Boehner: Debt panel can start on major tax changes

House Speaker John Boehner of Ohio talks about the econ­omy dur­ing an address at the Eco­nomic Club of Wash­ing­ton, in Wash­ing­ton, D.C., Thurs­day. Boehner said the con­gres­sional com­mit­tee charged with rec­om­mend­ing large deficit cuts should lay the ground­work for tax changes that would enhance eco­nomic growth. (AP Photo/Evan Vucci)

DAVID ESPO

AP Spe­cial Correspondent

WASHINGTON (AP) — House Speaker John Boehner urged Con­gress’ deficit “super­com­mit­tee” on Thurs­day to lay the ground­work for a broad over­haul of the U.S. tax code, reject­ing Democ­rats’ talk of tax increases but leav­ing open the pos­si­bil­ity the government’s take could rise as a result.

Tax increases “are not a viable option” for the com­mit­tee, Boehner declared in a speech to the Wash­ing­ton Eco­nomic Club, rul­ing out many of the pro­pos­als that Pres­i­dent Barack Obama is expected to for­ward to the 12-member panel next week, includ­ing some that are part of his major jobs proposal.

Boehner made his remarks as White House offi­cials dis­closed that Obama intends to travel to Cincin­nati next week as he cam­paigns for pub­lic sup­port of his $447 bil­lion pro­posal to cut into the nation’s 9.1 per­cent unem­ploy­ment rate. The polit­i­cal sym­bol­ism of the site was unmis­tak­able — an over­crowded bridge that links Boehner’s Ohio with Sen­ate GOP leader Mitch McConnell’s Ken­tucky, a span the pres­i­dent has cited as an exam­ple of the repair work his jobs pro­gram would make possible.

Sep­a­rately, White House spokesman Jay Car­ney said Obama will not rec­om­mend any bud­get sav­ings from Social Secu­rity when he releases his rec­om­men­da­tions to the deficit-cutting com­mit­tee next week, despite the pres­i­dent sig­nal­ing sup­port for that idea in sum­mer­time debt-reduction talks with Boehner.

Car­ney declined to say what, if any, rec­om­men­da­tions the pres­i­dent might make to find sav­ings from Medicare.

The day’s events under­scored the extent to which the com­mit­tee of 12 law­mak­ers is likely to be guided by the views of the most senior lead­ers in both polit­i­cal par­ties as it tries to develop leg­is­la­tion to reduce deficits by $1.2 tril­lion or more over a decade.

The panel has almost unlim­ited author­ity to rec­om­mend changes in fed­eral spend­ing and taxes and is work­ing against a dead­line of Nov. 23. It held a closed-door meet­ing dur­ing the day, but offi­cials declined to pro­vide details of what was discussed.

In his speech, Boehner was alter­nately crit­i­cal of Obama’s eco­nomic poli­cies and some­what conciliatory.

“Busi­nesses are not going to hire some­one for a $4,000 tax credit if gov­ern­ment man­dates impose long-term costs on them that sig­nif­i­cantly exceed the tem­po­rary credit,” he said, describ­ing a por­tion of what the pres­i­dent asked Con­gress to approve in his jobs program.

“Let’s be hon­est with our­selves,” he said. “The president’s pro­pos­als are a poor sub­sti­tute for the pro-growth poli­cies that are needed to remove bar­ri­ers to job cre­ation in America.”

The cen­ter­piece of Obama’s jobs pro­gram is a one-year exten­sion of Social Secu­rity pay­roll tax cuts for work­ers, expanded to include busi­nesses. He is also seek­ing other tax breaks, as well as an exten­sion of unem­ploy­ment ben­e­fits, aid to states to per­mit them to hire teach­ers and first respon­ders, and con­struc­tion fund­ing for high­ways and bridges like the one he intends to visit in Ohio next week.

Asked whether the con­gres­sional debt panel might include some of Obama’s jobs rec­om­men­da­tions in its own work, Boehner said, “I think it’s too early to deter­mine whether some of it ends up being the work of the … com­mit­tee or whether we do it separately.”

Any broad com­pro­mise that clears the bipar­ti­san com­mit­tee is almost cer­tain to require Demo­c­ra­tic agree­ment to sav­ings from ben­e­fit pro­grams such as Social Secu­rity and Medicare, along with Repub­li­can acqui­es­cence to addi­tional rev­enues, although any such trade­offs are rarely dis­cussed openly until the last pos­si­ble moment in negotiations.

The committee’s char­ter is to cut deficits, and Boehner said, “That has every­thing to do with jobs.”

Rul­ing out tax increases, he said the panel has “only one option, spend­ing cuts and enti­tle­ment reforms,” a ref­er­ence to gov­ern­ment ben­e­fit pro­grams such as Social Secu­rity, Medicare and Medicaid.

At the same time, he said the com­mit­tee ‘can tackle tax reform and it should.” Boehner said it was prob­a­bly unre­al­is­tic to expect the panel to rewrite the tax code by Nov. 23. “But it can cer­tainty lay the ground­work by then for tax reform in the future that will enhance the envi­ron­ment for eco­nomic growth.”

He said the ele­ments of an even­tual over­haul of the tax code would be lower rates for indi­vid­u­als and cor­po­ra­tions while clos­ing deduc­tions, cred­its, and spe­cial carve-outs.

“Yes, tax reform should include clos­ing loop­holes. Not for the pur­poses of bring­ing more money to the gov­ern­ment. But because it’s the right thing,” he said.

Boehner did not rule out that tax changes might result in addi­tional gov­ern­ment rev­enue, and offi­cials in both par­ties say that in his talks with Obama last sum­mer the two men were dis­cussing the pos­si­bil­ity that an over­haul could mean as much as an addi­tional $800 bil­lion for the Trea­sury over a decade.

At the White House, Car­ney said, “I would sim­ply note that the speaker of the House made clear that in the nego­ti­a­tions he had with the pres­i­dent, he put, in his words, rev­enues on the table. Well, we believe rev­enues have to be on the table if we’re going to solve our deficit and debt problems.”

Sim­i­larly, in the same talks, Obama appeared will­ing to include a pro­vi­sion to slow the growth in cost-of-living increases in Social Secu­rity and to raise the age of eli­gi­bil­ity for Medicare from 65 to 67.

Both pro­vi­sions sparked strong oppo­si­tion from lib­eral law­mak­ers in the president’s own party, and it was not clear whether Obama has decided to rule them out of any future talks or was merely was shelv­ing them for the time being.

The col­lapse last July of the talks between Obama and Boehner led to leg­is­la­tion that cut spend­ing by nearly $1 tril­lion over a decade, averted a first-ever gov­ern­ment default and cre­ated the debt com­mit­tee that is just now begin­ning its work in earnest.

Posted by AP News on Sep 15 2011. You can follow any responses to this entry through the RSS Feed. Comments can be made below.