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A summary of the plan released by Reid’s office said most of the revenue would come from a new 30 percent tax on adjusted gross income that would be phased in on income between $1 million and $2 million. About $2 billion would come from allowing oil derived from tar sands to be taxed, matching a tax that is assessed on oil from other sources to finance the oil spill liability trust fund.
The millionaire’s surtax proposal has been dubbed “the Buffett rule,” for billionaire investor Warren Buffett, who has called for higher taxes on the wealthy.
More revenue would come from eliminating corporate deductions related to moving jobs overseas.
The spending cuts would come from $27.5 billion in reduced spending on defense through 2021 and $27.5 billion from ending direct agriculture payments.
Appropriations Chairwoman Barbara A. Mikulski of Maryland said defense cuts would come “over a nine-year period starting in 2015, after we’ve brought troops back home.” The cuts would amount to about $3 billion in fiscal years 2015 and 2016, and then would rise slowly to a high of about $5 billion in fiscal 2021.
“I am confident we would have the majority if not the totality of the Democratic Party,” said Mikulski.
The savings on agriculture echo plans that were included in the farm bill that passed the Senate last June, 65-34. The bill included $24 billion in cuts from elimination of direct payment subsidies, streamlining programs and curbing food assistance waste.
Agriculture Chairman Debbie Stabenow of Michigan vowed to renew her push for the cuts, after they were omitted from the fiscal-cliff deal brokered by Vice President Joseph R. Biden Jr. and McConnell. The measure extended provisions of the 2008 farm law (PL 110-246) through fiscal 2013.
Direct payments have been strongly defended by some Southern senators, however, including Sen. Saxby Chambliss, R-Ga.
Reid faced heavy pressure from his party’s liberal wing to rely more heavily on taxes on the wealthy or on overseas operations of companies. But he stuck with an even split between tax hikes and spending cuts.
Rep. Chris Van Hollen, D-Md., the ranking Democrat on the House Budget Committee, introduced a separate sequester replacement measure in the GOP-controlled House, one he said is “consistent with the Senate proposal” but would bring some $120 billion in savings.
Meredith Shiner contributed to this report.