House Speaker John A. Boehner on Thursday ruled out tax increases as an option for the deficit supercommittee, but in a broad speech laying out his goals for Congress, he urged the 12-member panel to lay the groundwork for a full rewrite of the U.S. tax code.
In a speech that effectively marked the GOP’s response to President Obama’s address to a joint session of Congress last week, Mr. Boehner categorically ruled out a government shutdown or debt default on his watch, called for a new highway-funding bill to be combined with one to expand U.S. energy exploration, and warned of a long-lasting spiral of economic and social decline.
He also rejected the outlines of the president’s job stimulus plan, saying that instead of carving out tax breaks, lawmakers on the deficit supercommittee should focus on a total rewrite of the tax code that frees up businesses. He also said it must be done without tax increases.
“I think tax reform should deal with the whole tax code, both the personal side and the corporate side, and it should result in a code that is simpler and fairer to everyone,” he said. “Now tax increases, I think, are off the table, and I don’t think they are a viable option for the joint committee.”
The Ohio Republican drew several lines in the sand, including asserting there will be no government shutdown or debt default on his watch — a signal to his own party not to delay stopgap funding due by the end of this month.
Grim economic news has dominated Washington since lawmakers returned from their summer recess, and all sides are intent on focusing on job creation.
The president last week called for nearly $450 billion in tax cuts and spending in the near term, which he said could spur jobs and help right the economy. This week, he proposed paying for that package through nearly $470 billion in long-term tax increases — most of which have deep bipartisan opposition.
Still, House Minority Leader Nancy Pelosi, California Democrat, said Thursday that her members are united behind the proposed spending and said Republicans should put the president’s jobs package on the floor for a vote.
“On the steps of the Capitol, Democrats stood together enthusiastically in support of the American Jobs Act and its passage now,” she said. “In fact, people are standing in line and on the steps of the Capitol trying to be the ones to be the first sponsors of the legislation.”
Maryland Gov. Martin O’Malley, who is chairman of the Democratic Governors Association, said the success or failure of the president’s jobs-stimulus plan could be the largest factor in whether Mr. Obama wins re-election next year.
“The way the president gets re-elected, frankly, is to do a better job than the other guys of explaining to us, in a forthright and honest way, the changes that are happening in our economy and the choices we need to make as a people,” Mr. O’Malley said Thursday while speaking to reporters at a breakfast held by the Christian Science Monitor.
Mr. O’Malley accused Republicans of standing in the way of the president’s plans for political purposes.
The two parties agree that job creation is the top priority, but their approaches differ markedly.
Democrats call for temporary tax breaks, aid to help keep state and local government employees on the payroll, and massive infrastructure spending. The GOP, meanwhile, argues that government boosts have failed and said the solution is to shave regulations and free businesses.
Mr. Boehner explicitly linked job creation to deficit reduction, saying the one “has everything to do” with the other.
The speaker also disputed reports that he and Mr. Obama had reached a deal during July’s debt negotiations that would have included $800 billion in net tax increases over the next decade.
Mr. Boehner said he and the president had talked about such a plan, but that it had been coupled with major changes to entitlement programs such as Medicare and that Mr. Obama had balked at going that far. Mr. Boehner also said Mr. Obama demanded an additional $400 billion in tax increases late in the negotiations.
The White House on Thursday said it still considers Mr. Boehner’s offer to put revenue increases on the table to be operative, but Mr. Boehner, in his remarks, ruled out higher taxes and said the deal he and Mr. Obama had been working on is likely dead.
“I frankly think it’s hard to put Humpty Dumpty back together again,” he said.
The supercommittee began meeting last week, held a hearing earlier this week and held its first closed-door meeting Thursday morning.
It has been charged with finding at least $1.2 trillion in lowered deficits over the next 10 years in order to win another $1.2 trillion in debt authority. If the committee fails to produce a report, or Congress fails to adopt it, then automatic cuts would take place beginning in 2013.
Mr. Boehner rejected the skepticism many of his colleagues feel over the prospects for the committee, saying it “must succeed.”