House Dems propose $120 billion deficit bill to avoid sequester

By Mike Lillis - 02/14/13 05:41 PM ET

House Democrats on Thursday introduced a $120 billion plan to cut deficits and avoid the automatic sequester cuts set to hit March 1.

Sponsored by Rep. Chris Van Hollen (D-Md.), the deficit-reduction package — a combination of spending cuts and new revenues — would prevent roughly $85 billion in automatic cuts from hitting both defense and domestic programs through the end of the year.

Democrat leaders said Thursday that the bill would save the 750,000 jobs the Congressional Budget Office says would be lost this year if the cuts took effect, and they blasted Republicans for scheduling next week's recess without first finding a fix.

"Our plan makes specific policy choices to reduce the deficit in a balanced way, with a mix of spending cuts and revenue increases," Van Hollen said. "It stands in stark contrast to the GOP’s refusal to even offer a plan this Congress or come to the table to negotiate."

The House Democratic plan comes at the same time Senate Democrats proposed their own $110 billion plan to replace the sequester, with the money split evenly between tax hikes and spending cuts.

Appearing at her weekly press briefing in the Capitol, House Minority Leader Nancy Pelosi (D-Calif.) piled on, urging GOP leaders to stay in Washington to finalize a deal and accusing them of a willingness to sacrifice the middle class to protect the wealthy.

"Why will they not make millionaires pay their fair share and big oil give up their tax subsidies, instead to take it out on the public safety, the education of our children [and] our national security?" Pelosi asked. "March 1 is right around the corner."

The Democrats' proposal would raise new revenues by installing the so-called Buffett Rule, which would set a minimum tax rate on the highest earners. Under the bill, those earning more than $2 million per year would be taxed a minimum 30 percent, while those with annual incomes between $1 million and $2 million would be phased in up to that minimum rate.

The package would also eliminate a number of farm and oil subsidies, benefits Van Hollen referred to as "spending through the tax code."

"There are a lot of tax breaks that shouldn't stay in the tax code for another second," Van Hollen said.

With most Republicans in both chambers opposed to any new tax hikes, however, both Democratic bills are unlikely to move through Congress.