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Republicans Might Concede on Tax Loopholes Republicans Might Concede on Tax Loopholes

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SUPER COMMITTEE

Republicans Might Concede on Tax Loopholes

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Congressional Budget Office Director Douglas Elmendorf, left, testifies on Capitol Hill in Washington, Tuesday, Sept. 13, 2011, before the Joint Select Committee on Deficit Reduction. (AP Photo/Evan Vucci)  (AP Photo/Evan Vucci)

Republican leaders and members of the super committee may work to close some tax loopholes in a new proposal they will present to the deficit-reduction panel’s Democrats, GOP sources said on Monday.

The move would be part of a stepped-up effort by Republican leadership and Majority Leader Harry Reid, D-Nev., to end a deadlock that has the committee tilting toward failure.

 

The six super-committee Republicans and their congressional leaders have thus far declined to consider any tax increases, including ending tax breaks, unless they are linked to broader tax reform. And the GOP has insisted that overhauling the tax code be revenue neutral—a guarantee they want written into law.

Last week, as part of a $2.2 trillion plan, super-committee Republicans proposed shaving $640 billion from the national deficit by increasing fees and Medicare copays. Their projections also assumed their plan would generate more tax revenue.

The GOP position, along with Democrats’ hesitance to agree to big entitlement cuts without Republican concessions on taxes, has left the committee deadlocked with just weeks until Thanksgiving, their deadline for recommending measures to Congress to achieve $1.2 trillion in deficit reduction over 10 years.

 

Now Republicans are willing to consider decoupling loophole closures from an overall tax-code rewrite. Any GOP offer would likely also task committees of jurisdiction with coming up with a revenue-neutral tax-reform plan, said GOP sources familiar with super-committee deliberations. They declined to cite specific tax-code changes or their total value.

Spokesmen for House Speaker John Boehner, R-Ohio, and Senate Minority Leader Mitch McConnell, R-Ky., declined to comment on such a GOP plan.

Democrats and Republicans alike remain skeptical that the super committee can succeed, calling each other’s recent offers and dismissals indications that Boehner and Reid will effectively take over negotiations to avoid triggering across-the-board cuts, a process known as sequestration.

A bipartisan group of committee members "have struck out on their own," according to a Reuters report. The three Democrats and three Republicans know the odds are against them, Reuters reported Tuesday, but it "is a deadly serious and good-faith effort to come up with a plan," a source told Reuters. 

 

In a speech on Monday at the McConnell Center at the University of Louisville, Boehner said that he “has high hopes” the panel will find common ground.

“Common ground doesn’t mean compromising on your principles,” added Boehner. “Common ground means finding the places where your agenda overlaps with that of the other party, locking arms, and getting it done—without violating your principles.”

Many believe that the super committee needs to reach an accord soon to cut a deal by Nov. 23, as mandated in August’s Budget Control Act, the compromise that ended a fight over raising the federal debt ceiling. If the super committee ultimately recommends less than $1.2 trillion in savings, sequestration would make up the difference.

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“Time is not on our side and we truly can no longer afford to wait,” former Sen. Alan Simpson, R-Wyo., and former White House Chief of Staff Erskine Bowles tell the super committee in their prepared testimony for a public hearing set for Tuesday. “Washington needs to enact a fiscal plan NOW—not next year, not after the next election, but now.”

Some Democrats, especially on the House side, think that sequestration is a feasible option because half of the required cuts would target defense spending while entitlements would be mostly exempt—a combination they say is more problematic for Republicans. GOP leaders have pushed back by highlighting sequestration’s effect on domestic spending.

To do so, GOP leaders have asked all House committees with any appropriations or authorization authority to report what cuts sequestration might cause to federal programs under their jurisdiction, GOP aides said.

Billy House and Sue Davis contributed. contributed to this article.

This article appears in the November 1, 2011 edition of NJ Daily.

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