The Congressional Progressive Caucus announced today that it is introducing legislation to cancel the automatic spending cuts — known as the “sequester” — that are scheduled to take place at the beginning of March. The CPC’s Balancing Act would replace the scheduled spending cuts with more than $900 billion in new revenues and nearly $300 billion in cuts to the defense budget.
The Balancing Act would result in $960 billion in new revenue, generated from closing tax loopholes for corporations and the wealthy. It ends the carried interest loophole that benefits wealthy hedge fund managers, closes tax loopholes that encourage corporations to send profits to offshore tax havens, ends the $4 billion in annual subsidies to Big Oil companies, and closes loopholes that benefit buyers of private jets and yachts. It also limits deductions for wealthy taxpayers and closes loopholes in the estate tax.
The proposal also cuts $278 billion from defense spending, a dramatic reduction from the $500 billion in cuts the Pentagon would face under the sequester. Added together with previous deficit reduction efforts, the Balancing Act would equalize cuts to defense and domestic spending while also making the overall package of deficit reduction measures equal parts revenue and spending cuts:
The Balancing Act also includes investments into infrastructure and education meant to bolster the economic recovery. It would reinstitute the Making Work Pay tax credit, which would provide up to $800 to low- and middle-income families, for one year at a cost of $61 billion. It would also spend $55 billion on education investments — a measure the CPC says would prevent 280,000 teacher layoffs and modernize 35,000 public schools — and $160 billion in infrastructure investments. The CPC projects that such investments would create roughly 1 million jobs. Even with those investments, the Balancing Act would result in a total of $3.3 trillion in deficit reduction when added to already-enacted cuts and revenues.