Avoiding the "sequester" is "round three" in the debt-reduction debate, former Clinton Treasury Secretary Lawrence Summers told CNBC Tuesday, arguing for a "balanced approach" because President Barack Obama has agreed to more spending cuts than revenue during the process.
In a "Squawk Box" interview, Summers said the funding constraints of the Budget Control Act of 2011 — which resolved that year's debt ceiling crisis — were round one. "You had spending cuts that were far larger from the discretionary side, that were far larger than anything [on revenue] that happened in December. Right now, we're way in balance toward more spending cuts."
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Republicans don't count the 2011 reductions because they feel they were in exchange for raising the borrowing limit. GOP leaders look at the new year tax increases they accepted to avoid the "fiscal cliff" as their compromise and now want spending cuts.
Favoring the president's view, Summers said the goal should be to replace the "meat cleaver approach" of the across-the-board spending cuts of the sequester. "This should be brought to a conclusion. It should be brought to a conclusion with balance. That means doing things on the spending side. That means doing things on the revenue side."
He added, "The president was very clear in December ... that he wanted to close [tax] loopholes. And in that context, he was prepared to take a hard look at containing the growth of health care costs by looking very hard at Medicare."
"[The] president's been very clear, that offer is still on the table," Summers concluded.
—By CNBC's Matthew J. Belvedere; Follow him on Twitter @Matt_SquawkCNBC