Senate Majority Leader Harry Reid of Nevada laid out a $110 billion plan on Thursday to replace the sequester with higher taxes on the wealthy, tax revenue from oil derived from tar sands and spending reductions in agriculture subsidies and defense.
Half the replacement savings would come from the tax increases and half from future spending, including $27.5 billion in reductions in defense spending over the next eight years and $27.5 billion from eliminating direct subsidy payments to farmers.
Reid briefed members of the Democratic Caucus at a Thursday lunch on details of the measure he plans to put on the floor the week of Feb. 25.
The majority leader said a Republican alternative package will also be offered.
The blueprint would avert some $85 billion in automatic, across-the-board spending cuts that are scheduled to begin hitting federal agency budgets on March 1. The additional $25 billion in the Democratic plan would replace additional reductions under sequester through December.
Republicans are adamant that no plan to replace the sequester should include new tax revenue. Republicans, who have adamantly opposed tax increases, strongly opposed Reid’s proposal. “The idea of raising taxes is moving in the wrong direction,” said Sen. Michael D. Crapo of Idaho, ranking member on Banking.
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