Sen. Bob Corker (R-Tenn.) on Sunday joined a growing chorus of Republicans who are open to higher tax rates for the richest Americans as part of a deal to avoid the “fiscal cliff.”
Corker, a member of the Senate Banking Committee, told “Fox News Sunday” that Democrats have the upper hand following the 2012 elections. He said he was optimistic Congress would strike a deal within the next 23 days, even if it means agreeing to President Obama's plan to increase the top rate on individuals making more than $250,000 a year.
“A lot of people are putting forth a theory — and I actually think it has merit — where you go and you give the president the 2 percent increase that he's talking about, the rate increase on the top 2 percent, and all of a sudden the shift goes back to entitlements,” Corker said. “And all of a sudden, once you give him a top rate on the 2 percent it's actually a much lesser tax increase than what he's been talking about.
“I actually am beginning to believe that is the best route for us to take,” Corker said, “to again shift the focus to where it needs to be, which is entitlements.”
The Republican-led House, however, is reluctant to agree to Obama’s demand for higher tax rates on the wealthy. This past week, Speaker John Boehner (R-Ohio) proposed raising $800 billion — half what the president wants — by limiting tax breaks, an offer the White House immediately dismissed.
Corker predicted that Republicans would gain the upper hand in future negotiations if they can prevent the tax hikes and spending cuts that are set to kick in on Jan. 1. After that, he said, congressional Republicans will gain new leverage to require further entitlement cuts when the president asks for the authority to once again raise the debt ceiling.
“Hopefully, we'll do the same thing we did last time, which is if the president wants to raise the debt ceiling by $2 trillion, we get $2 trillion in spending reductions. And hopefully this time, it's mostly oriented toward entitlements.”
The president's initial fiscal-cliff offer proposed giving him the authority to raise the debt-limit, but Republicans hope to use the ceiling to push for additional spending cuts.
Sen. Charles Schumer (D-N.Y.), a member of the Senate Finance Committee, said Republicans are making a mistake if they think they have much leverage on the debt ceiling.
Schumer said he expected the debt ceiling to be part of the fiscal-cliff agreement. He said Republicans won't be able to threaten default on debt that the government has already accumulated.
“If they want to say 'we won't raise the debt ceiling unless you cut Medicare', make our day,” Schumer said. “That position is untenable politically and it won't last; you won't be able to hold it.”