(Updates with CBO report starting in seventh paragraph, Coburn op-ed in 23rd paragraph.)
July 16 (Bloomberg) -- Democrats will be in a stronger negotiating position in January if Congress doesn’t reach a deal before year’s end on the expiring George W. Bush-era tax cuts, Washington Senator Patty Murray will say in a speech today.
The public will rally behind Democrats’ push to reinstate tax reductions for married couples earning less than $250,000 a year after they see the effects of letting the cuts lapse, Murray, the Senate’s fourth-ranking Democrat, plans to say at the Brookings Institution in Washington. Republicans want to continue the tax breaks for all income levels.
“If middle-class families start seeing more money coming out of their paychecks next year, are Republicans really going to stand up and fight for new tax cuts for the rich?” Murray will say, according to excerpts of prepared remarks released by her office.
“They know this would be an untenable political position, and I hope this pushes them to come to the table with real revenue now before being forced to the table if we don’t get a deal before the new year,” the senator will say.
Murray’s comments are the latest sign that Democrats are willing to go over the so-called fiscal cliff of automatic tax increases and spending cuts at the end of the year if Republicans continue to oppose higher taxes for top earners.
$1.2 Trillion
The $1.2 trillion automatic spending cuts, known as sequestration, are scheduled to begin in January if lawmakers don’t agree on a plan to replace them.
The nonpartisan Congressional Budget Office said May 22 that allowing the scheduled spending cuts and tax increases to take effect may tip the economy back into a recession.
The CBO estimated that the spending cuts and tax increases would total $607 billion, or 4 percent of the U.S. gross domestic product, in the fiscal year starting Oct. 1. The shortfall this fiscal year is projected to be $1.2 trillion.
Today, Murray will say that she “absolutely” would prefer to “continue this debate into 2013 rather than lock in a long- term deal this year” that doesn’t include revenue increases Republicans have rejected so far.
“Anyone who tells you sequestration is going to simply disappear because both sides want to avoid it is either fooling themselves, or trying to fool you,” she will say. “It is going to have to be replaced, and that replacement is going to have to be balanced.”
Deficit Supercommittee
Murray was the Democratic co-chairwoman of the supercommittee in Congress last year created to craft a plan to reduce the deficit by $1.2 trillion over a decade.
The 12-member panel of Republicans and Democrats, established by the August 2011 law raising the federal debt ceiling, was unable to reach an agreement, setting the stage for the $1.2 trillion in across-the-board cuts.
Supercommittee Democrats “jumped right out into the middle of the ring” during the negotiations and embraced Republican- proposed spending cuts, Murray will say.
“But Republicans refused to move an inch in our direction on revenue,” she will say. “They actually tried to use a deficit-reduction committee to cut taxes for the rich even further.”
Defense Programs
The House in May passed legislation to replace automatic cuts to defense programs, which amount to half of the $1.2 trillion, with cuts to domestic programs, including food stamps. Republicans on the Senate Armed Services Committee proposed a plan to delay the automatic cuts for one year by reducing the number of federal employees.
“We are also not going to allow just the defense cuts to be replaced without addressing the domestic spending cuts that would be devastating to the middle class,” Murray will say.
President Barack Obama’s push for a tax-cut extension for all except the highest-income families is a central theme in his presidential campaign.
The Democratic-controlled Senate plans to vote as soon as next week on legislation, based on Obama’s proposal, that would extend the tax cuts through 2013 for 98 percent of U.S. households while letting them expire for income exceeding $200,000 for individuals and $250,000 for married couples.
Congressional Republicans want to extend the cuts for all income levels for one year and set up a framework for a broader tax-code overhaul in 2013. The Republican-controlled House plans to vote later this month on that plan.
‘No Reason’
Murray will say, “There is absolutely no reason, not one, that we need to extend the tax cuts for the rich as a precondition for reforming the tax code.”
Continuing a Democratic line of attack, Murray will blame Republican opposition to any revenue increases on the influence of the Tea Party base and anti-tax advocate Grover Norquist’s pledge not to raise taxes.
All except six House Republicans and seven Senate Republicans have signed the pledge promoted by Norquist, the president of Americans for Tax Reform.
In an opinion article published in today’s New York Times, Senator Tom Coburn, an Oklahoma Republican, said Norquist was Democrats’ “favorite boogeyman” and that Republican lawmakers “repeatedly rejected Mr. Norquist’s strict interpretation of his own pledge.”
“While most Republicans do, of course, oppose tax increases, they are hardly the mindless robots Democrats say they are,” Coburn wrote. All but six Senate Republicans last year supported eliminating an ethanol production tax credit, he said.
--Editors: Laurie Asseo, Jodi Schneider
To contact the reporter on this story: Kathleen Hunter in Washington at [email protected]
To contact the editor responsible for this story: Jodi Schneider at [email protected]
July 16 (Bloomberg) -- Democrats will be in a stronger negotiating position in January if Congress doesn’t reach a deal before year’s end on the expiring George W. Bush-era tax cuts, Washington Senator Patty Murray will say in a speech today.
The public will rally behind Democrats’ push to reinstate tax reductions for married couples earning less than $250,000 a year after they see the effects of letting the cuts lapse, Murray, the Senate’s fourth-ranking Democrat, plans to say at the Brookings Institution in Washington. Republicans want to continue the tax breaks for all income levels.
“If middle-class families start seeing more money coming out of their paychecks next year, are Republicans really going to stand up and fight for new tax cuts for the rich?” Murray will say, according to excerpts of prepared remarks released by her office.
“They know this would be an untenable political position, and I hope this pushes them to come to the table with real revenue now before being forced to the table if we don’t get a deal before the new year,” the senator will say.
Murray’s comments are the latest sign that Democrats are willing to go over the so-called fiscal cliff of automatic tax increases and spending cuts at the end of the year if Republicans continue to oppose higher taxes for top earners.
$1.2 Trillion
The $1.2 trillion automatic spending cuts, known as sequestration, are scheduled to begin in January if lawmakers don’t agree on a plan to replace them.
The nonpartisan Congressional Budget Office said May 22 that allowing the scheduled spending cuts and tax increases to take effect may tip the economy back into a recession.
The CBO estimated that the spending cuts and tax increases would total $607 billion, or 4 percent of the U.S. gross domestic product, in the fiscal year starting Oct. 1. The shortfall this fiscal year is projected to be $1.2 trillion.
Today, Murray will say that she “absolutely” would prefer to “continue this debate into 2013 rather than lock in a long- term deal this year” that doesn’t include revenue increases Republicans have rejected so far.
“Anyone who tells you sequestration is going to simply disappear because both sides want to avoid it is either fooling themselves, or trying to fool you,” she will say. “It is going to have to be replaced, and that replacement is going to have to be balanced.”
Deficit Supercommittee
Murray was the Democratic co-chairwoman of the supercommittee in Congress last year created to craft a plan to reduce the deficit by $1.2 trillion over a decade.
The 12-member panel of Republicans and Democrats, established by the August 2011 law raising the federal debt ceiling, was unable to reach an agreement, setting the stage for the $1.2 trillion in across-the-board cuts.
Supercommittee Democrats “jumped right out into the middle of the ring” during the negotiations and embraced Republican- proposed spending cuts, Murray will say.
“But Republicans refused to move an inch in our direction on revenue,” she will say. “They actually tried to use a deficit-reduction committee to cut taxes for the rich even further.”
Defense Programs
The House in May passed legislation to replace automatic cuts to defense programs, which amount to half of the $1.2 trillion, with cuts to domestic programs, including food stamps. Republicans on the Senate Armed Services Committee proposed a plan to delay the automatic cuts for one year by reducing the number of federal employees.
“We are also not going to allow just the defense cuts to be replaced without addressing the domestic spending cuts that would be devastating to the middle class,” Murray will say.
President Barack Obama’s push for a tax-cut extension for all except the highest-income families is a central theme in his presidential campaign.
The Democratic-controlled Senate plans to vote as soon as next week on legislation, based on Obama’s proposal, that would extend the tax cuts through 2013 for 98 percent of U.S. households while letting them expire for income exceeding $200,000 for individuals and $250,000 for married couples.
Congressional Republicans want to extend the cuts for all income levels for one year and set up a framework for a broader tax-code overhaul in 2013. The Republican-controlled House plans to vote later this month on that plan.
‘No Reason’
Murray will say, “There is absolutely no reason, not one, that we need to extend the tax cuts for the rich as a precondition for reforming the tax code.”
Continuing a Democratic line of attack, Murray will blame Republican opposition to any revenue increases on the influence of the Tea Party base and anti-tax advocate Grover Norquist’s pledge not to raise taxes.
All except six House Republicans and seven Senate Republicans have signed the pledge promoted by Norquist, the president of Americans for Tax Reform.
In an opinion article published in today’s New York Times, Senator Tom Coburn, an Oklahoma Republican, said Norquist was Democrats’ “favorite boogeyman” and that Republican lawmakers “repeatedly rejected Mr. Norquist’s strict interpretation of his own pledge.”
“While most Republicans do, of course, oppose tax increases, they are hardly the mindless robots Democrats say they are,” Coburn wrote. All but six Senate Republicans last year supported eliminating an ethanol production tax credit, he said.
--Editors: Laurie Asseo, Jodi Schneider
To contact the reporter on this story: Kathleen Hunter in Washington at [email protected]
To contact the editor responsible for this story: Jodi Schneider at [email protected]