White House To Seek Tax Hikes in Special Committee Created by Debt Deal

Debt Showdown

House Speaker John Boehner of Ohio, attends a news conference on Capitol Hill in Washington, Monday, Aug. 1, 2011, to discuss the debt ceiling legislation. (AP Photo/Jacquelyn Martin)

Washington (CNSNews.com) – If the negotiated debt bill becomes law as expected, President Obama aims to press the special congressional committee created by the deal to include tax increases as a way to achieve $1.5 trillion in deficit reduction, White House Press Secretary Jay Carney said Monday.

“That committee will be charged with reducing the deficit further, by $1.5 trillion further,” Carney told reporters Monday. The 12-member committee will comprise six Democrats and six Republicans, from both Houses of Congress.

“Everything is on the table for that committee, everything, including both entitlement reform and tax reform. Let’s be clear: The president thinks, as you know, that the biggest possible overall accomplishment in terms of deficit reduction is a desirable goal, as long as it’s balanced. He looks forward to, by the process set up by that committee, to having that debate about what our priorities are.”

The deal agreed to Sunday night was passed by the House of Representatives in a 269-161 vote on Monday evening.

If also approved by the Senate – a vote is scheduled for noon on Tuesday – and signed by the president, the measure will increase the nation’s ability to borrow money by a total of $2.1 trillion in two phases through early 2013. The current national debt is $14.4 trillion. The deal also includes an “enforcement mechanism.”

Allowing the Bush tax cuts to expire would be a goal of the administration, according to a White House release issued late Sunday night.

Under the headline, “The Enforcement Mechanism Complements the Forcing Event Already In Law – the Expiration of the Bush Tax Cuts – To Create Pressure for a Balanced Deal,” the release stated (emphasis in original), “The Bush tax cuts expire as of 1/1/2013, the same date that the spending sequester would go into effect.”

“These two events together will force balanced deficit reduction,” it continued. “Absent a balanced deal, it would enable the President to use his veto pen to ensure nearly $1 trillion in additional deficit reduction by not extending the high-income tax cuts.”

The deal would cut discretionary spending at $917 billion over 10 years and raise the debt ceiling by $900 billion to February. Before the ceiling is increased by an additional $1.5 trillion to endure to early 2013, Congress and the president must agree to an additional $1.5 trillion in cuts over 10 years, decided on by the special committee. Congress would give an up or down vote to the additional cuts recommended by the committee by Dec. 23.

Still, only about $10 billion in spending is cut in the first two years. Beyond the first fiscal year, the cuts are not binding.

If the committee fails to achieve the $1.5 trillion in cuts, an “enforcement mechanism” will trigger spending reductions, beginning in 2013, and these will be split 50-50 between domestic and defense spending.

The enforcement would not affect Social Security and Medicare beneficiaries, but could affect Medicare payments to doctors. The agreement also requires both the House and Senate to vote on a balanced budget amendment to the Constitution before the end of the year.

“We need to, as legislated through this deal, find another $1.2 trillion to $1.5 trillion in deficit cuts,” Carney said. “How are we going to do that? Are we going to do it by asking sacrifice only of middle-class Americans, or seniors, parents of children who are disabled?

“Or are we going to ask that others, including oil and gas companies, corporate jet manufacturers, or the wealthiest Americans share in the sacrifice?”

Carney said this was a debate that Obama was “looking forward to.”

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