Durbin: We're looking at a tax deduction cap

By Peter Schroeder - 11/14/12 11:20 AM ET

Sen. Dick Durbin (D-Ill.) said Wednesday that capping tax deductions for the nation's top earners is one idea being discussed in efforts to address the "fiscal cliff" and strike a deficit deal.

The Senate majority whip did not know if the White House was on board with the idea, but confirmed that senators were discussing the notion.

"I have no idea whether it's on the White House agenda, but it has been part of our discussion," he said on MSNBC. "We understand that if you take a look at tax expenditures, $1.2 trillion a year, there's room there to save some money and reduce the deficit."

The idea of placing a limit on the total amount of tax deductions a person can claim was first floated on the campaign trail by Republican challenger Mitt Romney. Now, with the two parties in Congress looking for areas to compromise to avert the combination of automatic spending cuts and expiring tax cuts set to take effect in 2013, such a cap is a topic of conversation on Capitol Hill.

The New York Times reported Tuesday that Democrats were warming to the idea.

Senate Finance Committee Chairman Max Baucus (D-Mont.) told Bloomberg that such a cap deserves a closer look. Determining where to set the cap, and which tax brackets it should apply to, remain key questions surrounding the idea.

The cap talk comes as both parties begin to huddle and search for ways to avert the fiscal cliff, while working to strike a broader deficit-reduction deal. House Speaker John Boehner (R-Ohio) made an opening bid shortly after the election, saying he was willing to tolerate increased revenues as part of a package so long as it also made spending cuts and addressed entitlement programs.

However, President Obama and leading congressional Democrats have insisted that any deal must also include an increase on tax rates on the nation's wealthiest. Durbin argued that the outcome of the election gives Democrats the upper hand in that fight.

"The election was a pretty straight-up question as to whether or not we were going to raise taxes on the wealthiest people. The president won the election," he said.

"The question is whether Speaker Boehner is willing to work for a bipartisan answer to this deficit issue," he added. "If he wants to make it an exclusively House Republican product, it's not going to get done."