National debt talks: Signs some in GOP may yield on tax 'loopholes'?
Republican and Democratic leaders resume talks with President Obama Thursday on raising the national debt limit and bringing down the deficit. Will anyone bring more to the table this time?
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Since then, Senator Coburn has launched efforts in the Senate to cut tax loopholes in a bid to direct savings to debt reduction. On June 16, 33 Republicans joined 38 Democrats to eliminate the 45-cents-per-gallon tax credit for refiners who blend ethanol with gasoline. In the runup to this vote, ATR president Grover Norquist sent senators letters outlining options that would allow them to send a “symbolic message” on ethanol, without violating the ATR tax pledge, including voting down the underlying bill.Skip to next paragraph
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“That’s exactly what happened,” says Mr. Norquist, who also briefed GOP senators. “Everybody knew the rules. Every pledge-taker voted to kill the underlying bill.”
Meanwhile, Democrats are focusing most of their fire on Republicans on the issue of tax loopholes.
“We need to look for wasteful spending everywhere in the budget. But the Republicans stubbornly insist that spending on tax earmarks for special interests or special treatment for millionaires should not even be part of the discussion,” said Sen. Debbie Stabenow (D) of Michigan, in a briefing on Wednesday. “The choice we face is very clear. Republicans target seniors and the middle class while protecting special treatment for special interests and millionaires and billionaires.”
After taking a pounding from Democrats over defending “tax breaks for billionaires,” House majority leader Eric Cantor (R) of Virginia said Wednesday that tax loopholes were not the reason he walked out of debt-limit negotiations with Vice President Joe Biden on June 23, prompting the talks to grind to a halt.
“If the president wants to talk loopholes, we'll be glad to talk loopholes,” he said in his first public remarks since the walkout, and his first indication that tax breaks or subsidies were open for discussion. “We've said all along that preferences in the code aren't something that helps economic growth overall. But, listen, we are not for any proposal that increases taxes, and any type of discussion should be coupled with offsetting tax cuts somewhere else.”
Democrats, too, face tough choices on issues they had hoped to shield during debt negotiations, such as entitlements.
On Wednesday, House minority whip Steny Hoyer said everything must be on the table, including entitlements.
“The Republicans need to put everything on the table and understand you cannot get there from here without putting everything on the table, which includes revenues and, from our perspective, includes entitlements and includes discretionary spending, both on the defense side and on the nondefense side,” he said.
“Republicans have proposed means testing – we have proposed that wealthier people should pay more for benefits or not get as many of them as others. That is something we have proposed and the other side has generally not been willing to consider,” he said Wednesday.
At the White House on Thursday, that could change.