Republicans want to move beyond tax rate fight on the wealthy

WASHINGTON Sun Dec 9, 2012 2:13pm EST

U.S. Senator Bob Corker (R-TN) takes part in a panel discussion titled ''Fixer-Upper: Repairing the U.S. Housing Market'' at the Milken Institute Global Conference in Beverly Hills, California May 1, 2012. REUTERS/Danny Moloshok

U.S. Senator Bob Corker (R-TN) takes part in a panel discussion titled ''Fixer-Upper: Repairing the U.S. Housing Market'' at the Milken Institute Global Conference in Beverly Hills, California May 1, 2012.

Credit: Reuters/Danny Moloshok

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WASHINGTON (Reuters) - Conservatives have no choice but to give into White House demands on higher tax rates for the wealthy, if the fiscal debate is to move to their main goal, overhauling big government benefits programs, several Republicans said on Sunday.

"There is a growing group of folks who are ... realizing that we don't have a lot of cards as it relates to the tax issue before yearend," Republican Senator Bob Corker of Tennessee said on the "Fox News Sunday" program.

The Bush-era tax cuts for all Americans are set to expire at the end of the year if Congress and the Obama administration fail to pass legislation to extend the tax breaks.

The White House and Republican congressional leaders are deadlocked over the tax rate on upper income earners, and without resolution massive tax rates are to kick in shortly.

It is this $500 billion in tax increases along with $100 billion in automatic spending cuts that comprise the year-end "fiscal cliff." Economists and policymakers warn it could drive the U.S. economy into recession.

President Barack Obama and fellow Democrats are insisting that the tax break expire for families with incomes above $250,000, and remain in place for other taxpayers. They are wagering that if all the tax cuts expire, the public will blame Republicans for raising taxes on the middle class.

"Some of our people think if we just dig in and hold strong we can stop it. That's just not the case. It happens automatically. You have to do something," said Republican Representative Tom Cole on CNN's "State of the Union."

"In my view, we all agree that we're not going to raise taxes on people that make less than $250,000, we should just take them out of this discussion right now," Cole of Oklahoma said.

Rank and file Republicans are eager to move beyond that fight to overhauling Social Security and Medicare, which are both on track to start running out money without major reforms.

"A lot of people are putting forth a theory - and I think it has merit - where you go ahead and give the president the ... rate increase on the top 2 percent, and all of a sudden the shift goes back to entitlements," Corker said.

Republican Senator Tom Coburn, also of Oklahoma, said it would take significant reforms to the Medicare health care and Social Security retirement programs for him to agree to a tax rate increase.

"Will I accept a tax increase as part of a deal to actually solve our problems? Yes," Coburn said on ABC's "This Week" television program.

(Reporting by Rachelle Younglai, additional reporting by Lisa Lambert; Editing by Jackie Frank)

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Comments (26)
I don’t see what the impasse and all the fuss is about. What’s so bad about going back to the tax rates for the super-wealthy that were in place in the Clinton years?

Just about everybody was doing fine in those years, including the super rich. I seriously doubt that the extremely comfortably well-off will be hurt all that much, OR AT ALL, by paying a slightly higher rate.


Dec 09, 2012 1:41pm EST  --  Report as abuse
And one more thing. I wish the media and politicians would stop calling Social Security and Medicare “Entitlements”.

They are NOT “Entitlements”, they are Earned Benefits! Get it through your collective heads. And while we need SS reform to keep it from running out of money, as it stands now, there is $1.7 Trillion in the SSTF, and it is expected to be solvent for the next 22 years.

Had presidents Reagan, Bush Sr., and Clinton not “borrowed” a total of $1.9 Trillion from the SSTF to pay down deficits during their terms, there would be $3.6 Trillion in the Fund, or thereabouts.

And SS has nothing to do with our $16 Trillion Nat’l Debt, so stop blaming the program as if it’s the culprit.

Dec 09, 2012 1:46pm EST  --  Report as abuse
BOOWAH wrote:
Social Security is completely off the table no matter what. It doesn’t contribute a dime to the national debt and is solvent for another two decades! Besides, 60% of the American People don’t want it screwed with! Go over the cliff, default on our debt by refusing to raise the debt ceiling, and put the blame where it lies……with the Republicans!

Dec 09, 2012 2:00pm EST  --  Report as abuse
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