WASHINGTON Feb 14 Democrats in the U.S. Senate
on Thursday rallied around a $110 billion tax increase and
spending cut plan that would postpone more severe automatic
spending cuts set to begin on March 1.
The proposal, which is expected to get shot down by
Republicans who oppose raising taxes any further to reduce
budget deficits, might never come to a Senate vote. But some of
its components could be included in future budget negotiations.
Before the plan was formally unveiled, Senate Republican
leader Mitch McConnell called it "a political stunt" and "a
total waste of time."
The Senate Democrats' plan would cancel the across-the-board
spending cuts, known as a sequester, through Dec. 31. The cuts
would be revived in January 2014 unless replaced as part of a
more comprehensive deficit reduction deal.
Under the Senate Democrats' plan unveiled on Thursday, all
of the new military spending cuts due to begin on March 1 would
be put off until fiscal 2015, when the war in Afghanistan is
expected to draw to a close.
About $27.5 billion in replacement military cuts would
start in 2015 and be spread over seven years, according to a
summary of the Democrats' plan.
Another $31 billion in spending cuts over 10 years would be
achieved by ending direct farm subsidy payments.
"I think our caucus is very supportive of replacing the
sequester with a fair and balanced approach," Senate Budget
Committee Patty Murray told reporters.
If Congress fails to act, about $85 billion in
across-the-board spending cuts begin on March 1 and continue
through Sept. 30 as part of a decade-long $1.2 trillion budget
savings plan. Half of the cuts would be shouldered by the
Defense Department and the other half would be scattered among
many other government agencies.
The non-partisan Congressional Budget Office has estimated
that if fully implemented, these budget cuts would hold back
U.S. growth and prevent the creation of about 750,000 jobs this
But with Democrats and Republicans far apart on how to
replace the automatic cuts, they are widely expected to go into
effect on March 1. In subsequent weeks a replacement measure
could be negotiated at the same time Congress works on a deal to
fund government agencies that run out of money on March 27.
On the tax side, Senate Democrats say they would raise $54
billion over a decade by setting a new minimum 30 percent tax
rate for the wealthy. Known as the "Buffett Rule," it would be
applied to taxpayers with adjusted gross incomes over $1
million, after subtracting charitable contributions.
It would be aimed at those who pay less than a 30 percent
average tax rate in combined income tax, alternative minimum tax
and the employee's portion of the payroll tax. The Buffett Rule,
named after billionaire Warren Buffett, who has promoted it,
would be phased in for those with annual incomes of $1 million
to $2 million.
Two other tax hikes would eliminate a break that Democrats
say encourages companies to move jobs overseas and a tax
loophole enjoyed by the oil industry.
The latter would include oil from tar sands among the
petroleum products that are subject to taxes that support an oil
spill liability trust fund, according to the Democrats' summary.
In the House of Representatives, Democrat Chris Van Hollen
has introduced similar legislation to replace the automatic
sequester cuts through Dec. 31. But Republicans who control the
chamber have rejected four of his attempts to attach the
proposal to other legislation.