Showing signs that the Budget Conference Committee isn’t making progress, Sen. Sheldon Whitehouse (D-R.I.) said Republicans are still refusing to allow any deficit reduction through closing tax loopholes for the wealthy and corporations.
Whitehouse is serving as a conferee on the budget conference, which is being led by Senate Budget Committee Chairwoman Patty Murray (D-Wash.) and her House counterpart, Rep. Paul Ryan (R-Wis.).
Whitehouse said Democrats are asking to use 7 percent of tax breaks for the wealthy and corporations for deficit reduction, but that Republicans have said any tax increases are a non-starter in negotiations.
“We just want to take 7 percent — a tiny slice — of this tax loophole and bring it back for deficit reduction,” Whitehouse said on the Senate floor Thursday. “But Republicans don’t want us to look there because that’s where the juiciest earmarks are.”
Whitehouse said that the federal government collects $1.13 trillion revenue from individual taxes but pays out $1.02 trillion in deductions and loopholes. He said that pool of money is just too large to ignore, considering the wealthy get to take the most advantage of those tax breaks. Both Ryan and Speaker John Boehner (R-Ohio) have said they don't want tax reform to be part of budget negotiations.
“That’s off-limits?,” Whitehouse said. “I don’t see why. ... That’s some pretty serious money.”
Whitehouse compared that pool of potential tax revenue to the cave of Ali Baba, saying it is full of treasures that Republicans want to keep for their corporate and wealthy friends.
“They know once we start taking a real look at Ali Baba’s cave they know some of that stuff will be impossible to defend to the American people,” Whitehouse said. “These are things we should get rid of even if we didn’t need it for deficit reduction.”
Whitehouse said it’s hypocritical of Republicans to say the national debt is their No. 1 priority, yet then defend corporate tax breaks as being equally important.
“You can’t have it both ways. You can’t be telling the American people that the debt and the deficit is the number one threat ... but is also less important than every special interest tax break,” Whitehouse said.
Republicans argue that tax increases will harm the economy because wealthy people will have less money to invest in the private market. If budget conferees don’t reach a deal, it could result in another government shutdown or risk default.