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Democrats Seek to Set Sharp Lines in Measuring GOP ‘Fiscal Cliff’ Proposals

Chris Maddaloni/CQ Roll Call File Photo
Sen. Charles Schumer said It is “not mathematically possible” to target the tax credits and deductions Republican leaders have said could be part of a tax agreement without also raising taxes on people making less than $250,000.

Murray said the expiration of all the cuts Jan. 1 changes the political calculation. With rates returning to their old levels, Democrats could then push for a new middle-class tax cut, essentially daring Republicans to oppose a tax cut for the vast majority of the public.

“That might be the way to do it,” she said.

But Schumer and others say the higher rates also should figure into the calculations on revenue in the current negotiations, allowing lawmakers to use the “scoring” of revenue proposals to hit needed targets for deficit reduction.

“I’m all for doing tax reform,” Rep. Chris Van Hollen (Md.), the ranking Democrat on the Budget Committee, said on Fox News. “The issue is, from what starting point? And I think the Simpson-Bowles [deficit reduction commission] starting point, which assumes that revenue from 39 percent, is the right way to go.”

“If what Speaker Boehner was saying, he is truly willing to get what we consider Congressional Budget Office-scorable revenue, then we can begin to work with one another,” Van Hollen said. “The tone was good. I think the jury is still out on exactly what the substance of what he said is.”

Budget analysts will apply that scoring to numerous measures beyond basic tax rates that may come to the negotiating table, and Republicans are considering numerous proposals, from deductions and investment income to what Sen. Tom Coburn (R-Okla.) said is “waste” in federal spending.

“We’re at historic lows on revenues,” Coburn said on “Meet the Press.” “I agree we have to go there, but how we go there is very important in terms of incentives for capital investment in this country.”

Coburn suggested one area to get revenue would be by limiting total deductions and exemptions and by restricting those limitations to income beyond $250,000, the Democrats’ magic number for the middle class.

Other plans could allow rates for capital gains and dividend income to rise while keeping rates for ordinary income at current levels.

“I think there’s the basis for the deal,” Corker said. “Republicans are willing to put revenue on the table if we do it in a pro-growth way. The tragedy would be that we don’t go over the cliff because we kick the can down the road.”

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