Tom Coburn, one of the three Republican members of the Senate's "Gang of Six" attempting to develop a bipartisan long-term fiscal plan, appears to be ruling out any proposals calling for a meaningful increase in revenue:
"There's no plan to have a significant tax hike on anyone," Coburn said on conservative talker Laura Ingraham's radio show. "I don't think there's any of the three of us who will embrace tax hikes."...
The Oklahoma conservative suggested that the Gang of Six is examining a kind of tax reform similar to the type suggested by President Obama's fiscal commission, in which marginal rates are lowered but many tax credits are eliminated from the code.
"Will some people pay increased taxes? I'm sure they will," Coburn said of the resulting tax burden from such a plan.
Assuming that Coburn is using current tax rates as his baseline, what he's saying pretty much rules out the possibility of the Gang of Six producing a comprehensive and balanced deficit reduction plan. Without revenue increases, the only way to close the deficit is to cut spending, and that means doing things like ending Medicare, as the the House has already proposed.
However, in the unlikely scenario that Coburn is using current law as his baseline, his statement isn't all that big deal?under current law, at the end of 2012, the Bush tax cuts expire across the board. It's not that hard to put together a reasonable long-term fiscal plan using the tax code of the Clinton era as a starting point.
Unfortunately, I've seen nothing to suggest that Coburn was using current law as his baseline. And by taking any meaningful revenue growth off the table, even revenue growth that will occur under current law, Coburn's statement seems likely to doom the Gang of Six to failure.
The good news is that current law isn't a bad alternative to a negotiated agreement, so there's no point in taking a bad deal.
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