House Speaker John Boehner, R-Ohio., said at a news conference this morning that proposals for comprehensive tax reform are “under discussion” in the debt-ceiling talks between the White House and Congress.
“We believe comprehensive tax reform both on the corporate side and personal side would make America more competitive, help create jobs in our country and is something that is under discussion,” Boehner said.
Boehner’s remarks came about one hour before he and a handful of bipartisan congressional leaders began meeting President Obama at the White House to discuss a deficit-reduction package needed to raise the $14.3 trillion debt limit. Boehner would not say whether a deal on tax reform could be hammered out by August 2, the deadline the Treasury says must be met to avoid the federal government’s first default in history. However, Reuters reports that the Treasury is secretly weighing options to stave off a default should Congress fail to raise the debt ceiling by August 2.
According to initial White House pool reports, at the start of the meeting Obama sat in the middle of the big Cabinet Room table, flanked on his right by Boehner and on his left by Senate Majority Leader Harry Reid, D-N.V. Lawmakers sat on one side of the table with their backs to the windows overlooking the Rose Garden. Other attendees included: House Minority Whip Steny Hoyer D-Md.; House Majority Leader Eric Cantor, R-Va.; House Minority Leader Nancy Pelosi, D-Calif.; Senate Minority Leader Mitch McConnell, R-Ky.; Sen. Dick Durbin, D-Ill.; and Senate Minority Whip Jon Kyl, R-Ariz.
Rather than roughly $2 trillion in savings that the Joe Biden-led deficit group had identified in savings, the White House is now seeking a plan that would slash more than $4 trillion from annual budget deficits over the next decade, stabilize borrowing, and defuse the biggest budgetary time bombs that are set to explode as the cost of health care rises and the nation’s population ages, The Washington Post reported.
“I’m increasingly encouraged that policymakers will come to terms on the debt ceiling in a reasonably timely way,” Mark Zandi, chief economist with Moody’s Analytics told The Fiscal Times. “It looks possible that policymakers will agree to substantive and sustainable deficit reduction, amounting to about $4 trillion over the next decade. This is exactly what is needed to get to fiscal sustainability. Most of the deficit reduction will occur via government spending cuts, which is appropriate, but there will also be some cuts to tax expenditures, which is also needed. If policymakers get close to this script, it will be a big plus for financial markets, the economy, and most importantly the job market.”
Boehner reiterated the Republican’s hard position that tax hikes would not be part of the negotiating terms. “Everything is on the table except raising taxes on the American people,” he said. Yesterday, Cantor said his party may be willing to close tax loopholes if they were offset by tax cuts elsewhere. Democrats have insisted raising taxes should be part of a comprehensive budget plan. Cantor’s comments signal a shift by the Republican House Leadership, which up until yesterday said closing loopholes should wait for a comprehensive overhaul of the tax code.
When asked if the President and Congressional leaders were closer to a deficit deal today, Boehner said: “The conversations have gone on for weeks, both at the Biden group and between the President and myself but there is no agreement.”
Read more on the debt limit from The Fiscal Times
Obama Ups the Ante with Social Security, Medicare Cuts
GOP May Close Tax Loopholes if Rates Are Reduced
The GOP: Between a Rock and Tea Party Wrath