Posted on February 15, 2013 |
Yesterday, Senate Democrats proposed a plan to postpone across-the-board spending cuts — known inside the beltway as the “sequester” — that are currently scheduled to take effect in just two weeks, on March 1. The bill, called the American Family Economic Protection Act, includes $120 billion of savings — enough to replace the sequester through the end of calendar year 2013.
Unlike the sequester, which reduces the deficit solely through deep spending cuts (on top of earlier spending cuts that are 2.5 times greater than new revenues), the American Family Economic Protection Act achieves savings from an equal amount of revenues and cuts (plus about $10 billion in interest savings). The bill would raise $54 billion over 10 years by adopting the “Buffett rule,” a measure that would ensure very wealthy taxpayers cannot get away with paying taxes at a lower effective rate than middle class families. Those with incomes above $1 million (after subtracting charitable contributions) would be required to pay at least a 30 percent tax rate, with a phase-in for incomes between $1 million and $2 million. An additional $1 billion in revenue would be raised by eliminating an oil industry tax loophole and a tax deduction for businesses that ship jobs overseas.
On the spending side, savings in the bill would come mostly from modest reductions in the overall level of defense spending — which would not begin until FY 2015, when the war in Afghanistan is expected to end – and cuts in agriculture subsidies, especially direct payments to farmers that are currently provided regardless of yields, prices, or farm income.
All in all, this sounds like a reasonable proposal to us — especially compared to the sequester, which would be devastating for many programs that women and their families depend on. Read more »