Senate Democrats’ Plan to Fix Sequester in FY’13 Would Retain Some Defense Cuts
Defense spending would be reduced by $27.5 billion over a seven-year period, rather than $40-plus billion all in fiscal 2013, under the plan Senate Majority Leader Harry Reid (D-Nev.) outlined Thursday to replace the $85 billion in government-wide spending cuts slated to go into effect March 1.
Half of the $110 billion plan would be made up of spending reductions, with the other $27.5 billion in cuts coming from the elimination of direct subsidy payments to farmers. The other $55 billion would consist of increased tax revenue, with the majority generated by a new 30 percent tax on adjusted gross income. The millionaire’s surtax would be phased in on income between $1 million and $2 million, reported CQ News.
The measure would reverse the $85 billion in budget cuts scheduled for the current year and an additional $25 billion in automatic cuts that would take effect in the first three months of FY 2014.
Reid said the Democrats’ plan, along with a competing proposal from Senate Republicans, would be taken up by the chamber when it returns from the Presidents Day recess. Senate Minority Leader Mitch McConnell (R-Ky.) has not yet released his plan to replace the sequester.
House and Senate Republicans are opposed to increasing taxes to replace any portion of the sequester, calling into question the chances for the Senate Democrats’ bill to become law.
The defense cuts in the Democrats’ plan would amount to about $3 billion in fiscal years 2015 and 2016 and slowly rise to $5 billion in 2021, according to the story.