Rep. Chris Van Hollen, the ranking minority member of the House Budget Committee, has updated the Democrats’ sequester replacement bill so that it would replace mandated across-the-board cuts for fiscal 2014 with a mix of proposals to cut spending and raise revenue, including implementation of the so-called Buffett Rule.
The Buffett Rule, named after billionaire investor Warren Buffett, would impose a minimum effective tax rate of 30% on those with adjusted gross incomes of $2 million less charitable deductions. Buffett has complained his secretary should not pay higher taxes than he does because he can take advantage of preferential tax treatment of capital gains.
The “Stop the Sequester Job Loss Through 2014 Act” (H.R. 2060), an updated version of a bill Van Hollen, from Maryland, introduced in February (H.R. 699), would phase in higher rates for taxpayers with AGIs of between $1 million and $ 2 million. Forcing higher tax rates on the wealthy could make muni bonds more attractive to them.
Overall, the bill would reduce the deficit by $181 billion, which would more than replace the cuts mandated for fiscal year 2014, with a mix of 54% revenue raisers and 46% spending cuts.
Besides implementing the Buffett Rule, it also would repeal subsidies for big oil and gas companies, refocus farm subsidies, and cap discretionary defense spending at the levels that President Obama required through 2021, rather than at the higher caps originally set by the Budget Control Act.
The bill also calls for a balanced solution to stop the full multi-year sequester.
“We’ve already started to see the consequences of these harmful cuts,” Van Hollen said of the spending cuts imposed by sequestration. “At a time when we should be doing everything we can to boost job growth, the Congressional Budget Office estimates the sequester will cost 750,000 jobs in this year alone.”
“Yet Washington Republicans refused to act,” he added in a release. “House Democrats will keep working to replace the sequester and fight for working families. It’s time for the GOP to join that effort instead of refusing to even negotiate.”
Will Allison, press secretary for Ryan and other Republicans on the House Budget Committee, said members are still reviewing the bill and currently have no comment on it.
The Congressional Budget Office has estimated that the sequester, which went into effect in March and mandated $85.4 billion for the rest of fiscal year 2013, will lower economic growth from 1.4% to 2.0% this year alone, a cut of nearly one-third.