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Senate Dems unveil $110 billion sequester-replacement package

Senate Dems unveil $110 billion sequester-replacement package

Senate Democratic leaders unveiled a $110 billion sequester-replacement bill at a closed-door caucus meeting Thursday that would replace $85 billion in automatic spending cuts set to hit March 1.

The Senate Democratic package is split evenly between spending cuts and provisions raising new tax revenues, according to a Democratic source.

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It would raise nearly $54 billion in taxes by implementing the Buffett Rule, setting a minimum effective tax rate for wealthy individuals and families. It would raise additional revenues by changing the tax treatment of oil extraction from oil sands.

This version of the Buffett Rule would phase in a 30-percent effective rate for incomes between $1 million and $2 million.

The plan would also end tax breaks that incentivize companies to move jobs overseas, raising less than $1 billion.

The $55 billion in spending cuts are evenly divided between defense and non-defense programs. It would save $27.5 billion by eliminating agricultural subsidies and another $27.5 billion though defense cuts.

Senate Appropriations Committee Chairwoman Barbara MikulskiBarbara Ann MikulskiAthletic directors honor best former student-athletes on Capitol Hill Dems ponder gender politics of 2020 nominee Robert Mueller's forgotten surveillance crime spree MORE (D-Md.) said the defense cuts don't kick in until 2015, after the Afghanistan war ends and they are phased in slowly until 2021. The plan would make defense cuts of about $3 billion in fiscal years 2015 and 2016 and slowly rise to $5 billion in 2021.

If passed, the package would stop the sequester through the end of 2013. It would cost $85 billion to halt the automatic cuts through the end of the fiscal year, which ends in October.

The bill would appear to have little chance of reaching President Obama’s desk, however, given opposition from House and Senate Republicans to increasing any taxes to replace the sequester.

The standoff risks significant economic damage. The Congressional Budget Office this week estimated 750,000 jobs would be lost in 2013 alone from allowing the sequester to take effect. On Thursday, Homeland Security Secretary Janet Napolitano testified that the sequester would lead to the equivalent of 5,000 fewer border guards and add an average hour delay for flights at busy airports.

The bill could be a marker for talks on replacing the sequester in the context of the passing a bill to avoid a shutdown after March 27. That must-pass bill could become the vehicle for a compromise on the sequester.

Democrats rallied behind the proposal despite concerns raised by liberals, who said it should have been tilted more to tax hikes.

"The caucus has a deal," Senate Majority Leader Harry ReidHarry Mason ReidSenate heads home to campaign after deal on Trump nominees GOP has always been aggressive in trying to weaponize the system of judicial nominations Republicans come full circle with Supreme Court battle to the end MORE (D-Nev.) said after emerging from the meeting.

Liberals voiced concern about the 1-to-1 ratio of spending cuts to tax revenues in the package. By their estimation, Congress has already cut $1.7 trillion in spending and raised taxes by $700 billion since 2010, they note.

“We’ve let it be really lopsided,” said Sen. Tom UdallThomas (Tom) Stewart UdallHillicon Valley: Officials warn of Chinese influence efforts | Dow drops over 800 points | Tech stocks hit hard | Google appeals B EU fine | James Murdoch may be heading for Tesla | Most Americans worried about election security For everyone’s safety, border agents must use body-worn cameras Senate Democrats increase pressure for FBI investigation of Kavanaugh MORE (D-N.M.). “I’m going to support a more balanced approach than what we have now.”

Senate Budget Committee Chairwoman Patty MurrayPatricia (Patty) Lynn MurrayOvernight Health Care: House passes funding bill | Congress gets deal on opioids package | 80K people died in US from flu last winter Wilkie vows no 'inappropriate influence' at VA Dems push back on using federal funds to arm teachers MORE (D-Wash.), Appropriations Committee Chairwoman Barbara Mikulski (D-Md.) and Finance Committee Chairman Max BaucusMax Sieben BaucusOvernight Defense: McCain honored in Capitol ceremony | Mattis extends border deployment | Trump to embark on four-country trip after midterms Congress gives McCain the highest honor Judge boots Green Party from Montana ballot in boost to Tester MORE (D-Mont.) worked with Senate Majority Leader Harry Reid (D-Nev.) to craft the package.

They presented it to Democratic colleagues at a Thursday lunch.

Walking into the meeting, Sen. Tom HarkinThomas (Tom) Richard HarkinOn Nicaragua, the silence of the left is deafening Dem Senator open to bid from the left in 2020 Senate GOP rejects Trump’s call to go big on gun legislation MORE (D-Iowa) said he and other liberals would instead propose raising $157 billion in new revenues through changes to the tax code to pay for the sequester. He said the liberal counteroffer would reform tax breaks for private jets, S corporations and foreign subsidiaries.

Democratic aides predicted there would not be a large number of defections, however.

Harkin said he raised concerns about the 1-to-1 ratio of spending cuts to tax increases but conceded that he would ultimately vote for it. A Democratic aide said Harkin did not present a detailed alternative that would pay for the sequester mostly with revenue-raising measures.

“I think there ought to be more revenue and less cuts because we’ve already taken over 2-to-1 cuts in the past, 2-to-1 cuts over revenue,” said Harkin. “It ought to be more revenue and less cuts.”

Sen. Bernie SandersBernard (Bernie) SandersTrump attacks ‘Crazy Bernie’ Sanders over Medicare plans Overnight Defense: Trump says 'rogue killers' could be behind missing journalist | Sends Pompeo to meet Saudi king | Saudis may claim Khashoggi killed by accident | Ex-VA chief talks White House 'chaos' | Most F-35s cleared for flight Overnight Energy: Trump administration doubles down on climate skepticism | Suspended EPA health official hits back | Military bases could host coal, gas exports MORE (I-Vt.) criticized the package but would not say he would vote against it.  "We'll probably end up with 70 percent cuts and 30 percent revenue...we need more revenue," he said. Asked if he is a 'no' vote he said: "No, I'll look at the final package."

Sen. Carl LevinCarl Milton LevinCongress must use bipartisan oversight as the gold standard National security leaders: Trump's Iran strategy could spark war Overnight Defense: McCain honored in Capitol ceremony | Mattis extends border deployment | Trump to embark on four-country trip after midterms MORE (D-Mich.), who has co-sponsored legislation to raise tax revenues by ending an array of niche tax breaks, said he would vote for Reid’s sequester package even though no parts of his bill were included.

And another Senate liberal, Sen. Barbara BoxerBarbara Levy BoxerFormer Dem aide makes first court appearance on charges of posting GOP senators' info online Ex-House intern charged with 'doxing' GOP senators during Kavanaugh hearing Capitol Police arrest suspect in doxing of GOP senators MORE (D-Calif.), indicated her support.

“I would prefer doing all tax loophole closing, but I can do this,” Boxer said.

Murray said there is broad support among Senate Democrats for the package.

“I think our caucus is very supportive of replacing the sequester with a fair and balanced approach,” said Murray. “It will be a balanced approach of 50 percent revenue, 50 percent cuts.”

Murray said some her colleagues strongly prefer a higher ratio of tax revenues but would not vote against the leadership’s plan

“Our caucus is very supportive of this approach,” she said.

"I am supporting his proposal," Sen. Ben CardinBenjamin (Ben) Louis CardinBipartisan bill would block foreign adversaries from owning US election vendors Missing journalist strains US-Saudi relationship Democrats seek to turn Kavanaugh anger into votes MORE (D-Md.) said. "I think our caucus is very unified...we don't want to see sequestration. It does represent the values of our caucus and it is a proposal that can keep unity in our caucus."

- Zack Colman contributed

Updated at 3:24 p.m.