Obama will try to break deadlock over taxes

Senators stand firm a day before meetings

One day ahead of a meeting with President Obama, the Senate’s top Republican insisted again Sunday that tax increases would not be a part of any deal with Democrats and the White House to raise the nation’s $14.3 trillion debt ceiling.

“We have a spending problem. We don’t have a problem because we tax too little,” Senate Minority Leader Mitch McConnell said on ABC’s “This Week.”

Mr. Obama is scheduled to meet separately at the White House with the Kentucky Republican and with Majority Leader Harry Reid, Nevada Democrat, to try to jump-start the debt talks that broke down on Capitol Hill last week.

Republican leaders have called on the president to take a more active role in the negotiations, which until last week were led by Vice President Joseph R. Biden.

“I think what would reassure the world more than anything we could do would be to come together and use this opportunity presented by the president’s request of us to raise the debt ceiling to do something about the debt,” Mr. McConnell said.

“I view it as a great opportunity to bring the two sides together and do something really significant for the country.”

The White House talks are intended to pick up where the so-called Biden commission - which included a six-member bipartisan congressional delegation - left off.

“We believe the talks that have been led by the vice president have made significant progress,” White House press secretary Jay Carney told reporters Friday. “We believe that we can move forward as long as no one in the talks takes a ‘my way or the highway’ approach.”

But Republican leaders say any deal that included tax increases would have zero chance of passing both houses of Congress.

“Throwing more tax revenue into the mix is simply not going to produce a desirable result, but it won’t pass,” Mr. McConnell said. “Putting aside the fact that Republicans don’t like to raise taxes, Democrats don’t like to either.”

Senate Minority Whip Jon Kyl, Arizona Republican, provided some wiggle room in the debate Sunday. Although any tax increase is a non-starter for his party, he said, Republicans could be willing to accept some forms of “tax revenue.”

“We have not refused any new revenue,” Mr. Kyl said on “Fox News Sunday. “For example, we’ve been discussing some fee increases and some other things that would actually generate revenue.”

Mr. Kyl said he would consider limiting some so-called “tax expenditures,” as long as the tax code isn’t changed.

“We’re perfectly willing to consider those kinds of issues in the context of tax reform, which we would very much like to do,” he said.

The Biden panel met regularly since May in an attempt to cut a spending deal ahead of an Aug. 2 Treasury Department deadline to raise the federal borrowing limit and avoid what could be a catastrophic default on the government’s debts.

Republican leaders, pressed by a large contingent of new tea party-backed members, have demanded that any deal include spending cuts to equal the amount the $14.3 trillion debt ceiling is raised - at least $2 trillion.

Negotiations collapsed Thursday when House Majority Leader Eric Cantor, Virginia Republican, walked out after complaining that Democrats refused to budge on their demand for tax increases. Mr. Kyl, the only other Republican member of the Biden panel, quickly followed suit, essentially rendering the group dead.

Democrats and the White House have accused Republicans of falsely suggesting that they want to raise taxes on average Americans. Rather, Democrats say, they want to close certain tax “loopholes” for wealthy corporations.

“How do you call closing loopholes to oil companies that are making billions of dollars in profits … how do you call that a tax hike?” Rep. James E. Clyburn, South Carolina Democrat, said Sunday on ABC’s “This Week.”“I don’t know of anybody who would define a tax increase as closing the loophole.”

Democrats added they have been willing to accept some GOP demands, such as reductions in Medicare spending, though no cuts in benefits.

“This was not about coming to an impasse,” Sen. Charles E. Schumer, New York Democrat, said Friday regarding the breakdown of the Biden panel. “There was just a lack of political will by Republicans to accept the kind of compromise that was taking shape.”

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