Officials both in government and on K Street are already preparing for the legislative flurry that will follow November’s election — a period that will feature some bruised feelings as well, given that voters will have kicked at least some policymakers out of office.
During the lame duck, Congress will also have to consider the expiring payroll tax cut, other expiring tax provisions and perhaps even a hike in the debt ceiling.
Some lawmakers are also hoping that Washington can come together in the post-election environment on a grand deficit bargain that would both revamp the tax code and entitlement programs.
Republicans have so far steadfastly opposed any such agreement that would immediately raise fresh tax revenue. The anti-tax activist Grover Norquist has also railed against that possibility, saying other broad deals agreed to by Republicans in the last three decades resulted in higher taxes but no spending restraint.
But Donohue told C-span that any forthcoming agreement would probably have to include new taxes.
“Now, they come in a lot of ways,” Donohue said. “You can adjust taxes by eliminating some deductions or credits.”
The most recent House Republican budget, largely crafted by Rep. Paul Ryan (R-Wis.), significantly overhauled Medicare and Medicaid. It also lowered the top tax rate, currently 35 percent, to 25 percent, and said that scrapping tax preferences would pay for that reduction.
But Democrats have said that any broad deal would have to include revenues, and President Obama – who signed off on extending all of the Bush tax cuts in the 2010 lame duck session – has also said that he would not agree to extend those rates for the wealthiest again.
On the tax front, Donohue also said Friday that he believed that those above the poverty line pay at least a nominal amount in income tax.
The Tax Policy Center has projected that 46 percent of households paid no income tax in 2011, though it also noted that many of those paid sales taxes, payroll taxes or other levies.
“I want them to be at risk that somebody can raise it,” Donohue said. “But if half of the people in the country have no risk of anybody raising their income tax, what do they care about what the Congress does?”