Budget

Senate Democrats offered an alternative Thursday to the sequester, the automatic, across-the-board spending cuts set to hit March 1.

Despite dire warnings in congressional hearings this week, many on Capitol Hill seem resigned to the sequester.

White House / YouTube.com

President Obama spoke from the White House on the nation's finances and the looming March 1st deadline for the 'sequester.'

(We updated the top of this post at 1:30 p.m. ET.)

Looking to head off deep, automatic spending cuts set to kick in on March 1, President Obama on Tuesday afternoon said that to avoid the negative economic effects that come with "political disfunction," Congress should move quickly to pass "a smaller package of spending cuts and tax reforms" that won't hurt the economy.

As if the federal budget process isn't confusing enough, now we get the fog of partisan war created by the charges and countercharges flying between congressional Democrats and Republicans.

Republicans accuse the Democrats who control the Senate of shirking their duty by not producing "a budget" in recent years; Democrats accuse Republicans of not telling the whole truth.

What's going on? Here are five points to consider.

1) The Budget Control Act

Update at 1:25 p.m. ET: By a vote of 285-144, the House just passed a Republican plan that postpones for three months the federal government's next bump up against the so-called debt ceiling.

As we said earlier, the measure would head off another big battle over raising the government's borrowing authority — such as the one in 2011 that almost led to a government shutdown.

The Senate picked up Tuesday exactly where it left off nearly three weeks ago. By a twist of the rules, the Senate chamber remains in its first legislative day of the 113th Congress.

Senate Majority Leader Harry Reid, D-Nev., said he's kept things at the starting point so that he and his fellow Democrats have the option of changing the rules on the filibuster by a simple majority vote.

"The Senate will take action to make this institution that we all love, the United States Senate, work more effectively," Reid said Tuesday. "We'll consider changes to the Senate rules."

Chief Justice John Roberts wants everyone to know the federal judiciary is doing its part to keep down government costs. Roberts used his year-end report on the state of the courts to point out that the judicial branch consumes "a miniscule portion of the federal budget" — about $7 billion in fiscal year 2012, or two-tenths of 1 percent of the total government budget.

Virtually everyone agrees that allowing the nation to fall off the fiscal cliff would be a bad thing.

Government programs would be cut, taxes would rise significantly on a majority of Americans, and according to the Congressional Budget Office, the economy would fall back into recession.

But get this: Even if all of those things happen, there would still be a budget deficit.

Here's one thing President Obama and Republican presidential candidate Mitt Romney could agree on during their first debate this week: Something has to be done about the enormous gap between what the federal government collects in taxes and what it spends.

But the two men fundamentally disagree on what to do about that budget deficit.

The Problem

The White House Friday released a report detailing, in part, what life would look like on the other side of the fiscal cliff, which could occur at the end of the year.

Under orders from Congress, the administration detailed exactly how it would administer painful cuts to both defense and domestic programs that were ordered under last year's budget deal.

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