A day after House Republicans outlined their budget proposal for fiscal year 2014, Senate Democrats unveiled a broad outline of their budget, which Senate Budget Committee Chair Patty Murray (D-WA) said will reduce the deficit to less than three percent of gross domestic product while bringing total deficit reduction to $4.2 trillion over the last four years.
The Democratic budget would replace the automatic budget cuts, known as sequestration, that took effect on March 1 with a different set of cuts that will achieve $1.95 trillion in total cuts and revenues. Here are the main provisions of the Democratic budget as outlined by Murray:
$1.85 trillion in total deficit reduction: The Senate budget achieves $1.85 trillion in total deficit reduction split evenly between spending cuts and new revenues and bringing total deficit reduction since President Obama took office to more than $4 trillion once combined with past spending cuts and tax increases. It includes $493 billion in domestic spending cuts, $275 billion of which would come from health savings determined by the Senate Finance Committee. The other $240 billion would come from defense and the end of the war in Afghanistan, and the budget would save $242 billion in interest savings.
$975 billion in new revenues: The budget would achieve half of its deficit reduction from new revenue increases derived from the elimination of tax expenditures and loopholes, though it does not include specifics on which would be eliminated. That would be left to the Senate Finance Committee as part of a broader tax reform bill. A report from the Center for American Progress found that there were more than $1 trillion in tax expenditures that could be eliminated. Those include subsidies for oil and gas companies, a loophole that benefits hedge fund managers, ending tax breaks for corporations that move jobs overseas, and limits on deductions for wealthy taxpayers.
$100 billion in stimulus spending: The budget also includes $100 billion for programs meant to boost the economic recovery, including $50 billion for infrastructure projects. The rest would go toward worker training programs and other forms of stimulus spending, according to Murray.
The Democratic budget would not achieve balance over the 10-year budget window, a point the Budget Committee’s Republicans repeated throughout the markup today. The House GOP budget, by contrast, claims to balance in 10 years, though those claims are built almost entirely on unrealistic revenue projections.