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Senate Democrats Outline Plan For $1.85 Trillion In Deficit Reduction

Senate Democrats Outline Plan For $1.85 Trillion In Deficit Reduction

Senate Democrats unveiled their budget proposal on Wednesday, providing a stark contrast to the blueprint outlined by House Republicans earlier in the week.

While the House Republican proposal calls for a $4.6 trillion reduction in government spending over the next decade, the plan from Senate Democrats calls for $1.85 trillion in deficit reduction over the next ten years through a combination of spending cuts and tax increases.

Senate Budget Committee Chairman Patty Murray, D-Wash., said the $1.85 trillion in deficit reduction comes in addition to the $2.4 trillion in deficit reduction that has already been implemented.

Murray noted that the $4.25 trillion in total deficit reduction over ten years would exceed the approximately $4 trillion in deficit reduction recommended by the Simpson-Bowles commission.

"[The Senate Budget] reduces the deficit to below three percent of GDP by 2015 and keeps it well below that level for the rest of the ten-year window in a responsible way, and it pushes our debt as a percentage of the economy down and moving in the right direction," Murray said.

She added, "Our budget tackles this issue the way the American people have consistently said they want it done, with an equal mix of responsible spending cuts made across the federal budget, and new revenue raised by closing loopholes and cutting wasteful breaks that primarily benefit the rich."

The proposal from Senate Democrats includes $975 billion in spending cuts as well as another $975 billion in new revenues.

The spending cuts include a $493 billion reduction in domestic spending, a $240 billion reduction in defense spending, and $242 billion in reduced interest payments.

Murray said the $975 billion in new revenues would be achieved by closing loopholes and eliminating wasteful spending in the tax code that benefits the wealthiest Americans and biggest corporations.

The plan would also replace the automatic spending cuts known as the sequester with a mix of tax increases and more-targeted spending cuts.

Additionally, the proposal includes a $100 billion jobs and infrastructure package that Murray said would put workers back on the job repairing the nation's highest priority deteriorating infrastructure.

A statement from White House Press Secretary Jay Carney praised the Senate Democratic budget, saying it is consistent with President Barack Obama's belief that the economy grows best from the middle-out, not the top-down.

"This budget makes tough spending cuts and leaves no sacred cows, but it also makes sure that seniors and the middle class aren't forced to bear the full burden of deficit reduction by eliminating wasteful loopholes through tax reform, so that the wealthiest Americans pay their fair share," Carney said.

However, Republicans were not nearly as kind, with Nebraska Sen. Mike Johanns, R-Neb., calling the proposal a "fiscal fiasco."

"It's a more-of-everything proposal. More taxes, more spending, more borrowing, and more debt passed on to future generations," Johanns said in a statement.

Senate Minority Leader Mitch McConnell, R-Ky., also had some harsh words for the plan, calling it "one of the most extreme, most left-wing budgets of the modern era."

The remarks reflect the difficulty that the two sides will have in reconciling their fiscal policies, with familiar disagreements over taxes and entitlement reform likely to be on full display in the coming weeks.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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