(CNN) - Senate Democrats are working on a temporary measure, which includes new tax measures, to avoid steep automatic spending cuts looming on March 1, CNN has learned.
While a source familiar with the plan did not specify any cuts that would be part of the package, he did outline three areas for possible revenue increases to be proposed "in the next couple of weeks."
The source added Democrats are considering measures of varying lengths to delay the severe spending reductions set to kick in within a few weeks: A three-month plan or others that would last either seven or 10 months.
Senate Armed Services Chairman Carl Levin told reporters on Thursday that it is important to delay the cuts, known as sequestration, for both defense and non-defense programs.
He said Senate Democrats are working on a proposal.
"There's a lot of work going into a plan," the Michigan Democrat said.
The first tax proposal includes an increase in taxes on the so-called "carried interest" income paid to private equity firms. Because their earnings are considered capital gains, it is now treated as such-with a top tax rate of 20 percent, a rate lower than that paid by most in the middle class.
The next area Democrats want to mine for money is losing tax incentives for offshoring.
Levin said he would share some proposals regarding this with his Democratic colleagues.
"There's corporations in this country that ship their revenues and their profits offshore to avoid paying taxes on it," Levin said. "I hope that's part of a Democratic approach to avoiding sequestration (the automatic spending cuts).
"It is unconscionable that we lose hundreds of billions of dollars of revenue because some corporations in this country avoid paying taxes by shipping their revenue overseas, to tax havens, to avoid paying taxes on it. And we should collect those taxes," he said.
Finally, the source said that Democrats want to remove what he called the "John Edwards tax incentive."
That's shorthand, he added, for taxpayers who describe themselves as an "S-Corporation" as a way to avoid paying payroll taxes.
The source said Democrats could save $20 billion over 10 years. Edwards used that rule after leaving the Senate to avoid paying self-employment taxes while he was in private law practice.
Levin said it is important that any new tax revenue to be part of any deal to put off the automatic cuts.
Earlier this week, Obama said he would like at least a temporary solution to the spending cuts set for March 1-and added that it would have to have a balance between taxes and spending, which is what Senate Democrats say they are proposing.
Congressional Republicans have said they will not support any new revenue measures as a part of a deal.
– CNN Senior Producers Ted Barrett and Kevin Bohn contributed to this report
Remember we're in this mess because under republican file as president most of everything that government did was unfunded including wars,tax cuts and Medicare Part D..You can't have it both ways when in any situation more is going out than coming in that's not sucessful and republicans since Hoover have been guilty of it..Reagan on the other hand just cut all programs to the middleclass,poor by 70% to fund his idiotic Star Wars project that was finally mothballed but spent billions before doing so..And how Reagan with Allan Greenspan were the original thieves that stole from SocialSecurity to balance the budget ...Just check out how your hero Reagan how he screwed our country but was never impeached because our country would have never let another republican in office if they threw two consequent presidents out of office before their terms ended,a truth most of republicans including posters here fail to realize..Just read about your partys presidents,all failures from Hoover on but you keep picking them don't you so what does that say about republicans in general,I'll leave that with you!!
....."CARREID INTEREST" .....is the SCAM that Romney used to pay 13% on HALF BILLION IN EARNINGS.....
Tax hike only to rich–not middle income groups, please. Cutting spending now is unwise.
taxes were raised just a month ago. It is time for the Senate democrats to start by looking to reduce spending, plain and simple. If they would like to reform the tax system, that can be done on it's own. Pass a budget, which has not been done in over 3 YEARS.
20 billion????? Obama spends that, in a single day.
Get real guys, or go home!
What's a person to do? Dammed if you do and dammed if you don't.
Even more taxes, but no spending cuts. They ignore the fact that the public by 83% say that we do have a spending problem that must be brought under control.
Coming soon, another tax increase for you.
All these are small beer and do not fix the problem simply delay it. Dems are not listening republicans want a serious budget and actually so do voters and the president he said recently he still wanted to work on the big deal with house republicans and senate democrats should get behind a meaning ful budget thats more difficult tax wise for Republicans to vote against like a reduction in corportae taxes and eliminating loopholes and tax breaks as was proposed by Bowles simpson. My only caveat would be stagger the reduction from 35% corporate tax to 28% over budget years 2013/ 2014 and 2014 2015 and 2015/2016. It pays for itself per Bush research and the gain can go to education and infrastructure spend to create jobs... it is especially good for small businesses, and eliminate uncertainties in the business community.
defense stick with the 250BN the house proposed and dems to match the $259 bn with spend cuts and savings.
Get real lower debt = lower interest costs and is a saving.
Where are the spending cuts Obama campaigned on?
"While a source familiar with the plan did not specify any cuts that would be part of the package, he did outline three areas for possible revenue increases to be proposed "in the next couple of weeks."
Typical Dems, never touch the spending, but always willing to pick your pockets.
As the storm brews out east, flocks of reporters roam the streets looking for that rare Democrat with his hands in his own pockets.
Screw the gop ,they lost the election and will lose bigger in 2014 mid terms unless the dumb southern voters like to pay them for doing nothing while you have to slave away at your jobs while your gop congressman keep your pay low with their union busting .wake up !!!!