WASHINGTON — The battle over whether tax increases can be used to cut the nation’s debt flared Tuesday as the Senate’s Democratic budget writer floated a proposal for a millionaire’s surtax to help cut projected deficits over the next decade. But Republican leaders flatly said no to tax increases.
Senate Budget Committee Chairman Kent Conrad, D-N.D., raised the idea of an extra tax on the wealthiest taxpayers, Democratic officials said, and the Senate’s Democratic leader, Harry Reid, D-Nev., called for an end to tax subsidies for oil and gas companies. House Speaker John Boehner and Senate Republican leader Mitch McConnell both staked out seemingly unyielding positions against tax increases
The parties exchanged volleys over taxes even as bipartisan congressional negotiators working with Vice President Joe Biden struggled for common ground on spending cuts that would help erode long-term deficits.
Boehner is calling for trillions of dollars in spending cuts, and the Democrats, too, acknowledge that spiraling annual deficits require spending restraint. But the differences over possible tax increases, even if they would spare regular wage-earners, underscore the chasm between the two parties.
The conflicting approaches to debt reduction set the stage for a grand national debate that will likely play out for the next year and half over overhauling taxes and restructuring major government benefit programs such as Medicare, Medicaid and Social Security.
The bipartisan budget negotiators who met with Biden for the second time in a week Tuesday are seeking more immediate solutions to long-term deficits. Those talks are under way while the administration seeks an increase in the government’s borrowing authority. Republicans see that debt ceiling vote as critical leverage for spending cuts.
Biden, emerging from a two-hour meeting with congressional negotiators across from the White House, voiced optimism about the talks, but indicated that top House and Senate leaders might ultimately have to become involved to seal any bargain.
“Whether we get to the finish line with this group is another question,” he said. Another round of talks is scheduled for Thursday.
One of the Republicans’ top negotiators with Biden, House Majority Leader Eric Cantor of Virginia, signaled flexibility Tuesday. Cantor said the talks were designed to find where the White House, Democrats and Republican were “in terms of commonality right now” and indicated that an agreement on spending cuts in broad terms could be enough to win support for increasing the debt ceiling.
