By Allan Freyer
BTC Public Policy Analyst
- Congress needs to replace sequestration with a balanced approach to deficit reduction that includes at least one dollar in new revenues for every dollar in smart, strategic spending cuts.
- Due to recent deficit reduction legislation and an improving national economy, Congress needs to find just $1.5 trillion in budget savings over the next decade in order to put the debt on a sustainable path relative to our economy.
- Sequestration is the wrong approach to finding these savings, since these spending cuts target the smallest portion of the federal budget – a portion that has already borne the brunt of previous deficit reduction.
- Instead, Congress should consider four revenue options that can raise almost $737 billion over the next decade, half of the savings required to hit the debt stabilization target.
- These revenue options include: (1) limiting the total savings from deductions and loopholes available to high-end taxpayers; (2) preventing offshore corporate tax avoidance; (3) limiting deductions for oil companies; and (4) eliminating the corporate deduction for expenses associated with moving business operations offshore.