GOP aides refute Obama’s claim of GOP support for tax increases

Neil Munro White House Correspondent
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GOP officials are slamming President Barack Obama’s claim that Republicans have supported his push for raising tax revenues by closing tax loopholes.

He has made the claim repeatedly in the last few days while he and his aides demand new tax increases in exchange for a fiscal deal that would stop imminent spending cuts required by the sequester law.

“These cuts do not have to happen,” Obama told a meeting of governors Monday, after listing a series of likely cuts to state health-care budgets.

“Congress can turn them off any time with just a little bit of compromise … [so] we also need Republicans to adopt the same approach to tax reform that Speaker [John] Boehner championed just two months ago,” he claimed.

“We’d be able to reduce the deficit by … getting rid of wasteful tax loopholes that benefit the well-off and the well-connected,” he said.

Obama suggested the Republicans’ supposed turnaround is prompted by dislike of him. “I know that some people in Congress reflexively oppose any idea that I put forward, even if it’s an idea that they once supported,” he declared.

But Obama’s narrative is untrue, say GOP legislators and spokesmen.

Since 2011, Boehner and other GOP leaders have said a new cut in tax rates could be funded by the closure of tax loopholes.

The lower tax rates will curb the size and ambition of government, while also spurring the economy, they say.

Boehner and his fellow Republicans have reiterated their offer since early November, shortly after Obama’s victory at the polls.

“My daily reminder: Republicans want to close loopholes in the tax codes … to lower rates & create jobs, not fund more Washington spending,” said a Feb. 25 tweet by Brendan Buck, Boehner’s press aide.

In a later tweet to White House spokesman Jay Carney, Buck also said White House officials do not share the GOP’s focus on tax-reform.

“@PressSec I’ve noticed you guys leave out the part about lowering rates, creating jobs. Just about raising taxes for you. Thats not reform.”

GOP legislators are also pushing back.

“I’ll work with the President to close loopholes, but only if it results in hardworking taxpayers getting a simpler, fairer tax code and an economy with more jobs — that is real tax reform,” said a Feb. 12 statement from Rep. Dave Camp, the chairman of the House‘s tax-writing committee.

“Instead of closing loopholes to lower rates and create more jobs, the President closes loopholes simply to pay for more spending in Washington,” Camp said in response to Obama’s call during his State of the Union speech for tax increases.

White House officials echo Obama’s claims, and insist that Democrats and Republicans expected tax increases would be approved to avoid the sequester that was scheduled by the 2011 debt-ceiling deal.

“No-one believed that … the replacement for the sequester would include spending cuts only,” Carney claimed Monday.

The president wants to “buy down the sequester in a balanced way,” he added, and he “has approached this in a spirit of compromise.”

In 2011, Obama proposed the sequester cuts — worth roughly $1.2 trillion over 10 years — in exchange for the GOP’s agreement to raise the federal government’s debt limit up to $16 trillion.

The sequester can be lifted if Obama and Republicans agree on an alternative deficit-cutting plan. They have not been able to agree on a plan, partly because Obama wants to increase the federal government’s tax income, even after winning a new round of taxes during the December 2012 “fiscal cliff” deal.

If not lifted, the sequester is slated to trim $85 billion from the federal government’s $3.8 trillion budget.

However, because of federal accounting rules, actual spending cuts during 2013 will be less than $85 billion.

That’s because many 2013 spending decisions by agencies are only commitments to spend money over the next several years.

For example, budget rules say the agencies must account for major contracts — such as building a warship or a bridge — in the year a program is launched, even though the checks will be sent out over a period of several years.

So, even if the $85 billion cut is fully implemented, it will only slice an estimated $42 billion from spending in 2013, according to a report by the Congressional Budget Office.

“If lawmakers chose to prevent those automatic cuts each year without making other changes that reduced spending by offsetting amounts, spending would be $42 billion higher in 2013 and $995 billion (or about 2 percent) higher over the 2014–2023 period than is projected in CBO’s current baseline,” said CBO’s February report, titled “The Budget and Economic Outlook: Fiscal Years 2013 to 2023.”

That $42 billion is only about 1 percent of 2013 spending.

GOP aides also said administration officials — including Homeland security secretary Janet Napolitano — are holding the nation hostage until they get tax increases. On Feb. 25, Napolitano gave a press conference in the White House where she said the sequester would cut manpower needed for border security and cargo-checks.

“Napolitano in briefing room to sell ‘If we don’t get a 2nd round of tax hikes, we’ll compromise homeland security’ message,” said a Feb. 25 response tweet from Rory Cooper, a press aide to Majority Leader Rep. Eric Cantor.

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