By Meghashyam Mali - 01/06/13 03:44 PM EST
Sen. Dick Durbin (D-Ill.) on Sunday pressed fellow lawmakers to look at tax reform, targeting loopholes and deductions in the code for closure in the next round of budget negotiations.
“I can tell you that there are still deductions, credits, special treatments under the tax code which ought to be looked at very carefully,” said Durbin on CNN’s “State of the Union.”
Last week, Congress and the White House agreed to extend the expiring Bush-era tax rates for most taxpayers and delay sequester cuts for two months. Republicans on Sunday said attention should now turn to spending cuts and entitlement reforms.
Senate Minority Leader Mitch McConnell (R-Ky.) said the “tax issue is finished, over, completed.” McConnell said the new focus should be on the nation’s “spending addiction.”
But Durbin said there were still new revenue measures that Congress could examine.
“We forego about $1.2 trillion a year in the tax code, money that otherwise would go to the government, and when you look closely, some of those things are near and dear to us individually and to the economy -- the mortgage interest deduction, charitable deductions, deductions for state and local taxes,” said Durbin. “Loopholes where people can park their money in some island offshore and not pay taxes, these are things that need to be closed. We can do that and use the money to reduce the deficit.
“I think we need to open our minds to our tax revenue. You know, we've had conversations about an infrastructure fund that will really start America building again, for the highways and airports and locks and dams and things like that,” added Durbin.
Durbin, though, warned that while he hoped for further agreement on tax reform and was open to spending cuts, Republicans should not hold up raising the nation’s debt-ceiling.
“The debt ceiling is something that we should put behind us in a hurry,” said the Illinois senator. “The president should not have one of these last-minute showdowns over the debt ceiling, but we should speak in honest and I think complete terms about dealing with this deficit. It truly is a challenge we haven't faced as much as we should.”
Republicans see the debt-ceiling as an opportunity to force Democrats to accept spending cuts. Democrats, though, are pushing for a clean debt-limit hike and are warning that a protracted fight could scare markets and weaken the nation’s economic recovery.
Obama in his weekly address warned Republicans that holding approval for hiking the debt-ceiling was a “dangerous game.” The president called for addressing spending and entitlements in a separate debate apart from the ceiling.
“One thing I will not compromise over is whether or not Congress should pay the tab for a bill they’ve already racked up,” said Obama. "If Congress refuses to give the United States the ability to pay its bills on time, the consequences for the entire global economy could be catastrophic.”
Speaker John Boehner (R-Ohio) on Friday, however, told House Republicans that he believes that public is behind the GOP in the coming debt-ceiling fight. At a closed door conference Boehner vowed to insist on spending cuts in any deal to raise the nation’s borrowing limit.
Durbin expressed confidence that lawmakers would be able to reach an agreement to cut the deficit further.
“I'd rather see is a bipartisan approach starting soon, as soon as we return, between Democrats, Republicans in the House and the Senate, talking about where we go, for example in, tax reform. There's money to be saved in tax reform. There's money to be saved in other areas,” said Durbin.