By Erik Wasson
CAP sees this as a compromise way to get around Democratic demands for a balanced deficit solution and Republican arguments against future tax increases.
“The American Taxpayer Relief Act, better known as the fiscal cliff deal, enacted about $800 billion in deficit reduction from 2013 to 2023, or about 60 percent of the total deficit reduction achieved by the sequester over that period. Had that same deficit reduction come about through the super committee process, it would have reduced the impact of the sequester to only about $500 billion rather than the currently projected $1.3 trillion,” the Center argues in its Thursday report.
“Recognizing this, our plan offsets only the remaining 40 percent of the sequester that has not been paid for already,” it states.
CAP then proposes a series of spending cuts as well as more tax increases to make up that 40 percent. This part of the plan closely resembles the House Democratic sequester replacement bill they have been promoting.
The tax increases consist of implementing a minimum tax on the wealthy known as the Buffet rule as well as ending oil and gas tax breaks.
The group calls on Congress to implement $40 billion of cuts to farm subsidies, even though both the House and Senate are moving farm bills this month that cut far less.
The group would get $50 billion in cuts to healthcare spending by “increased competitive bidding” and $50 billion from aligning Medicare provider payments with “actual costs.”
The group would use $82 billion of this savings for a new stimulus program. This includes infrastructure spending, early childhood education and a “Pathways Back to Work Fund,” which “would help provide employment opportunities for the long-term unemployed, young people, and low-income people.”