Senate Democrats proposed a $110 billion plan Thursday to cut projected budget deficits and replace automatic spending cuts scheduled to take effect March 1.
The Democrats called for a combination of cuts in projected spending and tax increases, echoing President Barack Obama’s demand that any alternative include tax increases and but all but dooming it among Republicans. In fact, it may have worsened the prospects for avoiding the looming spending cuts.
Democrats run the Senate and hope to vote on their package the week of Feb. 25. Their proposal would allow the government to avoid the $85 billion in across-the-board fiscal 2013 cuts known as the sequester.
Instead, it would replace 10 months of sequestration with new taxes and different spending reductions spread out over 10 years.
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The plan includes $55 billion in new tax revenue from a minimum 30 percent tax on most millionaires and ending some oil industry tax breaks and a benefit that encourages companies to ship jobs overseas. Another $55 billion would be saved by cutting $27.5 billion from defense – exactly what is not specific – and saving $27.5 billion by ending direct payments to farmers. All savings are calculated over a 10-year period.
The White House praised the plan. “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. The plan includes spending cuts that won’t harm middle-class families while closing tax loopholes that benefit the wealthiest,” said Press Secretary Jay Carney.
But the package faces at least two huge hurdles.
It probably would need 60 votes to clear procedural hurdles in the Senate. Democrats control 55 seats, and Republicans have made it clear they’re in no mood for more taxes.
Even if the proposal were approved, it still would need to be passed by the Republican-led House of Representatives, which would barely have time to consider or change the measure.
Senate Budget Committee Chairwoman Patty Murray, D-Wash., insisted that once lawmakers hear from constituents, and the impact of the sequester becomes clearer, Republicans will soften their position.
“We have a week and a half to get public support with us,” she said.
Republicans weren’t buying that.
“This is not a solution. Even they know it can’t pass, that’s the idea,” said Senate Republican leader Mitch McConnell of Kentucky. “It’s a political stunt designed to mask the fact that they’ve offered no solutions and don’t plan to offer any. And it’s a total waste of time.”
In the House, Speaker John Boehner told reporters, “When the Senate passes a plan, we’ll be happy to look at it. Until they pass a plan, there’s no reason for me to comment on what they could do.”
He reiterated his opposition to higher taxes. “The sequester will be in effect until there are cuts and reforms that will put us on the path to balance the budget in the next 10 years, period,” the Ohio Republican said.
The partisan sniping reinforced a growing sense on Capitol Hill that the sequester is going to take effect, cuts the White House maintains would have a severe impact on the military and domestic programs. Asked if he had talked to Senate Majority Leader Harry Reid, D-Nev., Boehner said, “I told Senator Reid this morning the same I’ve told you, pure and simple.”
House Republicans are pushing an alternative that passed the House twice last year. But in two votes, that plan didn’t get a single Democratic supporter. It slashed programs championed by Obama, including a fund to implement the 2010 health care law as well as housing programs, food stamp program increases and other domestic initiatives.
In the Senate, a group of Republicans led by Sens. John McCain of Arizona and Lindsey Graham of South Carolina is pushing an alternative that would reduce the federal workforce by attrition, but that plan appears to be going nowhere.
Congress plans to recess Friday and not return until Feb. 25, four days before the sequester goes into effect. Pessimism is growing.
Few Democrats left a two-hour briefing on the Senate plan upbeat. “It’s likely we’ll hit March 1 without anything being passed,” said Sen. Ben Cardin, D-Md., “Very likely.”