Following last month's agreement on a temporary extension of the federal debt limit, Congress is now confronted with the prospect of $1.3 trillion in automatic spending cuts -- called sequestration -- scheduled to begin March 1.
The cuts would slice equally across defense and domestic spending and take substantial government funding out of the economy.
In an appearance on ABC's "This Week," Reid said any new deal to avoid the sequester must include new revenue.
"The American people need to understand that it's not as if we've done nothing for the debt. $2.6 trillion already we've made in cuts. And all those cuts have come from non-defense programs," he said. "We need to keep our eye on the prize and continue doing something about spending, but I think that what we need to do is do some of the things that Mitt Romney talked about. He said there's some low-hanging fruit; there are a lot of tax loopholes that should be closed. I agree with him. We haven't done that."
Reid pointed to oil subsidies and overseas jobs as a possible source of revenue.
"We have issues dealing with shipping jobs overseas. Why don't we ... fill some of these? We can dial that however we want, because it's a huge loss of revenue," he said.