Hensarling: $300 Billion Tax Revenue is GOP's Best Offer

Wednesday, 16 Nov 2011 02:33 PM

 

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With a week remaining before the deadline to find a way to cut the U.S. deficit, the anti-tax and entitlement-protecting camps of Congress’s supercommittee are hardening their positions.

“It’s a critical day,” supercommittee co-chairwoman Senator Patty Murray, a Washington Democrat, said today. “We are not going to accept a plan that gives a tax break to the wealthiest Americans and balances all of this incredible challenge we have on the backs of middle-class Americans.”

Yesterday, Texas Representative Jeb Hensarling, the panel’s Republican co-chairman, said his party wouldn’t go beyond its offer to increase tax revenue by $300 billion to cut the debt.

“We have gone as far as we feel we can go,” Hensarling said in an interview on CNBC’s “Kudlow Report” program. “Any penny of increased static revenue is a step in the wrong direction.”

Murray said today, “I heard some of the comments and I hope that they have not walked away.”

Pressure is mounting for both parties to come together on a plan by the end of the week so the committee can vote by its Nov. 23 deadline. Failure to enact a debt-cutting plan of at least $1.2 trillion this year would force $1.2 trillion in automatic spending cuts beginning in 2013. Democrats are opposing reductions in entitlement programs such as Medicare, as sought by Republicans, unless Republicans agree to large increases in tax revenue.

New Revenue

Democrats on the supercommittee are weighing whether to reduce to about $800 billion their demand for new tax revenue, a Democratic aide said yesterday.

Last week, Democrats proposed a plan that would include $1 trillion in new revenue, $1 trillion in spending cuts and $300 billion from interest savings. A second Democratic aide said the spending cuts in any new proposal also would be smaller, without giving an amount. Both aides weren’t authorized to speak publicly.

Some lawmakers had hailed Republicans’ offer last week for $300 billion in tax increases as a breakthrough demonstrating new support in the party for higher taxes. After Democrats rejected the plan, talks stalled.

The question is whether Republicans have “said ‘take it or leave it’ and don’t want to negotiate,” said Democratic Representative Chris Van Hollen of Maryland today before meeting with fellow party members on the supercommittee.

‘Not Sure’

Asked yesterday whether he believed a deal was coming together, Arizona Senator Jon Kyl, a Republican on the panel, said, “I’m not sure.”

When there’s still time to talk, an agreement is possible, New Hampshire Republican Senator Kelly Ayotte said. “As you know in Washington, it’s always darkest before a deal,” Ayotte told the U.S. Chamber of Commerce in Washington today. “What you see right now with the back and forth, there is still time to work this out.”

A bipartisan group of senators and House lawmakers today reiterated their call for the panel to “go big” with a deal of as much as $4 trillion. Earlier, 45 senators signed a letter calling for a larger plan, while a separate House letter got 102 signatures.

“The seriousness of the debt challenge can only be met with an equally serious and bipartisan determination to do what needs to be done,” House Minority Whip Steny Hoyer, a Maryland Democrat, said at a news conference. Dozens of lawmakers joined him, including Senator Lamar Alexander of Tennessee, the chamber’s No. 3 Republican leader, and Senator Richard Durbin of Illinois, the No. 2 Democratic leader.

‘More on the Table’

Alexander suggested he was willing to accept more tax revenue than Hensarling offered. Noting that Republicans have offered more revenue and Democrats have offered to reduce entitlements, he said, “Both need to put more on the table and get a result and we’re here to support them.”

Yesterday, House Speaker John Boehner of Ohio said fellow Republicans’ proposal, including $300 billion in new tax revenue through a tax-code overhaul, was a “fair offer.” He also said that if the supercommittee reached an agreement he believed the House could pass it.

Overhauling the tax code would be a “step in the right direction,” Boehner said.

Senator Pat Toomey, a Pennsylvania Republican on the supercommittee, outlined his party’s plan last week and said Nov. 13 on “Fox News Sunday” that he was open to compromise. His proposal would reduce the top income tax rate from the current 35 percent to 28 percent for the highest earners, and increase the Medicare eligibility age to 67 from 65.

Senator John Kerry, a Massachusetts Democrat on the committee, said in response to Hensarling’s comment: “When people go public and say what they’re willing or not willing to do it isn’t as helpful as sitting at a table and trying to work through these things. My hope is we have time.”


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