Schumer shoots down 'revenue neutral' deal that closes loopholes

Sen. Charles Schumer (D-N.Y.) rejected the idea of a deal to increase the debt ceiling that includes closing tax loopholes while remaining revenue neutral.

"Our focus on tax loopholes seems to be putting Republicans on their heels on the issue of revenues. But if Republicans are going [to] say we can only close these loopholes in a revenue-neutral way, it is like taking one step forward and then two steps back," Schumer (D-N.Y.) said Wednesday. "The point isn’t to get rid of these loopholes simply to pay for new tax breaks elsewhere, it’s to do it in a way that contributes to the reduction of the debt."

Schumer's comments come as Republicans begin to show openness to an budget deal centered around closing tax loopholes as a way to satiate Democrats' demand for added revenues while sticking to their promise not to raise taxes.

House Majority Leader Eric Cantor (R-Va.) suggested Wednesday that Republicans could agree to a deal centered around closing certain tax loopholes and ending subsidies for big oil and gas companies as long as the revenue from closing the loopholes and those ended subsidies are used to reduce other taxes.

“If the president wants to talk loopholes, we’ll talk loopholes,” Cantor said Wednesday. "I feel that loopholes, we’ve said all along that preferences in the code aren’t something that helps economic growth overall, but listen, we’re not for anything that increases taxes.

“Any discussion about loopholes must be accompanied by an offset in tax cuts; that’s all,” Cantor continued. “We’re not for increasing revenue.”

Raising taxes has become the main sticking point in negotiations over a needed debt ceiling increase. Democrats have called for added revenues to the deal, mostly in the form of taxes on some of the wealthiest Americans. But Republicans have vowed not to agree to any deal that raises taxes because, they charge, it would hurt the economy.