House Democrats Give Up Tax Hikes for Long-Term Debt Deal

July 27, 2011 - 11:12 AM

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Rep. John Larson, D-Conn., center, flanked by Rep. Xavier Becerra, D-Calif., left, and House Assistant Minority Leader James Clyburn of S.C., gestures during a news conference on Capitol Hill in Washington, Wednesday, July 27, 2011, following a Democratic Caucus. (AP Photo/Harry Hamburg)

(CNSNews.com) – House Democratic leaders say they will support a debt-ceiling deal that does not include new tax revenue – a longstanding demand – as long as the debt ceiling is raised in one step, and by enough to see the nation through the 2012 elections.

Speaking to reporters at the Capitol Wednesday, House Democratic Caucus chairman John Larson (D-Conn.) said Democrats would not accept a short-term increase in the debt ceiling, even if their demand for higher taxes is met.

“I think that the dark cloud of uncertainty with the debt ceiling still hanging over everyone’s head, what our caucus is adamantly clear on – and you heard Jim Clyburn say this, and what we’re recommending to the President – if by chance the Republicans come up with the votes on their own, and there is a short-term deal that goes to the President’s desk, he has said he’ll veto that.”

Earlier, Larson called on President Obama to veto any short-term increase in the debt ceiling.

Larson also pointed out that previous short-term debt ceiling increases have been “clean,” without spending cuts or tax increases attached. However, when asked if Democrats would support a clean, short-term increase Larson said that even a clean increase would have to be long-term.

“We’d have to see what it looked like,” he said. “Not if it continues to postpone or put the debt [ceiling] off.”

Larson did say that a plan offered by Senate Majority Leader Harry Reid (D-Nev.) that did not include any tax increases – but extended the debt ceiling past the 2012 election – would receive support from House Democrats.

“[A] Harry Reid plan would probably pass here with 180 Democratic votes,” Larson said.

When pressed, Larson said that Democrats have not abandoned their desire for higher taxes, but would accept a tax-free deal as long as it was a long-term deal.

“We were for, and agreed, that the big approach was probably the best approach,” Larson said. “Those negotiations they [House Republicans] walked away from. Every single subsequent phase of any negotiation between Republican leaders, nonpartisan, between Republicans and Democrats, even within their own caucus, they have walked away.

“What we said is, given the alternatives of a [House Speaker] Boehner (R-Ohio) plan or a Reid plan, we would vote for the Reid plan.”

Boehner’s plan would involve two shorter-term debt ceiling increases of $900 billion and $1.6 trillion, respectively. In between the two increases, the plan would create a special congressional committee that would have to find $1.8 trillion in budget cuts before the second debt ceiling increase could take place.

House Democrats rejected this proposal, favoring instead a long-term debt-limit hike – without tax hikes -- proposed by Reid.

Assistant Minority Leader James Clyburn (D-S.C.) – the third-ranking House Democrat – said that the reason House Democrats would support Reid’s plan – and give up their demand for higher taxes – is because Reid’s plan is a long-term plan that does not cut entitlements.

“It is all about compromise,” Clyburn told reporters. “The Reid plan is a big compromise. Yes, the Reid plan takes revenue off of the table. The Reid plan also takes entitlements off the table. Neither one of those – we were big on entitlements, they [Republicans] were big on revenues – all that washes away.”

The White House has been adamant that any deal to raise the debt ceiling must do so for approximately 18 months, giving the government enough borrowing room to last through 2012, when Obama is up for reelection.

“The only bottom line that I have is that we have to extend this debt ceiling through the next election, into 2013,” Obama said July 22, after talks with Boehner broke down.