willing to accept that revenue has to be part of this deal, it's not going to happen," one official said.

"We know where this ends, which is an agreement that includes balance," said one official. "We just don't know when."

The officials also said there would be little use in giving the administration flexibility on where and how to impose the cuts. They said the macro-economic effect of reducing federal spending by $85 is still the same - whether if done by across-the-board spending cuts or through ones the administration has discretion to impose.

Even with flexibility, officials said the cuts would be "terrible" and "inescapably bad" for the economy.

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