Supercommittee: Boehner calls tax plan fair offer

WASHINGTON (AP) ? House Speaker John Boehner publicly blessed a Republican deficit-reduction plan Tuesday that would raise $300 billion in additional tax revenue while overhauling the IRS code, bucking opposition by some GOP presidential hopefuls and colleagues wary of violating a longstanding point of party orthodoxy.

Boehner, the top Republican in Congress, spoke as time grew perilously short for agreement by the deficit-fighting “supercommittee.” The panel has until a week from Wednesday to vote on any compromise, but several officials said that in reality, perhaps as little as 48 or 72 hours are available to the six Republicans and six Democrats.

While Boehner’s voice is important, his endorsement does not mean all Republicans will follow him or that a deal is in sight. Republicans have been unified for two decades in opposition to higher taxes, while Democrats on the supercommittee insist on additional revenue before they will agree to cuts in benefit programs like Medicare as part of a compromise.

The speaker said that the plan, outlined a week ago to Democrats on the committee, was “a fair offer.” Adding tax reform would generate economic growth, he said, speaking as the supercommittee groped uncertainly for a compromise to reduce red ink by $1.2 trillion or more over a decade.

Any deal must be certified by the nonpartisan Congressional Budget Office as meeting the $1.2 trillion target, circulated to lawmakers and then posted publicly before the committee takes formal action. Failure to act would trigger $1.2 trillion in automatic deficit cuts in 2013 that both sides say they want to avoid.

The full committee hasn’t met in several days, but various subgroups have been in near constant contact.

More than deficit reduction is at stake, one year into an era of divided government.

Democrats are hoping to add elements of President Barack Obama’s jobs legislation to any deficit-cutting deal, including extensions of a Social Security payroll tax cut and unemployment benefits that are due to expire at the end of the year. A comprehensive rewrite of farm programs may hang in the balance, too, and lawmakers also must pass legislation to assure sufficient funds to reimburse doctors who treat Medicare patients.

As the pace of private talks intensifies, the two sides vie publicly for the high ground in public opinion.

“I am still hopeful that a few Republicans will put their country first and come to us with a credible offer with real revenue,” Sen. Patty Murray, D-Wash., co-chair of the supercommittee, told reporters as she emerged from a late-afternoon meeting.

Earlier, the Republican Senate leader, Mitch McConnell of Kentucky, said GOP members on the committee outlined a proposal several days ago and have yet to receive a response from Democrats. “It’s been a long week, waiting for a counter-proposal,” he said.

The twin issues of taxes and benefit programs have long been stumbling blocks in budget negotiations.

In negotiations last summer, according to numerous officials, President Barack Obama and Boehner were considering sizeable cuts to benefit programs as well as an overhaul of the tax code that would have raised as much as $800 billion in additional revenue ? money that Republicans said at the time would have come from economic growth. The talks ultimately failed.

In his comments Tuesday, Boehner cited the importance of tax overhaul in the proposal that Sen. Pat Toomey, R-Pa., made to supercommittee Democrats last week.

“It’s important for us to, in my opinion, reform the tax code. And we’ve got the highest business tax rate in the world. We’ve got a personal tax system that’s so complicated it costs Americans about $500 billion a year to comply with the current tax code,” he said.

Boehner asserted that the changes would “make America more competitive and produce more economic growth. And so I do believe that reforming the code is a step in the right direction. The details of how we get there, frankly, I think are yet to be worked out.”

Republican officials have said the offer made by Toomey envisions an overhaul that would drop the top tax rate on personal income to 28 percent from the current 35 and shave or eliminate some itemized deductions that are commonly used. The top corporate rate would also fall.

The result would be an estimated $250 billion in additional revenue over a decade, they estimate.

Despite Boehner’s comments ? and Toomey’s credentials as an opponent of tax increases ? GOP presidential contenders Newt Gingrich and Rick Perry said they were prepared to oppose a plan along the lines of the one under consideration. Another candidate, Mitt Romney, brushed aside a question on the subject.

Supercommittee Republicans also support a proposal that would replace the current measurement of inflation used to adjust income tax brackets and cost-of-living increases with another, less generous one. They estimate it would result in an estimated $50 billion in higher tax revenue and reduce spending by roughly three times that amount.

Obama backed a similar plan last summer in his talks with Boehner. More recently, Democrats on the supercommittee included it in an offer, although liberals made clear their unhappiness and it was subsequently jettisoned.

Both Boehner and Rep. Jeb Hensarling of Texas, the GOP co-chair of the supercommittee, explained the Republican proposal to members of the rank-and-file at a closed door meeting.

According to numerous officials who attended, Hensarling displayed charts that sought to place the offer in the context of other scenarios that might occur if there is no agreement. Among them are increases in tax rates that would occur beginning on Jan. 1, 2013, if all of the cuts enacted when President George W. Bush was in office expire as currently scheduled.

“They haven’t thrown me out, so I guess I got a good reception,” Hensarling later said of his reception.


Associated Press writers Alan Fram in Washington and Jim Davenport in Columbia, S.C., contributed to this story