Budget talks open with tax fight

Budget talks open with tax fight
By Erik Wasson - 10-30-13 10:29 AM EDT

The leaders of the new House-Senate budget conference immediately clashed over taxes during their first meeting on Wednesday. 

House Budget Committee Chairman Paul Ryan (R-Wis.) and Senate Budget Committee Chairwoman Patty Murray (D-Wash.) are sharply divided over whether the negotiators should consider a tax increase in a budget deal.

Murray said that Republicans must agree to close “tax loopholes” as part of any deal to replace the automatic sequester cuts. 

“I am going into this budget conference ready to agree to some tough spending cuts that, unlike the sequester caps that disappear in 2022, would be permanently locked into law,” she said. 

“But compromise runs both ways. While we scour programs to find responsible savings, Republicans are also going to have to work with us to scour the bloated tax code — and close some wasteful tax loopholes and special interest subsidies. Because it is unfair — and unacceptable — to ask seniors and families to bear this burden alone.”

Ryan, however, said that, “if this conference becomes an argument about taxes, we’re not going to get anywhere.”

“The way to raise revenue is to grow the economy. We need to write a tax code that encourages economic growth — not stifles it,” he said. 

The early sparring doesn’t bode well for the committee and could indicate lawmakers will struggle to reach even a basic agreement. The divide over tax revenue has helped doom previous rounds of fiscal talks.

The budget conferees, led by Murray and Ryan, are supposed to come up with a deal by Dec. 13.  

A conference agreement could smooth the way for the next debt-ceiling increase, which would be needed sometime after Feb. 7. If no top-line appropriations number can be found by Jan. 15, a stopgap measure would be needed to prevent another government shutdown and a new $20 billion sequester cut would hit the Defense Department. 

The conference is getting off to a slow start. Ryan announced that the committee would hold its second meeting on Nov. 13, after the House returns from a recess. 

Ryan said that the group should encourage talks between the House Ways and Means and Senate Finance committees to end special tax breaks but signaled the budget agreement should not use revenue from such future talks.

“Today, our tax code is full of carve-outs and kickbacks. We need to get rid of them — and those bipartisan talks are just the way to do it. So let’s do all we can to encourage that effort,” Ryan said. 

Ryan said that the group should focus on smarter spending cuts.
 
“So let’s focus on achievable goals,” he said.

House Budget Committee ranking member Chris Van Hollen (D-Md.) noted that “there are dramatic differences” between the House and Senate approaches and urged his colleagues to keep all options on the table, including taxes.

“We should not start the negotiation by taking things off the table,” he said.

Van Hollen suggested that passing an immigration bill would decrease the long-term deficit and that encouraging passage of the bill could be part of the budget conference’s objectives.

Senate Budget Committee ranking member Jeff Sessions (R-Ala.) urged the conference to keep the sequester-level spending now in law and said the group should not ignore ObamaCare, the issue that led to a 16-day government shutdown this month.

“Tax, spend, regulate, and debt will never work. It’s a plan guaranteed to fail,” he said.