More taxes: ‘Behind us’ or ‘on the table’?

Democrats, GOP deeply divided

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Democrats are bubbling over with ideas for raking in additional federal revenue even as Senate Minority Leader Mitch McConnell declared Sunday that “the tax issue is behind us.”

But clearly it’s not over for House Minority Leader Nancy Pelosi, California Democrat, who on Sunday described the revenue increase negotiated in last week’s deal on the “fiscal cliff” as “significant” but “not enough.”

“We’re taking a look at the tax code, putting everything on the table,” Mrs. Pelosi said on CBS’ “Face the Nation.” “From a standpoint of closing loopholes, we know that we can do that — special subsidies for big oil, for example, $38 billion right there. But again, not to take things in isolation, but to say, ‘How much more revenue can we get as we go forward?’”

Meanwhile, Republicans insist that the time has come to focus on spending cuts in the aftermath of the fiscal cliff agreement and as Congress faces looming deadlines on three more knotty fiscal issues in the debt ceiling, the sequestration and the budget resolution.

“The tax issue is finished. Over. Completed,” Mr. McConnell said on ABC’s “This Week.” “That’s behind us. Now the question is, what are we going to do about the biggest problem confronting our country, and that’s our spending addiction.”

The statements by the congressional leaders point to the likelihood of yet another showdown on budget-related issues, just one week after Congress narrowly avoided going off the fiscal cliff by striking an eleventh-hour deal.

Republicans, who agreed to put off discussion of most spending cuts in order to get the deal done by the end of the year, said they had no interest in revisiting revenues until Democrats agree to major spending cuts to reduce the deficit.

“It certainly underscores the voracious appetite for more taxes on the other side,” Mr. McConnell said on CBS’ “Face the Nation,” part of his Sunday hat trick in appearing on three morning news shows.

Without significant spending cuts and entitlement reform, Republicans and Democrats have agreed that no long-term budget solution is possible. Even so, President Obama has yet to prioritize spending reform, said Mr. McConnell, Kentucky Republican.

“I wish the president would lead us in this discussion rather than putting himself in the position of having to be dragged kicking and screaming to discuss the single biggest issue confronting our future,” he said.

Rep. Jim Jordan, Ohio Republican, said he was stunned at the idea of making revenue a higher priority than spending.

Mitch McConnell is exactly right,” he said on “Fox News Sunday.” “They just got revenue. We’ve got to cut spending. We’ve got a $16 trillion debt. The credit card is maxed out.”

Mrs. Pelosi said she wanted to consider a variety of options and emphasized that nothing was off-limits except a tax increase on the middle-class.

“Let’s put on the table what it is that we can to increase revenue,” said Mrs. Pelosi. “We’ve changed the rate — the high-end rate is 39.6 [percent], a very important step — and yet there’s much more we can do.”

When asked about another tax increase on the highest earners, she answered, “I’m saying that’s not off the table,” though she included the caveat “not in terms of tax rates, but in terms of other considerations.”

Nor was Mrs. Pelosi the only top Democrat to push tax-raising ideas on Sunday’s political talk shows.

Sen. Richard J. Durbin, Illinois Democrat, proposed on CNN’s “State of the Union” an energy tax to fund infrastructure spending.

“We’ve talked about the gas tax. Now’s not the moment to raise it, but it really is something we should consider in the future,” Mr. Durbin said. “But there are other sources of energy taxes we ought to consider.”

Mr. Durbin went on to say, “Let me give you an example: The electric power grid in America is ancient, and if we are going to expand it so that it can meet the needs of the 21st century, we need an investment.”

“That means revenue coming in from that sector. I think they’d be open to it if the investment went back into the infrastructure,” he said.

Democrats argue that they came up short in the fiscal cliff deal because they settled for $1.2 trillion in additional revenue instead of the $1.6 trillion sought by Mr. Obama.

“The president had originally said he wanted $1.6 trillion in revenue,” Mrs. Pelosi said. “He took it down to $1.2 [trillion] as a compromise in this legislation. We get $620 billion but that is not enough on the revenue side.”

Mrs. Pelosi called herself “fairly agnostic” about how to raise revenue, although she and Mr. Durbin suggested that they would support closing loopholes and eliminating deductions.

“There are still deductions, credits, special treatments under the tax code which ought to be looked at carefully,” Mr. Durbin said.

At the same time, Mrs. Pelosi ruled out Republican proposals to reduce entitlement spending, such as raising the Medicare eligibility age and reducing the cost-of-living adjustment for Social Security. She did say that she would consider a means-testing system for Medicare.

For all the talk of revenue, however, Mr. McConnell appeared confident that another effort to raise taxes would fall short in the Senate.

“I think a bipartisan majority in the Senate will have the view that the tax issue is behind us,” he said.

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