Republican Defectors Ready to Back Tax-Rate Compromise

Wednesday, 05 Dec 2012 03:12 PM

 

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A few dozen Republicans have joined a bipartisan call to break the impasse between President Barack Obama and House Speaker John Boehner over taxes for the highest-earning Americans.

The Republicans signed a letter calling for exploration of “all options” on taxes and entitlement programs, a signal that some rank-and-file members are ready to bargain.

One of the petition leaders, Representative Mike Simpson of Idaho, says he could accept higher rates for married couples earning more than $500,000 a year, in exchange for an overhaul of spending on entitlements such as Medicare.

Editor's Note: How to Pay Zero Taxes . . . Legally

Separately, Representative Kay Granger of Texas is endorsing Oklahoma Republican Tom Cole’s call to extend all tax cuts for middle-class earners as “just the right thing to do.”

What unifies these lawmakers is a recognition that Obama’s re-election has strengthened his hand in negotiations aimed at averting more than $600 billion in automatic tax increases and spending cuts set to take effect in January. The letter’s approximately 80 signers are half-Republican, half-Democratic, according to Simpson spokeswoman Nikki Watts.

“It’s pretty obvious Obama won the election, and he promised he was going to raise taxes on the wealthiest,” Simpson said in an interview. “What Republicans said is ‘We’ve got to have entitlement reform.’”

Unpalatable Trade

While it may be an unpalatable trade for both sides, he said, “There’s enough sane people left to get it done.”

A trade-off of higher taxes for entitlement spending cuts would require Boehner to convince more than 100 of his majority party to join House Democrats in approving a deal.

Representative Steve LaTourette of Ohio says Boehner could get the 218 votes needed to send a tax increase to the Democratic-run Senate if about 120 House Democrats “buy in” to entitlement cuts, such as raising the eligibility age for Medicare or adjusting the annual Social Security cost-of-living adjustment.

“You could get enough Republicans to bring it over the line,” he said.

The sentiments of LaTourette, Simpson and allies suggest a path around the primary obstacle to a deal. It includes Obama’s insistence on raising tax rates for couples earning more than $250,000 a year with Boehner’s approach of curbing tax deductions.

Obama, in a Dec. 4 interview with Bloomberg Television, said he is “flexible,” so long as tax rates are increased.

Editor's Note: How to Pay Zero Taxes . . . Legally

© Copyright 2014 Bloomberg News. All rights reserved.

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