By Russell Berman - 11/04/11 01:35 AM EDT
House Speaker John Boehner (R-Ohio) made clear on Thursday that when it comes to a deficit reduction deal, his position hasn’t changed: Tax increases are out, but new revenues could be in.
The question of taxes and revenue has bedeviled congressional and administration negotiators for months, and they were at the center of the dispute between Boehner and President Obama when their talks for a possible “grand bargain” on the budget fell apart over the summer.
“I think there’s room for revenues, but there clearly is a limit to the revenues that may be available,” Boehner told reporters Thursday during a roundtable discussion.
He added, however, that he was only open to new revenues if Democrats agreed to significant changes to mandatory spending programs like Medicare, Medicaid and Social Security. “Without real reform on the entitlement side, I don’t know how you put any revenue on the table,” he said.
Republicans have signaled a willingness to include new revenues, but distinguishing between what is merely additional federal revenue and what is a tax increase on individuals or businesses has been a difficult task. Boehner’s proposal to Obama over the summer would have generated up to $800 billion in added revenue over 10 years, as a result of predicted economic growth generated by an overhaul of the tax code.
When the White House demanded $400 billion more in revenues, Boehner said no, arguing that generating that much new revenue would have required a tax increase.
Boehner has become increasingly involved in the supercommittee’s deliberations and has met for three consecutive days with Republican members of the panel. The GOP members last week made a $2.2 trillion offer that included, by their calculations, $640 billion in new revenue from fees, insurance changes, increased economic growth and a change in the way inflation is calculated for government programs.
Democrats rejected their offer, while Republicans turned down a Democratic proposal that included $1.3 trillion in revenues, which the GOP dismissed as unacceptable tax increases.
“It’s the same conversation that’s been going on all year,” Boehner said Thursday. “They want more revenue than we’re willing to give, and they’re not willing to do as much entitlement reform as we’d like to do.”
He would not delve into specifics of what he would and would not accept, but he noted in exasperation: “I’ve seen more models than I can count about how you could do this. There are a lot of possibilities.”
The supercommittee has until Nov. 23 to reach a deal and send it to the full Congress, and its members have been pulled in every direction in recent days. On Wednesday, a group of 100 House members – 60 Democrats and 40 Republicans – sent a letter to the panel urging it to find at least $4 trillion in savings and to include entitlement reforms, discretionary spending cuts and new revenues. The next day, 33 Republican senators sent a missive warning the panel not to raise taxes.
The panel members themselves have shown little outward signs of progress. With the exception of a public hearing on Tuesday, the committee has not met in full in a week, and members have been shuttling through the Capitol to smaller off-shoot meetings.
Sen. John Kerry (D-Mass.) was spotted leaving the House floor Thursday evening and heading into the nearby office of a GOP member, Rep. Dave Camp (R-Mich.).
While the nation is not at risk of default as it was in August, Boehner said the current effort to strike a debt deal “is certainly as important if not more important” than it was over the summer.
“You don’t have a date driving this, but its pretty clear, having watched what’s going on in Europe, that if we don’t do what’s needed to get our debt down, you’re going to see a reaction in the markets, you could have another downgrade of our debt,” Boehner said.
At the same time, he brushed off the suggestion that if the committee could not break its stalemate, the party leaders would have to step in and take over the talks once again.
“It’s one thing to have discussions with the members, but I think it’s important for the committee to succeed,” the Speaker said, “and so I think you see leaders on both sides of the aisle, both sides of the Capitol, work with their members trying to get there.”
A failure by the supercommittee to reach a deal would trigger across-the-board spending cuts to the military and domestic programs.
The cuts would hit in 2013, and some lawmakers have suggested they would try to stop them from occurring, particularly those to the Pentagon. Boehner said on Thursday he would feel morally “bound” to accept the defense cuts if the supercommittee failed.
“Me personally, yes. I would feel bound by it,” he said. “It was part of the agreement. The sequester is ugly. Why? Because we don’t want anybody to go there. That’s why we have to succeed.”
Erik Wasson contributed.