Bloomberg News

Camp Predicts Debt Ceiling Increase, Urges Tax-Code Overhaul

July 22, 2011

(Updates with Boehner comments in eighth paragraph, Camp quote on repatriation in 14th paragraph.)

July 22 (Bloomberg) -- House Ways and Means Committee Chairman Dave Camp said Congress will raise the $14.3 trillion debt ceiling before the government runs out of cash Aug. 2.

“I think it’ll have to have the spending reductions and some of the structural reforms that we’ve been looking for,” Camp said in an interview today on “Political Capital with Al Hunt” airing on Bloomberg Television this weekend.

Camp, a Michigan Republican, also said he opposed an overhaul of the tax code that would set a revenue target that included a tax increase.

“The higher revenues make it harder to get the kind of tax reform that we need to grow our economy,” said Camp, who became Ways and Means chairman in January after Republicans took control of the House of Representatives. “And also, I really believe it will make it harder for us to create jobs.”

Camp, 58, added in an interview after the televised taping that such a revenue target wouldn’t necessarily make it impossible to overhaul the tax code, and he didn’t rule out advancing tax changes with a higher revenue target as part of a broader bipartisan deficit-reduction package.

President Barack Obama and House Speaker John Boehner have been negotiating a deficit-reduction agreement that could be paired with an increase in the debt ceiling. Democrats have insisted that higher revenue be part of the deal, and one path to that end could be a tax-code overhaul that would yield more revenue than the current one produces.

Negotiating Targets

Negotiators have been discussing setting deficit-reduction targets to be achieved through entitlement changes and a tax overhaul, and then enforcing those goals by setting up consequences to be triggered if they aren’t reached.

Boehner said today in Washington that he and Obama haven’t reached a deal.

“There is no agreement, there is no deal in private,” he said.

The House-passed budget that Camp supported sets a revenue level about equal to what the U.S. government would collect if the tax cuts expiring at the end of 2012 were extended and the tax increases in last year’s health-care law were repealed.

Camp, whose committee has jurisdiction over Medicare and Social Security, said changes to the eligibility and retirement ages for those programs should be accomplished through an agreement between Republicans and Democrats.

“Anything we do with Social Security has to be done together in a bipartisan way,” he said. “But clearly, the current path we’re on with Social Security is not sustainable.”

Repatriation Holiday

Camp, first elected to Congress in 1990, said he doesn’t favor a stand-alone tax break for U.S. multinational companies trying to repatriate offshore profits. Companies such as Microsoft Corp. and Pfizer Inc. have been lobbying for such a tax holiday.

“I think repatriation is best not done as a one-off,” he said.

Instead, he wants to consider repatriation as part of a broader overhaul of the corporate tax code, and said he is trying to produce a bill this year. Without the more expansive overhaul, he said, “then in a few short years, you have money stranded overseas that’s being invested there, not here. We want that money invested here so those plans and those high-value jobs that go with those factories and plans and structures are in the United States, not overseas.”

25% Top Rate

Camp has set a 25 percent top rate as his target for both the individual and corporate tax codes, and said today that every deduction and so-called tax expenditure will be reviewed. He said he didn’t want to “prejudge” what his committee might do on tax breaks that include the home mortgage interest deduction and the exclusion for employer-sponsored health insurance.

“The home mortgage deduction is obviously a very critical part of many people’s investment, so that is something that we’re going to look at very carefully, but do it in a way that understands just how important that is,” Camp said.

--With assistance from James Rowley in Washington. Editors: Jodi Schneider, Mark McQuillan.

To contact the reporter on this story: Richard Rubin in Washington at rrubin12@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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