Will Republicans Agree to Increased Revenue in Supercommittee Debt Deal?
Congressional Republicans opposed revenue increases to lower deficits during the debt ceiling negotiations. As the Joint Select Committee on Deficit Reduction, or “supercommittee,” nears its deadline, however, more Republicans have been voicing support for a large, $4 trillion, deficit reduction package that would include revenue increases. Speaker of the House John Boehner (R-Ohio) and Mike Simpson (R-Idaho) both showed support for such a deal in separate interviews on Sunday.
“I believe that we can create revenue out of fixing our tax code, and bring that revenue to the table, as long as our colleagues on the other side of the aisle are serious about cutting spending,” Boehner said on ABC's “This Week.”
The supercommittee was created by the Budget Control Act of 2011, which raised the nation's debt ceiling. The supercommittee is supposed to craft a bill by Nov. 23 that will cut future budget deficits by at least $1.2 trillion over the next decade. The six Republicans and six Democrats on the supercommittee have reportedly been at an impasse over revenue increases. Republicans do not want to increase taxes and Democrats do not want to cut spending on entitlements (Social Security, Medicare and Medicaid) without tax increases on the wealthy.
By “fixing the tax code,” Boehner is suggesting doing away with deductions and credits for individuals and corporations and lowering overall rates. The federal government would see increased revenue by eliminating deductions and credits, even as the overall rates would be lowered. Boehner is also suggesting that economic growth would come from lower rates on corporations and that growth would increase revenue for the federal government.
President Obama's National Commission on Deficit Reduction has said that at least $4 trillion in deficit reduction is necessary to put the nation's finances on a path toward fiscal sustainability.
Reps. Mike Simpson (R-Idaho) and Heath Shuler (D-N.C.) wrote a Nov. 2 letter to the supercommittee members urging them to seek at least $4 trillion in deficit reduction and to keep “all options for mandatory and discretionary spending and revenues” on the table. That letter has been signed, so far, by 103 Democratic and Republican members of Congress. Simpson and Shuler were interviewed on “Fox News Sunday.”
“The reality is, you cannot get to $4 trillion without including additional revenues,” Simpson said.
Simpson also echoed Boehner's position when he said, “I think you could get additional revenues by actually lowering the tax rates and eliminating all the exemptions underneath … and I think you'd have an economic boom in this country and the revenue would come into the federal government. More revenue is key to this.”
Almost all Republicans in Congress have signed a pledge with Americans for Tax Reform (ATR) saying that they would not raise taxes. Grover Norquist, head of ATR, has said that he supports eliminating deductions in the tax code, but those reforms must be used to lower overall rates such that they are revenue neutral. Otherwise, Norquist says, the tax reforms would be a violation of the pledge.
Simpson, who has signed the pledge, said that some revenues should be used for deficit reduction. “Some of it would go to deficit reduction. It has to, if you're going to get to $4 trillion, and everybody agrees that you've got to get to $4 trillion to stabilize our debt and start decreasing the deficit.”
When asked about the ATR pledge, Simpson laughed as he said, “I signed that in 1998 when I first ran. I didn't know I was signing a marriage agreement that would last forever.”
During the negotiations to increase the nation's debt ceiling, Boehner held private negotiations with Obama to seek a $4 trillion deficit reduction package that would include revenue increases and entitlement reforms. Those negotiations collapsed. Boehner said Sunday that the failure of those negotiations was his biggest regret.
Boehner, who has a reputation for crying in public, seemed to be holding back tears when he said, “I thought that, for the good of the country, [Obama] and I could have solved this problem. We could have passed a significant bill to reduce our long term obligations. Listen, we've made promises to ourselves that our kids and grandkids cannot afford and we have to deal with them.”
Boehner was also asked about the Occupy Wall Street movement, which has popularized the notion that the top one percent of Americans, in terms of wealth, have not been paying their fair share.
“Oh, come on,” Boehner said in an exasperated voice, “the top one percent pay 38 percent of the income taxes in America. How much more do you want them to pay? Let's take all the money that the rich have, all of it, it won't even put a dent in our current budget deficit, much less our debt.”