Sen. Angus King (I-Maine), a member of the budget conference committee, on Tuesday released a proposal that replaces roughly half of the sequestration scheduled through 2021 with savings from mandatory spending and revenue from ending corporate tax expenditures.
The plan calls for $455 billion in mandated cuts to be replaced by $200 billion in revenue from closing corporate tax loopholes, and $255 billion in savings from entitlement reforms. The plan also calls for smoothing out the sequester cuts, slowing their growth in earlier years and increasing them in later years to achieve the same amount of deficit reduction.
King, who named his proposal the “Grande” plan after Starbuck’s middle-sized cup, represents the “middle-of-the-road” approach to fiscal policy that has been sorely lacking in Washington over the last few years.
To attract support from both parties, King also calls for lower corporate tax rates and increased infrastructure spending. These would be paid for by $325 billion in revenue from ending certain corporate tax expenditures, which are subsidies built into the tax code. King’s plan would use $275 billion to lower the corporate tax rate from 35 percent to 32.5 percent; the remaining $50 billion in new revenue would be designated for infrastructure investment.
The ‘Grande’ plan lacks some specifics, including what reforms would be made to mandatory programs and which tax expenditures would be eliminated. But King’s efforts exemplifies the open-mindedness that lawmakers will need to resolve the latest fiscal impasse.
King acknowledges that his proposal will probably not be “the final answer,” but it could serve as a good starting point for creating a sound short-term fiscal plan. It would replace some of the blunt-instrument cuts from sequestration with targeted, gradual reforms that would achieve the same amount of deficit reduction. And its pro-growth measures could attract support from both Democrats and Republicans.
The senator’s proposal showcases the understanding that lawmakers must realistically address both revenue and spending -- and be open to a wide array of possible policy options.
As the budget conference committee struggles to set spending levels for FY 2014 and find alternatives to the sequester, King has offered a way to move forward. Let’s hope more members of Congress follow his example in taking a thoughtful and constructive approach to deficit reduction.