But that plan was met with an icy reception by Republicans, who oppose raising taxes to offset the cuts. GOP leaders say the president got the tax increases he wanted at the beginning of the year when Congress agreed to raise taxes on family income above $450,000 a year.
The White House said Obama on Tuesday would call on congressional Republicans to compromise and accept the Senate Democrats' proposal.
The Democrats propose to generate revenue by plugging some tax loopholes. Those include tax breaks for the oil and natural gas industry and businesses that have sent jobs overseas, and by taxing millionaires at a rate of at least 30 percent.
A spokesman for House Speaker John Boehner said the Ohio Republican agrees the sequester is a bad way to reduce spending, but put the onus for averting the cuts on Democrats.
"A solution now requires the Senate — controlled by the president's party — to finally pass a plan of their own," spokesman Brendan Buck said.
Meanwhile, a bipartisan proposal Tuesday by co-chairs of an influential deficit-reduction commission called for reducing the deficit by $2.4 trillion over the next 10 years, with much of the savings coming through health care reform, closing tax loopholes, a stingier adjustment of Social Security's cost of living increases and other measures.
Some Republicans, including House Budget Committee Chairman Paul Ryan, R-Wis., have advocated plugging loopholes, but as part of a discussion on a tax overhaul, not sequestration.
"Loopholes are necessary for tax reform," Ryan said Sunday on ABC's "This Week." ''If you take them for spending, you're blocking tax reform and you're really not getting the deficit under control."
The sequester was first set to begin taking effect on Jan. 1. But as part of the "fiscal cliff" negotiations, the White House and lawmakers agreed to push it off for two months in order to create space to work on a larger budget deal.
With little progress on that front in recent weeks, Obama is calling for the sequester to be put off again, though it's unclear whether another delay would have any impact on the prospects for a broader budget agreement.