Democrats pitch $110bn deal to avoid cuts Democrats in the US Senate are proposing to replace looming automatic spending cuts with deficit reductions worth $110bn, including a minimum tax level for people earning more than $1m, reductions in farm subsidies and lower defence spending. Legislation presented by Patty Murray, chairman of the Senate budget committee, comes as across-the-board spending cuts worth $1.2tn over 10 years are due to start on March 1. These would result in government cuts of $85bn to the economy for the remainder of the fiscal year ending on September 30. Both Republicans and Democrats - as well as President Barack Obama - are adamant they want to avoid this "sequestration" but cannot agree on how to unwind the cuts and replace them with more focused savings. The bill, which was endorsed by the White House, is unlikely to help bridge the gap, however. The plan would replace sequestration until the start of 2014 and includes the elimination of some small tax breaks benefiting multinationals and oil companies but does not attack some of the bigger deductions that such businesses usually use. Even before it was announced Thursday, Mitch McConnell, the Republican Senate minority leader, dismissed it. It's a political stunt designed to mask the fact that they've offered no solutions and don't plan to offer any. And it's a total waste of time," he said. The centrepiece of the bill is a revival of the so-called "Buffett rule" - a minimum tax of 30 per cent on households earning more than $1m - which is intended to stop the wealthiest people from paying lower tax rates than middle-class families. The measure, named after billionaire investor Warren Buffett, was first proposed by Mr Obama in September 2011. However, the Democratic legislation does not include curbs on the preferential tax treatment of the profits of private equity and hedge fund managers - known as carried interest - after speculation that it could be on the chopping block. Many Democrats, including Mr Obama, have said carried interest should no longer be taxed at lower capital gains rates but at higher ordinary income rates. However, some Democrats are skittish about the idea. As well as the "Buffett rule," which is worth about $54bn in deficit reduction over a decade, Ms Murray's bill includes $27.5bn in cuts to farm subsidies, scrapping direct payments to farmers that occur regardless of yield or price levels. It also includes $27.5bn in additional cuts to defence spending starting in 2015 - to be phased in after the withdrawal of troops from Afghanistan. On corporate tax, it denies tax deductions for outsourcing expenses, but protects much bigger tax breaks such as the ability of multinationals to defer their taxes on foreign earnings until the money is brought back into the US. It also includes tar sand oil in the oil spill liability trust fund, saving $2bn. Republicans have proposed their own ways to replace "sequestration" including cuts to social welfare programmes such as food stamps, but these were routinely rejected by the Democratic Senate and the White House. Jay Carney, the White House press secretary, backed the proposals put forth by Ms Murray on Thursday. "The plan includes spending cuts that won't harm middle class families while closing tax loopholes that benefit the wealthiest," he said. Now, Republicans in Congress face a simple choice. Do they protect investments in education, healthcare and national defence or do they continue to prioritise and protect tax loopholes that benefit the very few at the expense of middle and working class Americans?" he added.