The people’s budget.

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And what`s the best plan to reduce the deficit? The Ryan plan or the Obama plan? How about the people`s plan? Why isn`t anybody paying attention to the Progressive Caucus plan?

O`DONNELL: You`ve seen the Paul Ryan abolish Medicare and cut taxes Republican budget, and you`ve heard the president`s description of his counterproposal. So, which one do you like? If your answer is neither, you might want to consider the people`s budget, introduced by the Congressional Progressive Caucus, a group of 76 Democrats.

Joining me now for a guided tour of the people`s budget is Ezra Klein, columnist for “The Washington Post.”

Thanks for joining me, Ezra.

EZRA KLEIN, MSNBC CONTRIBUTOR: Happy to serve.

O`DONNELL: Ezra, I know Rachel has done some coverage of the people`s budget, but it has otherwise been largely ignored. Take us through the highlights of the people`s budget and what its selling points are.

KLEIN: Sure. So, the people`s budget is looking at how you would balance the budget if you were going to do it largely through tax increases and mostly for taxes on the wealthy.

So, it lets most of the Bush cuts expire, keeping a couple of the one from lower income folks. In that way, it goes a lot further than Obama does. It does a lot of — it creates new millionaire tax brackets. It taxes capital gains as normal income, taxes dividend income higher.

It raises a bunch of corporate taxes. It creates a tax on financial transactions. It cuts 1.8 trillion for the defense budget and invests $1.4 trillion in sort of new job, education, science, et cetera, initiatives.

So, it does a lot more on balancing the budget on the tax side, but also — and I think this is an important part of it, opens up a space for new investment, which just about none of the budgets currently on the table do.

O`DONNELL: And do they do anything about energy taxation in this plan?

KLEIN: No, they don`t.

O`DONNELL: Any gasoline tax, any environmental-based taxes?

KLEIN: No. And when I began to talk to tax experts about it, they said a couple of things. One, they said, one, there`s not enough tax reform in the plan. They`re just sort of stacking new taxes on top of one another. And in that way, they enhance a couple of the tax systems` worst tendencies right now.

The capital gains tax, the way they have, it wouldn`t work. People said.

And lot of these guys said the same thing to me. They said, look, this budget does a lot of very brave and a lot of very smart things. But what it needs to do is more tax reform and more creative taxation. So, taxing energy is something that would work a lot better. A lot of people brought up a value-added tax, which would work a lot better.

A lot of them liked the people`s budget, but they didn`t think they had gone quite far enough in terms of new thinking on taxes.

O`DONNELL: And this is the only budget that takes a serious look at defense spending. Something that says, OK, wait a minute, what are we really going to need to do going forward?

KLEIN: Well, let me go — let me give a couple other people credit here. There are five budgets on the table. Of them, the Obama and Ryan budgets are the two worst, on a lot of measures, but defense spending being one of them.

The fiscal commission, Simpson-Bowles, did twice as many defense cuts as Obama and, by the way, raised another $450 million in taxes. The odd thing about the Obama budget is to the right of the fiscal commission document, which was a compromise among Tom Coburn and Dick Durbin and others. And I don`t think people have really absorbed that.

And then there`s another budget by the Bipartisan Policy Center, which also went after defense spending. When you get to the people who aren`t worried about their passing their budgets tomorrow, there`s a broad agreement that the defense sector is bloated and we need very significant cuts in it.

But when you get to Obama and when you get to Ryan, they really sort of whiffed on it. They — they really stood down from that particular fight.

O`DONNELL: Now, and the real defense experts will tell you, we do have to change the nature of our defense posture, which happens to save us money, even if that isn`t our intent, when we look at what the threats are going forward. We`re no longer in that big Cold War posture.

Ezra Klein of “The Washington Post” — thank you very much for joining me tonight.

KLEIN: Thank you.