Bush Tax Cuts Not Part of Debt Ceiling Negotiations
With the clock ticking and time running out for Republicans and Democrats to reach an agreement on raising the debt ceiling, President Barack Obama is signaling that repealing the Bush tax cuts is not an option to raise revenues.
“When we’re talking about the revenue that’s on the table, we’re not talking about the issue that the president’s put forward in his framework, and that is the Bush tax cuts and the tax cuts to the wealthiest Americans,” White House press secretary Jay Carney said Monday.
The $14.3 trillion debt ceiling is set to be eclipsed Aug. 2, and Republicans are demanding steep cuts in spending be made before they vote to raise the borrowing limit.
On the other side of the aisle, Democrats are insisting that any spending cuts be accompanied by revenue increases.
Instead of focusing on the enormous tax cuts for the wealthiest of Americans, the Obama administration is looking at an even more narrow tax base. The White House wants to close tax loopholes for oil and gas companies, along with those directed at the owners of private aircrafts.
“This is about subsidies for oil and gas companies — $40 billion — a loophole that allows for the owners of private corporate jets to benefit enormously in the billions, compared to, say, Delta or American Airlines, and other measures that benefit millionaires and billionaires, or in some way, you know, complicate our tax code in a way that it isn’t helpful,” Carney said.
Some Republicans, however, are unwilling to raise revenues in any way, shape or form. Some even view the closing of tax loopholes as essentially a tax increase. Hardline Republicans are demanding that the Obama administration agree to $2 trillion in spending cuts before they vote to raise the debt ceiling.
“It isn’t true that the government would default on its debt [Aug. 2] because, very simply, the treasury secretary can pay the interest on the debt first and then, from there, we have to just prioritize our spending,” Rep. Michele Bachmann (R-MN) told CBS’ “Face the Nation.”
“I have no intention of voting to raise the debt ceiling because right now the federal government continues to spend more money than what it takes in. The American people want us to get our house in order.”
If U.S. lawmakers do not act to raise America’s borrowing limit of $14.3 trillion, the U.S. government will effectively default on its obligations, possibly sending the worldwide economy into a downward spiral.