Bloomberg News

Boehner Says He’s Convinced a Deficit Plan Could Pass House

November 18, 2011

(Updates with comments by Reid and McConnell beginning in fourth paragraph.)

Nov. 15 (Bloomberg) -- House Speaker John Boehner said the Republican-run chamber could pass a deficit-cutting agreement if one is reached by a bipartisan supercommittee of Congress assigned to find $1.2 trillion in savings.

“I’m convinced that if, in fact, there is an agreement, that it can, in fact, pass,” Boehner of Ohio told reporters in Washington today.

The speaker said he considers a proposal that includes higher tax revenue by supercommittee member Senator Pat Toomey, a Pennsylvania Republican, or “something like” it, to be a “fair offer.” Overhauling the tax code would be a “step in the right direction,” he said.

Boehner met today with Senate Majority Leader Harry Reid of Nevada, although Reid said their conversation about debt- reduction negotiations was “nonsubstantive.” Reid told reporters “the last minute is fast approaching” for the supercommittee’s work.

A failure to enact a debt-cutting plan this year would force $1.2 trillion in automatic spending cuts beginning in 2013. Reid said he wouldn’t vote to undo those cuts, as has been suggested by some Republicans who fear the impact of deep defense cuts.

Senate Minority Leader Mitch McConnell said the focus should remain on getting a bipartisan result from the panel’s deliberations, “and I expect to get one.”

Nov. 23 Deadline

Lawmakers are trying to break a partisan impasse over tax increases in exchange for spending. The panel’s six Democrats and six Republicans remain hundreds of billions of dollars apart on the tax revenue issue with eight days until the Nov. 23 deadline.

Two days ago, Toomey said on “Fox News Sunday” that he was open to compromise on his proposal to modify the tax code to bring in what Republicans say would be $300 billion in additional revenue to cut the deficit. His plan also would raise the Medicare eligibility age to 67 from 65.

Toomey’s proposal, which would reduce the top tax rate to 28 percent for the wealthiest Americans, “certainly is not a balanced, fair approach,” Chris Van Hollen, one of the three House Democrats on the supercommittee, told reporters.

The plan would have “the effect of reducing the tax burden on higher income individuals and shifting it to middle-income earners,” said Van Hollen of Maryland.

Bridging Differences

Both sides are showing a willingness to try to bridge their differences and reach a plan that balances cuts and revenue, said Van Hollen.

“We’ve been having a lot of conversations to see if we can’t find a way,” he said. The “jury is still out” on whether a deal can be reached, Van Hollen said.

Boehner signaled that Republicans are open to further discussions on the tax plan, saying “the details of how we get there” have “yet to be worked out.”

Boehner also suggested that Republicans are open to using the budget savings from winding down the wars in Iraq and Afghanistan to finance an extension of unemployment insurance benefits and a payroll tax holiday for workers, both set to expire this year. In the past, Boehner has said using those war savings would be an accounting gimmick.

“Those issues have clearly been under discussion between members of the supercommmittee as part of some options,” Boehner told reporters. “It’s too early to predict how those issues will be dealt with.”

Sustainable Path

House Democratic Whip Steny Hoyer told reporters he believes the “supercommittee can get a report done” to help “bring our fiscal posture to a sustainable path.” Hoyer of Maryland said many Democrats are likely to vote for such a deal, noting that a “very, very large number” supported the legislation that set up the panel.

Toomey’s offer on tax revenue is running into resistance from Washington-based FreedomWorks and the Alexandria, Virginia- based National Taxpayers Union, anti-tax groups.

Dean Clancy, a vice president at FreedomWorks, called the proposal a “dumb offer” and said his group would urge Republicans to oppose it.

“They’re opening the floodgates on tax hikes and proposing entitlement cuts that don’t give more freedom to individuals,” said Clancy, legislative counsel and vice president for health- care policy at the group, which has provided financial and other support to the Tea Party movement. “It’s a castor-oil concoction, and it confirms our prediction that the supercommittee turns into a super-tax-raising committee.”

‘Major Reservations’

Pete Sepp, executive vice president of the National Taxpayers Union, said his group has “major reservations” about the Republican proposal.

“Our preference is to see the revenue flowing from economic growth rather than stemming from a clawback” approach of limiting tax deductions and exclusions, he said. He said his group would urge members to oppose such revenue increases.

“If it were to be put forward, we would certainly engage,” Sepp said.

Meanwhile, other groups are pushing back against cuts to domestic programs. Washington-based AARP, the senior citizens’ lobbying group, said in a statement today it had collected more than 6.5 million petition signatures opposing cuts in Social Security and Medicare benefits to reduce the deficit.

--With assistance from Kathleen Hunter in Washington. Editors: Laurie Asseo, Robin Meszoly

To contact the reporters on this story: James Rowley in Washington at jarowley@bloomberg.net; Laura Litvan in Washington at llitvan@bloomberg.net

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


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