Republicans dismiss payroll tax break, differ on ethanol

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Alexander, who voted along with 33 Republican colleagues in a failed attempt to eliminate $6 billion in tax breaks for ethanol, said he'd vote to eliminate them again if it came up.

Hensarling concurred in critiquing the tax credits, saying he has "never been a fan" of them. But he split with Alexander on how they should be eliminated, making clear that any elimination of tax breaks must then be used to lower tax rates across the board.

"We're willing to do that, but not under the guise of simply fundamentally increasing tax rates," he said. "I would want to ensure that we would use that revenue to lower marginal rates."

The Tuesday vote to eliminate the credit was closely watched. Since the proposal pushed by Sen. Tom Coburn (R-Okla.) did not offset the cost of the increase, it seemed to violate the Americans for Tax Reform's (ATR) tax pledge as a net tax increase. That pledge, signed by the vast majority of Congressional Republicans, requires opposition to any net reduction of tax deductions or credits, unless it is precisely matched by further reduction in tax rates.

The ATR maintained that the vote did not violate the pledge, because that amendment, if approved, would have been paired with another amendment that would offset the increased tax burden.

However, Hensarling appeared to adhere closely to the ATR pledge in his comments, whereas Alexander indicated an openness to eliminating tax credits to pay down the deficit.

"I voted for lower food prices and less federal debt. I'd do that again if I could," he said. "The tax code's full of examples of unwarranted tax breaks. Yesterday's a good example of one."

However, the lawmakers were in lock-step on opposing a White House proposal to extend and broaden a payroll tax holiday, dismissing it as a short term move when the situation calls for a broad overhaul. The administration had floated the idea during closed-door talks with congressional leaders on a deal to raise the debt limit.

"We don't need short term gestures, we need long term strategies," said Alexander.

"We've tried short term. What employers need is confidence going forward," said Hensarling. "I don't sense how this move will instill the confidence that small business people...are going to need."

The two lawmakers convened Wednesday to commemorate the anniversary of the Obama administration's "Recovery Summer" -- a six-week period in 2010 when the White House worked to highlight jobs created by projects funded by the stimulus package.

Obviously, they were not convinced by the administration's efforts to boost the economy, citing the recent run of bad economic news, including the spiking of unemployment back up to 9.1 percent.

"The president's contribution to it can be summed up in four words: he's made it worse," said Alexander.

"It's quite clear that by any historic standard, America should have well been on the road to recovery," added Hensarling. "President Obama is presiding over the worst economy since the Great Depression."

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