WASHINGTON – With another fight over the national debt brewing this summer, congressional Republicans are de-emphasizing their demand for politically painful cuts to retirement programs and focusing on a thorough rewrite of the U.S. tax code.
Reining in spending on Social Security and Medicare remains an important policy goal for the Republican Party. But House leaders this week launched a series of meetings aimed at persuading rank-and-file lawmakers that tax reform is both wise policy and good politics and should be their top priority heading into talks with Democrats over the need to raise the federal debt limit.
The move comes weeks after President Obama responded to Republican demands to cut expensive federal retirement benefits by offering to shrink Social Security cost-of-living adjustments and raise Medicare premiums. The proposals, included in the president’s budget request, outraged seniors, and some Republicans fear embracing them would be political suicide.
There is no such ambivalence, however, about simplifying the tax code and lowering the top rate, which jumped from 35 percent to 39.6 percent as part of a year-end budget deal that still rankles Republicans.
“The conference will unite around tax reform,” said House Majority Whip Kevin McCarthy, R-Calif., who hosted the first “listening session” on the issue Thursday. “The window is now.”
House Ways and Means Committee Chairman Dave Camp, R-Mich., led the session, offering polling and focus-group data showing that voters are hungry for simpler, fairer tax laws. Camp has already started drafting legislation that would wipe out the current welter of exemptions and deductions and replace them with sharply lower rates, an approach championed by Erskine Bowles and Alan Simpson, the co-chairmen of Obama’s fiscal commission.
“We’re not going to take the current code and see what comes out. We’re going to take a blank piece of paper and see what goes back in,” said Camp, who advocates a streamlined code with just two brackets and a top rate of 25 percent.
The House strategy also holds some appeal in the Senate, where key Republicans say it may offer a more palatable alternative to negotiating a budget deal directly with Obama. Senate Republicans are under pressure from the White House to produce their own debt-reduction plan to counter Obama’s proposal to reduce borrowing by $1.8 trillion over the next decade through higher taxes as well as cuts to retirement programs.