Cantor Open to Possible Compromise in Debt-Limit Talks

[General Mung Beans]

http://politicalticker.blogs.cnn.com/20 ... ?hpt=hp_t2

Cantor opens the door to possible compromise in debt-limit talks

July 6th, 2011
06:27 PM ET
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Cantor opens the door to possible compromise in debt-limit talks
Deirdre Walsh By: CNN Congressional Producer Deirdre Walsh

(CNN)-A day before congressional leaders meet with President Barack Obama to discuss how to raise the debt limit, the number-two House Republican opened the door to possible compromise, saying Wednesday he is open to closing some of the tax "loopholes" that Democrats have been pushing, but only if those items are offset by reducing taxes in other areas.

"If the president wants to talk loopholes, we'll be glad to talk loopholes," House Majority Leader Eric Cantor said at his weekly session with reporters on Capitol Hill.

"We've said all along that preferences in the code aren't something that helps economic growth overall," Cantor said. But he immediately qualified his comment, noting, "We're not for any proposal that increases taxes and any type of discussion should be coupled with offsetting tax cuts somewhere else."

Cantor drew a distinction between closing tax "loopholes" - such as those for corporate jet owners - and other tax-related proposals raised by Democrats in the negotiations that he said the GOP could not accept because they amounted to tax hikes. Republicans have strongly opposed a proposal floated by Democrats to eliminate tax deductions for individuals making over $200,000 a year.

Cantor's comments Wednesday represented a change from the GOP message that tax revenues were off the table in the debt talks. While congressional Republicans have indicated that they would be willing to look at closing some loopholes, they have insisted up to now those changes had to be done as part of broader tax-reform effort that lowered corporate rates - not as part of a debt-limit agreement. In a sign that Cantor's remarks represented a shift, his office quickly circulated press reports covering his comments.

The majority leader pushed back at President Obama for saying that Republicans left the bipartisan negotiations led by Vice President Joe Biden because they opposed ending a tax loophole for corporate-jet owners, insisting, "that's just not the case."

"Clearly the other side wished to impose tax hikes on small businesses and families in this country," Cantor said.

Sen. Chuck Schumer, a Democratic leader, said his party's pressure had put Republicans on the defensive.

"Our focus on tax loopholes seems to be putting Republicans on their heels on the issue of revenues," Schumer said in a statement. "But if Republicans are going say we can only close these loopholes in a revenue-neutral way, it is like taking one step forward and then two steps back. The point isn't to get rid of these loopholes simply to pay for new tax breaks elsewhere; it's to do it in a way that contributes to the reduction of the debt."

A GOP aide told CNN that Cantor's comments were coordinated with Speaker John Boehner's office, and the two met Wednesday morning to discuss Boehner's meeting with Obama over the weekend and the upcoming White House meeting on Thursday.

Senate GOP Leader Mitch McConnell, asked whether he could support closing loopholes, appeared skeptical, telling reporters, "I'm open to tax reform; we need to do it broadly. To sort of cherry pick items in the context of this current negotiation with the White House strikes me as pretty challenging."

Cantor outlined the spending cuts in the Biden-led talks, indicating they could be a blueprint for a deal that could pass the House. Cantor said the group discussed cutting "non-health care" mandatory spending by over $300 billion; over $400 billion in health care mandatory spending; and a mix of discretionary spending reductions plus interest savings, which added up to more than $2 trillion in cuts over a ten-year period.

The number-two Republican echoed President Obama's opposition to any short-term approach to raise the debt limit for a few months. "I agree with him. We need to go and drive towards a deal which is not a deal which kicks the can down the road," Cantor said.

Interesting how it develops

[Simon_Jester]

Could you expand on that, Mung? What trend do you perceive here?

[Edi]

Cantor is flat out lying if he says the Republicans have in any way changed their position. Their platform is still "No revenue increases of any kind for the government for any reason" and this is just a ploy to try to seem more reasonable while not changing that position one iota. Until we have concrete evidence to the contrary in the form of real, actual actions, Cantor is lying. He also happens to have investments that will increase in value if there is no solution to the debt ceiling problem, so he has a conflict of interest in that regard.

[Crossroads Inc.]

At this point Obama should basically take him up on this knowing Cantor is lying.
He should agree to not give on anything else, and then, when the time comes for Cantor to suddenly jumpship, Obama should start playing what he said 24/7 with the message "Republicans are lying straight to my face America"

[General Mung Beans]

Could you expand on that, Mung? What trend do you perceive here?

I meant this may help bring about some tax reform which while bringing in about the same revenue will help simplify the tax code (very slightly) and get rid of tax loopholes.

[Simon_Jester]

But how is this interesting? It won't actually change anything. Under Cantor's proposal (which I have a sneaking suspicion he has no intention of honoring), closing these loopholes isn't going to affect the budget- he wants the same number of dollars of spending cuts, with the same consequences that will overwhelmingly affect the poor, the unemployed, and the future viability of the US economy.

This strikes me as not interesting at all- it's just Cantor trying to grandstand in order to prevent people from making the charge that he is on the record as standing foursquare against anything that might make life more expensive for the rich and powerful. The mere fact that he started in a position where such a charge could stick says a lot. And then this offer- which boils down to "promise to give me everything I want before we start negotiating and maybe I'll make a deal with you."

[GrandMasterTerwynn]

http://politicalticker.blogs.cnn.com/20 ... ?hpt=hp_t2

Interesting how it develops

Did you bother to read the article beyond "See, Republicans can be nice, really!"? If you read the article, you'd learn that Cantor said that:

he is open to closing some of the tax "loopholes" that Democrats have been pushing, but only if those items are offset by reducing taxes in other areas.

Also:

We're not for any proposal that increases taxes and any type of discussion should be coupled with offsetting tax cuts somewhere else.

So . . . compromise? Where's the compromise? The GOP is still refusing to discuss any sort of increase in revenue, and anything that would involve not screwing over poor people at the expense of wealthy white businessmen.

[SirNitram]

It's nice how he explicitly states that. It's not about deficit reduction, it NEVER WAS, but he made it quite clear.

[Broomstick]

Let me explain this a different way:

Say, hypothetically, I have a salary of $100,000 a year but I have 1,000,000,000,000 in credit card debt. At this point, my credit card company is becoming concerned I won't be able to pay it all back. Or even half of it. I say, "OK, tell you what - I'll cut out ALL spending other than food and shelter, and cut that in half. Problem solved!". No, it's not - because the debt is so great that if I don't increase my income it still won't get paid off.

That's what Cantor is doing - saying we'll just cut spending and that will solve the problem. As soon as he says "he is open to closing some of the tax "loopholes" that Democrats have been pushing, but only if those items are offset by reducing taxes in other areas" he's not increasing the government's income. He's just shuffling things around, that's all. Nothing changes in the end. The government will still have insufficient money to cover the bills.

[Simon_Jester]

This example would work just as well if it were 'only' a million dollars in credit card debt. At an annual interest rate of anywhere near 10%, even if you stop spending money on anything but food and shelter, you're never going to get ahead.

The US isn't quite to that point- it is still possible in theory for the US government to start paying down the debt by cutting spending, at least in the arithmetic sense- but the cuts in question would represent so drastic a remaking of the relationship between the government and the citizenry that it would be the next closest thing to a revolution.

And the attempt to bring this about in a massive political game of chicken seems... less than wise.

EDIT: on the subject of this being reined in by the wealthy backers of the Republican Party, I'm not so sure anymore- revolutionary parties often reach a point where they turn on their former sponsors and the less committed chunks of their support base, and say "I have no further need of you" when they're allowed to keep self-radicalizing long enough.

[Patrick Degan]

The GOP version of "compromise" remains, as always, the Democrats' abject, unconditional surrender.