Rep. Simpson: Revenues, not tax hikes, 'key' to supercommittee deficit deal

Rep. Mike Simpson said Sunday that new revenues are central to Congress's efforts to reduce the deficit, but the Idaho Republican drew a line in the sand in his opposition to tax hikes.

"The reality is you can't get to $4 trillion without including additional revenues," Simpson told Fox News Sunday. "We might have different ideas what those revenues would look like. I think you could get additional revenues by actually lowering the tax rates and eliminating all of the exemptions underneath. … More revenue is key to this."

But Simpson was quick to make a distinction between new revenue and tax hikes.

"Nobody is in favor of raising tax rates, but we are in favor of increasing revenues," Simpson said.

From across the aisle, Rep. Heath Shuler (D-N.C.) on Sunday was more willing to go after his party's sacred cows, saying benefit cuts to entitlement programs like Medicare and Social Security are vital if the country hopes to rein in deficit spending.

"We cannot do this without entitlements," Shuler told Fox.

The remarks arrive as optimism over the budget supercommittee's prospects of sealing a deal on at least $1.2 trillion in deficit reduction is waning on both sides of the aisle.

Simpson and Shuler spearheaded a letter last week calling on the supercommittee to keep everything on the table, including "revenue." 

"To succeed all options for mandatory and discretionary spending and revenue must be on the table," reads the letter, which has been endorsed by 103 House members.

But Simpson's comments Sunday highlight the divide that remains between the two parties over the issue of tax reform.

Leaders in both parties have said they favor a balanced approach to deficit reduction, but only the Democrats on the panel have so far shown a willingness to offer up sacred cows in the form of entitlement benefit cuts that are anathema to many in their party. Supercommittee Republicans, on the other hand, have rejected any tax hikes as a nonstarter.

Both Simpson and Shuler said Sunday that the supercommittee should focus on a grand bargain to the tune of at least $4 trillion in deficit reduction over a decade. The $1.2 trillion mandate simply isn't enough, they said, to get the country's fiscal house in order.

"That's kicking the can down the road, and frankly we're out of road," Simpson said. "We've got one chance to fix this, and this is that chance."

The supercommittee has until Nov. 23 to come up with its deficit-reduction plan before automatic cuts take effect.