House Speaker John Boehner on Thursday urged the joint congressional committee charged with cutting $1.2 trillion from the budget to take up tax reform, even if it just makes some headway. Speaking at the Economic Club of Washington, Boehner also warned that if action isn't taken soon, markets will continue to fall.
“It’s probably not realistic to think the Joint Committee could rewrite the tax code by Nov. 23,” he said. “But it can certainly lay the groundwork for them for tax reform in the future that will … enhance the environment for real economic growth in our country.”
The reforms the committee should set in place include closing loopholes and lowering rates for individuals and corporations, said Boehner, R-Ohio.
"Making short-term fixes in exchange for long-term flawed policy is not tax reform,” he said.
Boehner’s speech was the most comprehensive GOP response yet to the $447 billion jobs plan President Obama announced on Sept. 8. The House speaker called the proposal a “poor substitute” for what the country needs.
Boehner’s call for the committee to make tax reform a priority was quickly seized upon by House Minority Leader Nancy Pelosi, D-Calif., as opening the door to closing corporate tax perks.
“Certainly tax reform is something we’ve all supported – simplification and fairness must be part of our tax code,” said Pelosi, adding that loopholes should be closed that give tax breaks to big oil or to companies that send their jobs overseas.
But she expressed caution over Boehner’s continued insistence that increasing taxes is off the table. She said “any tax reform and closing of loopholes – which is really important for us to do as a sense of fairness – must also reduce the deficit.”
“You can’t just say we’re going to have reforms that are going to lower the corporate rate, which I would fully support, unless you have enough reform to reduce the deficit, too,” said Pelosi.
Boehner, on the other hand, said that spending cuts today would have a large effect on reducing the deficit tomorrow.
The speaker called on the committee to reform entitlements, such as Social Security and Medicare, but didn’t specify how. He did offer a plan to link the next highway bill to an expansion of energy production in America to boost job growth.
Boehner also restated his warning that the markets would react if comprehensive action is not taken.
"Last month, the markets took action, if the form of a downgrade and the possibility of future downgrades that caused the markets to tumble," he said. "It's going to keep happening, until we act."
Boehner spoke after members of the super committee had a private breakfast on Thursday morning after two formal meetings at the Capitol in the last week. Its recommendations are due by Nov. 23.
Billy House contributed