House Democrats on Tuesday introduced a revised bill that would replace the automatic sequestration cuts that took effect in March and avoid further cuts in 2014.
The bill, authored by Rep. Chris Van Hollen (D-Md.), contains $181 billion in replacement deficit reduction over 10 years. Fifty-four percent of the reduction comes from increased tax revenue and 46 percent comes from spending cuts.
“House Democrats will keep working to replace the sequester and fighting for working families. It’s time for the GOP to join that effort instead of refusing to even negotiate.”
A copy of the bill obtained by The Hill shows that the basic outline of deficit reduction remains the same as a previous sequester-replacement bill from Van Hollen.
Most of the deeper savings to cover 2013 and 2014 come from lowering defense spending caps in the out years of 2017 to 2021, an aide explained.
New revenue would be generated from a minimum tax on millionaires — commonly known as the Buffett Rule — and by eliminating tax breaks for oil and gas companies. The bill ends the accounting method known as “last in, first out” (LIFO) for oil companies, and it eliminates a deduction for domestic production for the "major integrated oil companies."
The new bill, unlike the last version, also imposes a limit on deducting intangible drilling costs from tax liabilities for those same companies.
Additional spending cuts come from extending the current farm bill for a year while eliminating the direct payment program.
The House farm bill coming to the floor next month also eliminates direct payments but uses some of the savings to expand crop insurance and provide new price and revenue protection.
Rep. Rosa DeLauro (D-Conn.) is co-sponsoring the bill and offered it as an amendment during a House Appropriations Committee markup on Tuesday.
The amendment was defeated on a party line 22 to 26 vote.
The committee was marking up its spending plan for fiscal year 2014, which begins on Oct. 1.
The plan conforms to the $966 billion top-line spending cap for the year, as called for in the August 2011 debt-ceiling agreement. Pursuant to the House budget, it increases defense spending compared to current levels under the sequester, and deepens domestic cuts.
Job and health programs get an 18 percent cut below the sequester and the State Department faces a 15 percent further reduction.
--This report was updated at 2:31 p.m.