GOP Defectors Weigh Deal on Tax-Rate Increase
By Heidi Przybyla on December 06, 2012
House Republican Defectors Ready To Back Deal on Tax Increases
House Speaker John Boehner is under pressure to defy Republican Party orthodoxy on income taxes to rein in the U.S. deficit, with an increasing number of his rank- and-file members saying they’re willing to discuss raising rates for top earners.
A few dozen Republicans have joined a bipartisan call to consider “all options” on taxes and entitlement programs, signaling they are ready to bargain on President Barack Obama’s main condition for a budget deal this month: a tax rate increase for the top 2 percent of U.S. earners.
Obama and Boehner spoke by telephone yesterday, said Boehner spokesman Michael Steel, after offering their proposals in the past week to cut the deficit, which has topped $1 trillion in each of Obama’s four years in office. More than $600 billion in tax increases and federal spending cuts will start taking effect in January unless Congress acts.
“We’re at a fork in the road,” said former New Hampshire Senator Judd Gregg, a Republican. Obama and Boehner need to realize “they have to get in a room and work out a deal,” he said, or positions will “start to harden and both sides to some degree are going to be willing to accept going over the cliff.”
Both sides must move out of their ideological corners, and that is best done behind closed doors, said Senate Budget Committee Chairman Kent Conrad of North Dakota, a Democrat.
‘Back and Forth’
“I’m not certain that volleying back and forth publicly is the way to resolve this,” Conrad said. “Everything’s on the table now, which needed to happen.”
Boehner, an Ohio Republican, proposed a $2.2 trillion plan this week that would raise revenue by curbing tax breaks. He insists he won’t agree to higher tax rates at any income level.
While Obama opposes Republicans’ approach to generating revenue solely by limiting tax breaks, his budget proposal in February included more than $750 billion in revenue from top earners by curtailing tax breaks. His new deficit-cutting plan would raise $1.6 trillion in tax revenue over the next decade.
Treasury Secretary Timothy Geithner said in an interview on CNBC yesterday that the administration “absolutely” is willing to go over the so-called fiscal cliff of tax increases and spending cuts if Republicans don’t agree to raise tax rates on the highest-income earners.
To sum it all up, Republicans want to try to fix the economy, offering a solution that raises revenue without violating some of their principles. Obama on the other hand won't back down from his own principle of raising taxes, no matter the costs.