Update: This post has been updated as of February 27, 2013 to reflect new proposals from the Senate Republicans
With time running out before the sequester is scheduled to hit, Senate Democrats have released  a proposal that would replace the across-the-board cuts until January 2, 2014 with a 50-50 mix of revenue and spending changes. On February 27, CBO scored  The American Family Economic Protection Act as adding $7.2 billion to the deficit. Provisions include:
This is the latest in many plans put forward to either prevent one year of sequestration cuts or replace the sequester altogether. Below are summaries of some of the other proposed plans:
The White House Proposal : While details are still unclear, White House spokespersons have said that everything the President proposed in the fiscal cliff negotiations is still on the table, including an additional $600 billion in revenue that could be achieved through limiting tax expenditures. Specifically, these policies include:
The Down Payment to Protect National Security Act of 2013 : This sequester replacement bill has been introduced in the House by Rep. Buck McKeon (R-CA) and in the Senate by Sen. Kelly Ayotte (R-NH). It would pay for the first year of sequestration by achieving approximately $85 billion in savings, sufficient to pay for both defense and non-defense accounts. The offsets for this bill include:
The Balancing Act of 2013 : This bill, introduced by Keith Ellison (D-MN) and members of the House Progressive Caucus, would replace the sequester with $960 billion in new revenue through reforms to the individual and corporate tax code. It would also reduce defense spending by $278 billion to pay for a one-year re-instatement of the Making Work Pay tax credit ($61 billion), funds for teacher and school modernization ($55 billion) and transportation infrastructure investments ($160 billion). Some of the largest options in their bill include:
Senate Republican Proposal: Senate Republicans are developing a sequestration replacement proposal that would cancel the across-the-board cuts for FY2013, but:
Senate Republican Alternative Plan: Sens. Lindsey Graham (R-SC), John McCain (R-AZ), and Kelly Ayotte (R-NH) are developing their own alternative to the Senate Republican proposal. Details have not yet been released, but reports indicate that it would be similar to the House Republican replacement plan from last year. Specifically, the plan would include:
Sequester Replacement Reconciliation Act of 2012 (H.R. 5652) : Last year, Rep. Paul Ryan (R-WI) put forward a bill , which was passed by the House, that would have canceled the sequester and offset the cost through budget reconciliation savings from six House committees -- Agriculture, Energy & Commerce, Financial Services, Judiciary, Oversight & Government Reform, and Ways and Means. The sequestration of FY2013 non-defense mandatory funding of approximately $12 billion would remain in place and include additional mandatory spending cuts, equaling $316 billion in ten year savings. The changes to mandatory programs include (longer description here ):
Sen. Whitehouse's One-Year Plan : Sen. Sheldon Whitehouse (D-RI) has proposed two plans for replacing the sequester, a one-year waiver and a full replacement, paying for both by making changes to the corporate and individual tax code. The one-year repeal of the sequester for the rest of FY2013 would pay for the $85 billion in lost savings using a combination of the following options, together totaling $102.7 billion:
Sen. Whitehouse's Nine-Year Plan : Whitehouse has also proposed a full replacement for the sequester. The plan would include all of the offsets in the one-year plan above ($102.7 billion), as well as the following proposals:
Rep. Chris Van Hollen's Amendment : Rep. Chris Van Hollen (D-MD) submitted an amendment to the Require a PLAN Act which would offset the costs of eliminating the sequester for 2013 with a combination of spending cuts and revenues, but it did not receive consideration on the floor. Offsets in the amendment include:
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The sequester was never intended to be policy; rather, it was enacted as an enforcement mechanism to help pressure the Super Committee to come to an agreement on deficit reduction. While these proposals that offset the cost of a one-year repeal or a full replacement of the sequester will at least ensure that deficit reduction does take place, lawmakers should ideally use this opportunity to come together and enact a comprehensive plan that would do more than just tread water.
We can do much more if we are willing to take up entitlement and tax reform but above all, lawmakers should avoid the worst option of simply waiving the sequester without offsets and without addressing our unsustainable debt path.