* Democrats want tax revenues as part of package
* Republicans push for tax reduction
* Panel faces tough deadline
By Donna Smith
WASHINGTON, Sept 22 The leaders of a
congressional "super committee" squared off on Thursday over
the hot-button issue of tax increases and how new revenues
might fit into the panel's deficit reduction proposals.
Democratic co-chair Senator Patty Murray, at the start of
the committee's hearing on the roughly $1 trillion in special
interest breaks and loopholes that permeate the U.S. tax code,
made clear she expects the panel to include some tax increases
along with spending cuts in its final product.
"We have to address both spending and taxes," Murray said.
Republican co-chairman Representative Jeb Hensarling made
clear he was more interested in overhauling the tax code to
reduce income tax rates, which he said would help generate
"My hope on this is we may be able to achieve rigorous
agreement that fundamental tax reform, even if limited to
American businesses, can result in both revenues from economic
growth for the federal government and jobs for the American
people," Hensarling said.
The 12-member bipartisan committee was created by an August
deal that cleared the way for President Barack Obama to
increase U.S. borrowing authority. At Thursday's second public
hearing, members concentrated on taxes, going over issues that
have been debated by lawmakers for years.
Republicans are pushing the panel to undertake a tax code
"The most pro-growth thing we can do is to fundamentally
reform our tax code," said Republican Senator Pat Toomey.
The Nov. 23 deadline for the panel to present
recommendations to the Senate and U.S. House of Representatives
gives the panel of six Republicans and six Democrats little
time to rewrite the U.S. tax code.
OVERHAUL AS AN ELECTION ISSUE
The panel could lay the groundwork for a broad tax overhaul
by instructing the tax-writing House Ways and Means Committee
and Senate Finance Committee to develop tax reform legislation
for Congress to consider next year.
That would put the overhaul issue right in the middle of
next year's presidential election campaign and it could help
Republicans blunt Obama's push to raise taxes on the wealthy.
Polling data has shown that most Americans favor asking the
rich to pay more taxes.
Ways and Means Committee Chairman David Camp, a
Republican, has expressed some interest in the super committee
setting a tax overhaul in motion. But Finance Committee
Chairman Max Baucus favors leaving tax reform to the committees
The super committee has been asked to come up with at least
$1.2 trillion in savings over 10 years. If it does not, a
similar amount of across-the-board cuts automatically will go
into effect in January 2013. Those cuts would be divided evenly
between military and domestic programs.
Democrats have made clear they will not accept the entire
$1.2 trillion savings to come from spending alone and refuse to
consider cuts to popular federal health and retirement programs
unless some new tax revenues are part of the package.
Adding to the pressure on the panel is a threat by
financial credit rating agencies to lower the government's bond
rating if lawmakers do not develop a credible long-term plan to
Most budget analysts say that cannot be done without
scaling back spending on Medicare and Medicaid healthcare
programs for the elderly and poor as well as the Social
Security retirement program.
Last month Standard and Poor's cut the government's coveted
AAA bond rating and voiced concern Washington was too divided
to tackle its deficit problem.
(Editing by Bill Trott)