Key players in debt ceiling talks spent the day before a White House meeting on the topic discussing tax proposals that wouldn’t reduce the deficit, shooting down plans from their colleagues, releasing far-afield budget blueprints and trading tweets.
Overall, neither Democrats nor Republicans made much progress toward a deal as they head to a leadership meeting with President Barack Obama today.
House Majority Leader Eric Cantor said he was open to closing tax loopholes — but only with a Grover Norquist-approved catch. Cantor said any revenue from closing loopholes should go toward cutting other taxes, not shrinking the deficit.
“If the president wants to talk loopholes, we’ll be glad to talk loopholes,” the Virginia Republican said in his weekly briefing. “We’ve said all along that preferences in the code aren’t something that helps economic growth overall. Listen, we’re not for any proposal that increases taxes, and any type of discussion should be coupled with offsetting tax cuts somewhere else.”
That would comply with the Norquist pledge most Republicans have signed to never raise taxes; it just might not get the two parties much closer to a deal.
McCain said Republicans should “agree to certain tax increases and closing loopholes but only in return for an overall reduction of the corporate tax rate. That way, Republicans can say that we have not raised taxes overall, and the administration and the Democrats can say that they eliminated loopholes and indeed made the taxation of Americans more fair.”
But Senate Minority Leader Mitch McConnell threw some cold water on such ideas from his own party, continuing to question whether there is time to do a broader tax reform package. “To sort of cherry-pick items in the context of this current negotiation with the White House strikes me as — as pretty challenging,” the Kentucky Republican said.
And McCain and Cantor dismissed the demand by some Republicans that a balanced budget amendment pass before voting on a debt limit increase. McCain said it has no chance of passing; Cantor said he didn’t want to condition his vote on Democratic votes. A constitutional amendment would require two-thirds of both chambers and, therefore, would have to be bipartisan.
Sen. Charles Schumer, the No. 3 Democrat, said Republicans seem to be “on their heels” because of the Democratic drumbeat on loopholes. “The point isn’t to get rid of these loopholes simply to pay for new tax breaks elsewhere; it’s to do it in a way that contributes to the reduction of the debt,” the New York lawmaker said.