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Senate Minority Leader McConnell Says Spending Must Be Cut

Jan. 6 (Bloomberg) -- Senate Minority Leader Mitch McConnell said now is the time for the U.S. Congress to cut government spending.

Speaking in an interview on ABC’s “This Week” program, the Kentucky senator said Congress has finished dealing with taxes.

“The tax issue is finished, over, completed,” McConnell said on ABC. “Now the question is what are we going to do about the biggest problem confronting our country and our future and that’s our spending addiction.”

Markets rallied last week following passage of a law raising income-tax rates on couples to 39.6 percent for annual income above $450,000 while extending tax cuts for lower incomes and delaying automatic spending cuts until March 1.

Less than a week after a compromise that averted the package of spending cuts and tax increases known as the fiscal cliff, President Barack Obama and congressional Republicans are staking out positions for future negotiations over the budget and the debt ceiling.

The U.S. reached its $16.4 trillion legal debt limit on Dec. 31, and the Treasury Department began using extraordinary measures to finance the government. It will exhaust that avenue as early as mid-February, the Congressional Budget Office says.

McConnell said Republicans should use this opportunity to engage Obama and Congressional Democrats in a discussion on cutting spending.

“Until we address the entitlement programs and make the eligibility for entitlements meet the demographics of our country, we can’t ever solve this problem,” McConnell said.

Yesterday, Obama said that any reductions in spending should come alongside higher levies on rich Americans and companies by changes to the tax code.

“Spending cuts must be balanced with more reforms to our tax code,” Obama said in his weekly radio and Internet address. “The wealthiest individuals and the biggest corporations shouldn’t be able to take advantage of loopholes and deductions that aren’t available to most Americans.”

The message echoed a call that Obama made to campaign supporters on Jan. 2 favoring a “balanced approach” to deficit reduction.

To contact the reporter on this story: Cheyenne Hopkins in Washington at chopkins19@bloomberg.net

To contact the editor responsible for this story: Ann Hughey at ahughey@bloomberg.net

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