Obama tax hikes help GOP budget plans

If House Republicans succeed in passing a budget that balances within 10 years, they might have President Obama to thank.
 
The tax increases that Obama demanded at the end of 2012 are now built into the budget baseline, meaning that Republicans will have to find fewer spending cuts than they otherwise would have.
 

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Rep. Paul Ryan (R-Wis.), the chairman of the House Budget Committee, has confirmed that the next GOP budget effort will incorporate the roughly $630 billion in fresh revenue, and some top Republicans said they would merely be following the official scorekeeping of the Congressional Budget Office.
 
“You go with what the CBO tells you to go with,” Rep. Greg Walden (Ore.), the chairman of the National Republican Congressional Committee, told The Hill. “The revenues are the revenues. I don’t think there’s an irony there. It’s just the way the law works.”
 
Still, the GOP's grasping of the fiscal-cliff revenues underscores the challenge the party faces in crafting a budget that balances in 10 years — a framework that Rep. Kevin Brady (R-Texas) acknowledges will have to have “tough love” on the spending side.
 
A solid majority of House Republicans in the last Congress, including some leaders, voted against the deal to extend George W. Bush-era rates for all but the highest earners. Now even some of those opponents, including public critics of Speaker John Boehner (R-Ohio), are stressing that Republicans will need to rely on those revenues.
 
“I think it’s important to point out that one of the reasons that leadership may be able to shorten the years to balance is the recent tax increases,” Rep. Justin Amash (R-Mich.) told reporters this week.
 
Republican leaders are likely to downplay the help they are getting from the new tax revenues, because they don’t want to be seen as validating a core Democratic argument: that the best way to reduce the deficit is through a combination of spending cuts and tax increases.
 
Democrats have already said that further fiscal negotiations should include additional revenues.

But GOP lawmakers have said the revenue conversation is over, and House Republicans declare the next blueprint gives them the chance to prove that's possible. The fiscal-cliff revenues, Republicans say, will also play just a small role in their overall package.
 
“When Americans realize we’ve got to make some tough decisions just to balance in a decade, it’s actually going to add momentum to what we need to do,” Brady, the chairman of the Joint Economic Committee, told The Hill. “People need to know how deep the hole the country’s in.
 
“They had the bases loaded for nine innings,” Brady added, talking about the Democrats’ proposals on revenues. “They scored one run. Now, they want extra innings, extra at-bats. They’re not getting them.”
 
Some House Republicans who voted against the cliff deal also said that, even with the help they’ll get on their budget, they still would have preferred to keep all of the Bush-era rates.
 
The issue, these Republicans say, is that they do not believe CBO properly accounts for economic growth spurred by lower taxes – the “dynamic growth” embraced by many in the GOP, but that Democrats are largely skeptical of.
 
Rep. Tim Griffin (R-Ark.), paraphrasing former Defense Secretary Donald Rumsfeld, said Republicans “have to go to battle with the CBO that we have, not the one we wish to have.”
 
For their part, House Democrats are already signaling that they plan to use the latest Ryan budget against Republicans as they push to win back the majority in 2014.
 
With the Senate having last passed a budget in 2009, Democrats on both sides of the Capitol believe their party’s proposals to further increase taxes on the wealthy are resonating with voters.
 
Mitt Romney, the GOP nominee for president last year, promised to balance the budget in eight years without raising revenue — and despite restoring cuts that President Obama made to Medicare providers and national security.
 
At the time, independent analysts like the Committee for a Responsible Federal Budget questioned the math behind those assertions.
 
Ryan, in his previous two budgets, also repealed the Democratic healthcare overhaul, while slipping in the $716 billion of Medicare cuts included in the law — cuts that Republicans expect him to keep this time around as well.
 
Because CBO found that the healthcare overhaul reduced deficits, Ryan’s previous budgets had to absorb deficit increases from repealing it.
 
“Sure, there’s an irony, and inconsistency,” Rep. Sandy Levin (Mich.), the top Democrat on the tax-writing House Ways and Means Committee, said about the GOP latching on to the fiscal-cliff revenue.
 
Levin was also skeptical that Republicans would be able to bring a budget to balance in a decade without more revenues. “Let’s see,” Levin said. “They can say that. But the truth is in the reality of a budget.”
 
But Republicans say that they can get the rest of the way to balance — possibly $10 trillion over a decade — without going back to the revenue well.
 
“What we should be doing with our budget is showing people what we would do if we were in charge. Show folks the difference between Republicans and Democrats,” said Rep. Mick Mulvaney (R-S.C.). “This can be done.”

 
Erik Wasson contributed.