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    Details of the Democrats' Ten-Month Sequester-Delay Plan

    02/15/2013

    The Senate Democratic Leadership offered a plan yesterday that would delay the sequester through January 2, 2014 (a ten-month postponement) and would “pay for” this delay of spending reductions with a set of new tax hikes and alternative spending trims. 

    (The term "sequester" refers here to a set of automatic, across-the-board spending reductions, in certain programs, scheduled, under current law, to go into effect on March 1, 2013. Congress enacted the sequester as part of the debt ceiling deal of 2011, hoping it would serve as an enforcement mechanism to ensure promised spending reductions took place. This legislative experiment in self-control failed, and now the sequester is slated to take effect March 1st, after having been postponed from January 1st.)

    The plan reduces by half the already modest spending trims in the sequester and fills the gap with -- surprise -- new taxes.

    This is a flawed plan that fiscal conservatives should oppose.

    Details

    The American Family Economic Protection Act (i.e. the Democratic Leadership Sequester Plan) consists of the following provisions:

    I. Tax Hikes ($55,000,000,000)

    a. Buffett tax – The plan would require upper income taxpayers to pay a 30 percent tax on adjusted gross income less charitable contributions (phased in between $1,000,000 and $2,000,000).

    b. Oil companies tax – The plan would include oil from tar sands among the petroleum products that are subject to an 8-cent-a-barrel tax to support the Oil Spill Liability Trust Fund.

    c. Offshore tax – The plan would eliminate the tax deduction for costs associated with moving a company's business operations overseas

    II. Spending Cuts ($55,000,000,000)

    a. Defense spending – In Fiscal Year 2015 and Fiscal Year 2016, the plan would reduce defense spending by $3,000,000,000, then increase the “cuts” slowly to $5,000,000,000 in FY 2021 for a total of $27,500,000,000 in savings through trims in projected defense spending. Overall defense spending would still rise.

    b. Agriculture spending – The plan would end the welfare program known as direct payments to farmers, for a savings of $27,500,000,000 over ten years. 

    Comments

    The proposed sequester delay, estimated to cost taxpayers about $110,000,000,000 over ten years, would trim appropriations, and hike taxes, in equal ten-year amounts. It includes no savings from entitlements. 

    Almost all of the new revenue would come from the Buffett tax, a new surtax tax on incomes over a million dollars a year. This is unfair -- a classic left-wing tactic to divide citizens against one another -- and should be opposed.

    The spending trims are only half the amount of what’s in the current-law sequester, which is scheduled to take effect March 1 (after having been postoned in the Fiscal Cliff bill, H.R.8, from January 1).

    The Democrats would shift the spending trims from domestic welfare programs to farm programs, while retaining (but reducing) spending trims in defense.

    Although I've not seen the details, I assume fiscal conservatives could support the Democrats' proposed spending trims (although not their amount, which is insufficient).

    Conclusion

    Fiscal conservatives should oppose this plan.  

    The sequester would be better than this plan.

    Also better than this plan: the House-passed sequester-replacement bill, which contains no tax hikes, but rather redistributes the spending trims from defense to domestic appropriations.

    It's clear from the sequester "substitutes" put forward by House Republicans and Senate Democrats that neither party is serious about cutting spending.

    So it's looking like a very safe bet that the sequester will kick in on March 1st. And that's fine.

    Dean Clancy is FreedomWorks' Vice President for Public Policy.


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    3 comments
    Tennisdad's picture
    William King
    02/15/2013

    Federal government is fiscally destructive towards free-enterprise because of its heavy-handed influence over labor and capital, which is further exempified by this reshuffling the actions of the socialist-dominated United States Congress and Executive Office.

    FreedomWorks plays into the goals and methodology of this failed system when it focuses the media's attention to the failed two-party, politcal system as being an honest and real expression or broker of free-market principles.

    Citizens have begun to look forward to the collapse of American society as the inevitable precursor to economic prosperity ahead.

    Condoning the machinations of the two-party system as a form of panacea for temporary relief of society's ills is similar to patching a progressive leak in a faulty damwall from the exterior. In this case, no one longs to live anymre at the foot of the dam.

    When the dam breaks, completing its destructive cycle, the hope for a new and more secure life can begin again.

    Republicans and Democrats alike continue to patch our hernial federal government from the outside knowing quite well of the temporary and fatal relief they are providing for indivdual liberty in an attempt to cradle, nuture and wean the quasi-socialist government they have created.

    It is not a good indicator for the Tea Party movement to see FreedomWorks becoming a patently partisan media-feeding outlet.

    Modern liberals and conservatives feed from the same trough, as do Democrats and Republicans, and have become dependent on each other for ingrained control of political power.

    When FreedomWorks succumbs to the influences of the two-party system, the Tea Party movement must instead urgently focus upon the States to represent their individual interests. As FreedomWorks original message becomes commingled with the relentless propaganda adopted by the broader-minded political elite, individual liberty must turn to state leaders to fight the battle against federal tyranny.

    It's uncertain as to whether FreeedomWorks has become a featured player gaming America to a socialist future, or whether they are merely lacking or losing insight as to the nature of American government's role in American society.

    Peace and Justice

    lheal's picture
    Loren Heal
    02/15/2013

    1. If you're predicting collapse of America will be followed by anything positive, you're mad. The lesson of history is that collapses of republics are always followed by tyranny. There is no reason to expect that an American collapse would be any different. 2. Have you talked to your neighbors lately? I suggest you get your name on the ballot for a local office -- dog catcher, school board, whatever -- and run as whatever new party you want. Go to your neighbors and talk to them, get them to turn out for you on election day. The next election, find people to run on your ticket. Gradually, take over your county, your legislative district, your state. Connect with people over the Internet who are doing the same in their local communities. Take over the country peacefully. 3. If you're not willing to do what I just said, shut up.

    Scotty Woodward
    02/15/2013

    Enact Simpson-Bowles!

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