Speaker John Boehner made a speech today stressing the need for President Obama and House Republicans to find “common ground” on the fiscal cliff. To that end, he promised that the House GOP would be willing to reform the tax code to raise more revenue. From his prepared remarks:
(Obama, Boehner meet at White House. / Getty Images)
It involves making real changes to the financial structure of entitlement programs, and reforming our tax code to curb special-interest loopholes and deductions. By working together and creating a fairer, simpler, cleaner tax code, we can give our country a stronger, healthier economy.
A stronger economy means more revenue, which is what the president seeks.
Because the American people expect us to find common ground, we are willing to accept some additional revenues, via tax reform.
Some have dubbed this a “compromise.” But it’s not clear whether Boehner is actually making any concessions to Democrats.
Boehner and Republicans have long promised to enact comprehensive tax reform that would curb tax exemptions as long as that reform lowered tax rates instead of raising them. He’s also long said he’s open to more revenue so long as it comes from a stronger economy rather than higher taxes. Again, nothing new there. That’s classic supply-side economics, and most Democrats and most economists doubt it applies to the current tax code. So there’s no deal if that’s what Boehner is proposing.
But Boehner’s final sentence is interesting: “Because the American people expect us to find common ground, we are willing to accept some additional revenues, via tax reform.” That sounds like he’s accepting some version of the Simpson-Bowles approach to tax increases, in which you close tax breaks and deductions and use some of the money to lower rates and some to reduce the deficit. That’s not easy to do, but it is possible to do, and it came up often in the closed-door negotiations between the Obama administration and Boehner last summer. In the end, though, those negotiations failed because Boehner couldn’t sell his caucus on a revenue number the Obama administration would accept.
So the question here isn’t whether Boehner is open to some new revenues through tax reform. That’s been on the table before. It’s whether his members are open to enough new revenues through tax reform such that they can actually strike a deal with the Obama administration.
