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Boehner says closing loopholes should be reserved for tax reform

House Speaker John BoehnerJohn Andrew BoehnerBudowsky: Liz Cheney vs. conservatives in name only House Republicans request hearing with Capitol Police Board for first time since 1945 Press: John Boehner: good author, bad leader MORE (R-Ohio) on Thursday said closing tax loopholes “needs to come as part of overall tax reform,” potentially dealing a blow to Senate efforts to use such revenue to offset the elimination of scheduled defense cuts.

Sens. Lindsey GrahamLindsey Olin GrahamThe unflappable Liz Cheney: Why Trump Republicans have struggled to crush her  The Memo: The GOP's war is already over — Trump won Michael Flynn flubs words to Pledge of Allegiance at pro-Trump rally MORE (R-S.C.) and John McCainJohn Sidney McCainConservative Club for Growth PAC comes out against Stefanik to replace Cheney What's really going on down in Georgia Budowsky: Liz Cheney vs. conservatives in name only MORE (R-Ariz.) are discussing a deal that would raise $40 billion to $50 billion in new revenue by closing some tax loopholes and increasing fees. The money would help cancel out much of the $55 billion in Pentagon cuts that are scheduled for 2103.

But House Republicans are intent on using many of those revenue sources to offset the cost of lowering the corporate and individual income rates in a broad tax overhaul. 

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Asked on Thursday whether revenue from closing tax loopholes should go to offsetting defense cuts or be reserved from tax reform, BoehnerJohn Andrew BoehnerBudowsky: Liz Cheney vs. conservatives in name only House Republicans request hearing with Capitol Police Board for first time since 1945 Press: John Boehner: good author, bad leader MORE chose the latter. 

“Raising taxes in a weak economy is not a good idea,” he said. “If we’re serious about bringing down rates, both corporate rates and personal rates, closing those loopholes, those special deals and other credits that are in the tax code, needs to come as part of overall tax reform.” 

Both Republicans and Democrats have said they want to find a way to scrap or postpone the Pentagon cuts, but Democrats are demanding that tax revenue be included in any deal. Under Grover Norquist’s Taxpayer Protection Pledge, which nearly all congressional Republicans have signed, increases in tax revenue must be offset with tax cuts and cannot simply go toward deficit reduction.

The looming spending cuts are likely to be lumped into either a short-term or long-term agreement dealing with the expiration of the George W. Bush-era tax rates after the November election.