WASHINGTON -- Senate Democrats have settled on a final plan to replace 10 months' worth of sequestration cuts, aides said on Thursday.
The plan, called the American Family Economic Protection Act, pinpoints $120 billion of savings, split evenly between cuts and revenues, that would replace the sequestration-designated cuts to defense and domestic spending until the end of December.
Party leadership sold the package to the caucus during a lunch session on Thursday. Whether it could get the votes of at least five Senate Republicans -- the number needed to overcome a likely filibuster attempt -- remains to be seen.
As designed, the plan would raise $55 billion in revenues over the next 10 months while slashing roughly $55 billion in spending during that same time period. The remaining $10 billion would come from interest savings.
The revenue side is made up of three main policies. The first is the so-called "Buffett Rule," which would set a minimum 30 percent tax rate phased in on incomes between $1 million and $2 million. Aides say that such a proposal would raise more than $50 billion (though last week, they had estimated that amount would be a bit lower).
The rest of the revenue would come from eliminating businesses' ability to take deductions by relocating facilities overseas, raising an estimated $200 million, and from a provision closing the tar sands loophole, raising $1.7 billion. Under current law, there is an eight-cent-per-barrel tax on oil, both imported and domestically produced. That money supports an oil spill liability trust fund used to pay for cleanup after oil spills. The tax, however, isn't levied on oil produced from tar sands, even though producers of that oil have access to the liability trust fund should a spill occur. The Senate Democrats' sequestration plan would change that.
On the spending side, Senate Democrats are pinpointing two areas in which to make cuts. The first is defense spending, though the specifics aren't yet clear. The second is agriculture subsidies, with lawmakers specifically targeting direct payments to large farmers. A Senate aide projected the savings at $27.5 billion for each.
Several Republican lawmakers have expressed openness to revenue hikes as part of a larger proposal to replace the looming sequestration, which, if no action is taken, would cut defense, Medicare provider and discretionary spending by $1 trillion over the next decade. But their position has always been that the revenue-raisers would be need to replace the sequester's defense cuts. The Senate Democratic proposal leaves defense cuts in while still adding revenue-raisers, making it a likely non-starter among Republicans.
Still, the plan represents the first attempt by the Senate to find a replacement. House Speaker John Boehner (R-Ohio) has said he won't act unless the Senate moves first. Sequestration is set to begin on March 1.
UPDATE: 3:15 p.m. -- The Democratic Senate aide sent HuffPost a fact sheet about the bill.
The American Family Economic Protection Act
The Democratic proposal to replace the first year of sequestration with a balanced approach that works for middle class families and the economy

The American Family Economic Protection Act would replace sequestration through January 2, 2014 with an equal amount of balanced and responsible deficit reduction. Following the precedent set in the bipartisan year-end deal that replaced the first two months of sequestration, the Democratic proposal includes half new revenue and half responsible spending cuts, with half of the spending cuts coming on the defense side in a way the Pentagon can implement responsibly, and the other half coming from smart reductions to domestic spending.

This proposal would protect the economy from the shock of the scheduled automatic cuts that would threaten jobs and weaken the economic security of the middle class. It would make sure families and communities are protected from the devastating cuts to education, law enforcement, food safety, and so many other critical programs impacted by sequestration. And it would give the Pentagon time to make modest spending cuts responsibly as they draw down troops from overseas.

Sequestration was included in the bipartisan Budget Control Act in order to push both sides to compromise and to work together on a balanced replacement. The American people have made it clear that they favor a balanced approach to deficit reduction that includes responsible spending cuts and new revenue from those who can afford it most. The Democratic proposal delivers that, while the only ideas that Republicans have come out with so far would protect the rich from paying a penny more in taxes and would be even worse for seniors and families in the long run.

The American Family Economic Protection Act includes:

New revenue from the wealthiest Americans and biggest corporations: $55 billion:
The American Family Economic Protection Act includes the Buffett Rule, which reduces the deficit by $53.6 billion by making sure that taxpayers with a gross adjusted income above $1 million cannot pay tax at a lower effective tax rate than middle class families. Specifically, it would require these taxpayers to pay a 30 percent tax on all of their adjusted gross income (less charitable contributions), phased in between $1 million and $2 million. The proposal also eliminates a tax break that encourages companies to ship job overseas by denying tax deductions for costs associated with outsourcing, reducing the deficit by $200 million. And it eliminates a special tax loophole now enjoyed by the oil industry by including oil from tar sands among the petroleum products that are subject to taxes that support the oil spill liability trust fund, which would reduce the deficit by $1.7 billion.

Responsible defense cuts: $27.5 billion:
The American Family Economic Protection Act includes modest reductions in the overall level of defense spending phased in responsibly to time with the troop drawdown in Afghanistan in 2015, and continuing through 2021. The reduction would be about $3 billion in Fiscal Years 2015 and 2016, and then would rise slowly to a high of about $5 billion in Fiscal Year 2021.

Responsible domestic cuts: $27.5 billion:
The American Family Economic Protection Act saves $27.5 billion over 10 years by ending direct payments, which are currently provided regardless of yields, prices, or farm income.
UPDATE: 4:15 p.m. -- House Democrats, meanwhile, have introduced a sequestration replacement bill of their own. Dubbed the "Stop the Sequester Job Loss Now Act" and introduced by Rep. Chris Van Hollen (D-Md.), the bill would repeal subsidies for oil and gas companies, cut farm subsidies and institute the Buffett Rule to pay for a 10-month replacement of the sequester. Details of the bill can be found here.

Advancing the State of the Union: More Than Just the President's Job

Leadership is defined not only by our words and our will, but by the very actions we take to back up our vision. Last night, President Obama delivered his State of the Union address (SOTU) to a nation that gave him the majority of its vote in 2012, and to a citizenry that is still overwhelmingly ready to continue moving forward. The president encouraged unity, economic growth, increasing the minimum wage, protecting voting rights, salvaging the middle class, combating climate change, enacting safe gun legislation, utilizing clean energy, educating our youth, bringing our troops home, immigration reform and much, much more. After his address, the president conducted a conference call with grassroots supporters, then took his message on a three-city tour. He backed his own words with action; now we, the people, must do the same. After all, movements begin in our own homes -- they don't come from the White House. If we want to see real substantive change in our lives and in society, then each and every one of us has to make it happen, period.
"We may do different jobs and wear different uniforms, and hold different views than the person beside us," stated the president in his SOTU remarks.
But as Americans, we all share the same proud title -- we are citizens. It's a word that doesn't just describe our nationality or legal status. It describes what we believe. It captures the enduring idea that this country only works when we accept certain obligations to one another and to future generations, that our rights are wrapped up in the rights of others....
Perhaps nothing summarizes the task before us all more than these words. It is not enough for us to simply list our grievances, or acknowledge challenges that exist; we must consistently work and strive to create the progress we seek. The president is our leader, and while he may guide us in the right direction, it is incumbent upon all of us to work together, take concrete steps and create a society that is more fair and more just for all.
As our economy continues to recover from the worst financial crisis since the Great Depression, many of our fellow Americans are finding themselves forced into working multiple low-paying jobs in order to put food on the table. We owe it to them, and to the countless others that weren't afforded the same opportunities for advancement as the wealthy to raise the minimum wage. As the president highlighted in his address, 19 states have already chosen to raise their minimum wage; now the rest of the nation should follow suit. We must start organizing and mobilizing around the president's push for a minimum wage of $9/hr. In a country as powerful as ours, we can never forget about the least of these. We must help neighbors push for the increase, and help educate others on how it will in turn benefit entire communities and the nation as a whole. Take the time to uplift your fellow citizen and watch as you find yourself uplifted in the process.
The same can be applied to all of the tasks that remain before us. Whether it's fighting voter suppression tactics and streamlining the voting process, or creating effective solutions to the growing threat of climate change, or working to ensure that all young people receive a quality education and a shot at the American dream, or finally establishing safe gun laws that protect young babies from Newtown to the streets of Chicago, or passing real immigration reform that protects those who were brought here through no fault of their own and keeps the brightest in the country, or any of the host of challenges that remain before us, the time for complacency has long expired. It's people that have always pushed this nation forward. Whether it was civil rights, women's rights, or gay/lesbian rights, it has always been the work of everyday Americans on the ground that educated, mobilized and created mechanisms for change. Coupled with the right leadership, that's how progress has won throughout our history. As we witnessed during the SOTU, we have the right leadership at this very moment; now it's up to us to keep advancing forward.
During the president's address, he acknowledged 102-year-old Desiline Victor from North Miami, who patiently waited hours just to vote in the last election. Also among those sitting in the first lady's box that he mentioned were Cleopatra Cowley-Pendleton and Nathaniel A. Pendleton Sr., the parents of 15-year-old Hadiya Pendleton who was murdered at a park near her school on Chicago's South Side days after participating in the president's inaugural celebration. Until elderly women do not have to deal with mechanisms designed to stifle their vote, and until young women do not have to grow up in a society dodging bullets, our work remains. There's an old adage that states: actions speak louder than words. If we truly care about leaving a more advanced and a more equalized nation to our children and their children, then we must act now. In the words of the president, "It remains the task of us all, as citizens of these United States, to be the authors of the next great chapter of our American story."