Buffett Rule included in Senate Democrat’s plan to avert looming sequester
Senate Democrats unveiled a plan Thursday to avert billions of dollars in looming budget cuts, but Republicans are opposed to raising new revenue amid pessimism over meeting a March 1 deadline.
The plan aims to raise half of the $110 billion needed this year to replace the mandated cuts to defense and domestic spending known as the “sequester” that also calls for raising new revenue.
The so-called Buffett Rule, which would require a 30 percent minimum tax on millionaires, would raise most of the $55 billion on the tax side.
The sequester replacement would also include “modest reductions” in the level of defense spending over a decade, amounting to $27.5 billion in savings, while an equal amount would be saved by ending agriculture subsidies to farmers known as direct payments.
“Today, Senate Democrats offered a balanced plan to avoid across-the-board budget cuts that will hurt kids, seniors and our men and women in uniform,” White House spokesman Jay Carney said in a statement.
“Now, Republicans in Congress face a simple choice. Do they protect investments in education, health care and national defense, or do they continue to prioritize and protect tax loopholes that benefit the very few at the expense of middle and working class Americans?”
Lawmakers and the White House have struggled to strike a deal to slash some $4 trillion from the swelling national debt.
They failed to reach agreement on a comprehensive package to avert the so-called “fiscal cliff” by December 31 last year, opting instead for tax hikes on annual income above $400,000 and a two-month delay on the sharp cuts.
This new deal “is just to get us through the end of the year, that’s all it is,” Democrat Tom Harkin told reporters.
Republican senators have offered plans of their own, including one that would save billions by relying on attrition of the federal workforce. And the Republican-led House passed sequester-replacement legislation last year that focused on targeted spending cuts.
But Democrat Patty Murray, chair of the Senate Budget Committee and the pointwoman on the new plan, said some Republicans appear resigned to allow sequestration to come into force.
“We are putting forward a responsible plan; the Republicans are saying ‘no, let (sequestration) take effect,'” Murray said.
House Speaker John Boehner declined to comment specifically on Murray’s plan, saying his party would look closely at any bill that passes the Senate.
But he has previously suggested that a bill with tax increases would go nowhere in the House, and said the nation was likely to face the steep cuts come March 1.
“The sequester will be in effect until there are cuts and reforms that put us on a path to balance the budget in the next 10 years, period,” Boehner told reporters.
Economists and groups like the Center on Budget and Policy Priorities have warned that such drastic steps would require a shutdown of parts of the government and cause severe damage to the economy.
Democratic Senator Ben Cardin acknowledged “we’re not close” to striking a deal that could get backing from Republicans, and that “it’s very likely that we will get to March 1st without a resolution.”