Sen. Kelly Ayotte Keeps Door Open for 'Big Agreement' on Budget
PHOTO: Sen. Kelly Ayotte, R-N.H., appears on "This Week with George Stephanopoulos."

While the White House and Congress failed to reach an agreement to avoid automatic spending cuts that began taking effect on March 1, Sen. Kelly Ayotte, R-N.H., said she is still open to the idea of a "big agreement" to address the country's long-term fiscal challenges, as long as it addresses both tax reform and entitlement reform.

"If we're going to increase revenue again it's got to go to the debt with real entitlement reform and real tax reform, where you actually lower rates," Ayotte told me this morning on "This Week." "Absolutely I think we need to do a big agreement for the country. Because we haven't dealt with the fundamental drivers of our debt."

When asked if she would accept a larger agreement that raises tax revenues, Ayotte said she would not agree to tax increases that "increase more government," but only if they are applied to reducing the debt.

"I am willing to say if we take the form of lowering rates, so that we can focus on economic growth, and then we take a portion of that and apply it to the debt with real entitlement reform - but it has to go to the debt," Ayotte said. "This sequester has to be dealt with within existing spending and alternative cuts, and we need real entitlement reform and real tax reform. That's what we need for the country if we're going to drive down our debt and also be focused on economic growth."

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White House economic adviser Gene Sperling said the sequester process is "not going to hurt as much on day one," but he said he believes the "slow grind" of the cuts' impact may force sides back to the bargaining table for a larger agreement.

"My belief is that as this pain starts to gradually spread to communities affected by military spending, to children who need mental health services, to people who care about our border security, I believe that more Republican colleagues who are concerned about this harm to their constituents will choose bipartisan compromise on revenue raising tax reform with serious entitlement reform," Sperling said this morning on "This Week."

Sperling called unwillingness by Republicans to avoid the sequester by closing tax loopholes and deductions "an unreasonable position," and said the failure to reach a deal to the avert automatic spending cuts this week was "not a win for anyone."

"This is not a win for Republicans," Sperling said. "Republicans are supposed to be for stronger national defense. This cuts our military preparedness dramatically. They're supposed to be for border security. These sequester cuts will end up meaning enough reduction in hours that would be the equivalent of 5,000 border patrol agents being cut. They're supposed to be long-term entitlement reform. This does no long-term entitlement reform."

Sperling rejected the idea that the administration could have softened the impact of the automatic spending cuts by creating more flexibility on what areas could be cut from each government agency that will be impacted by the $85 billion sequester.

"There is no way that you can move the deck chairs around in a way that will not cost our economy, as CBO projects, 750,000 jobs," Sperling said. "When you have those type of harsh spending cuts in such a short concentrated period of time, it's like saying to somebody you can cut off three of your fingers, but you can have the flexibility to choose which ones you want to cut off."

But Ayotte countered that alternative spending cuts should have been found to reduce the impact on the country.

"Why can't both sides work together to do this in a more sensible way?" Ayotte asked. "There's a whole host of ideas of how we could cut spending in a more responsible way that doesn't undermine our national security."

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