On February 14, 2013, Senate Majority Leader Harry Reid (D-NV) proposed a $110 billion plan to avert sequestration, the across-the-board cuts to security and non-security programs scheduled to take effect March 1, 2013.
The plan proposes revenue increases along with spending cuts in order to reduce the deficit. More specifically, the revenue increases would result from increasing taxes on the wealthy and taxing tar-sand oil. The spending cuts would include $27.5 billion to defense spending over the next eight years and $27.5 billion from eliminating subsidy payments to farmers.
According to The Hill, “a significant portion of Reid’s caucus argues the split should be 80-20, with tax increases making up the bulk of the package. They contend Reid and Obama are negotiating with themselves by agreeing upfront to a 1-1 ratio of tax increases and spending cuts. “
Senate liberals say this outcome would be unfair because, by their calculation, Congress has already enacted $1.7 trillion in spending cuts compared to collecting only $700 billion in new taxes. The members claim the total amount of deficit reduction, including proposals passed in the last Congress, should raise a dollar in taxes for every dollar it cuts in spending.
Further action on the measure is expected to be taken in the Senate next week. Republicans, who oppose raising taxes, are expected to outline an alternative measure in the near future.