A day after President Barack Obama proposed raising $1.6 trillion in revenues over the next decade as part of a budget deal, U.S. Sen. Chuck Grassley, R-Iowa, objected to what he said is the implication that tax policy is the sole problem with the government’s finances.
“The president has said, it’s all about taxes. Well, it ain’t all about taxes. We don’t have a taxing problem,” Grassley told Iowa reporters on a conference call Wednesday, repeating his contention that raising taxes simply enables greater spending.
Instead, Grassley called for the president to propose spending cuts and for Congress to ensure all tax increases go to deficit reduction.
Grassley, while focusing his attention on spending, didn’t completely rule out voting in favor of a tax-rate increase, however. When asked whether he ever could, the senator replied, “I’d rather vote for broadening the tax base.”
With the election now past, the lame-duck session of Congress is facing expiration of the Bush-era tax cuts and Obama’s payroll tax reductions, as well as automatic spending cuts at the end of the year. This so-called “fiscal cliff” is at the center of talks the White House and Republican leaders are entering into.
Republicans have objected to letting any of the Bush-era rates rise, while the president campaigned on raising rates on the wealthy but keeping them intact for households earning less than $250,000.
The president didn’t detail how the $1.6 trillion in revenues would be realized, but the target is twice what he was offering last year when he and House Speaker John Boehner nearly reached a “grand bargain.” That proposal also included spending cuts the White House offered that many Democrats balked at.
Grassley, on the conference call, said his goal is to maintain parity between small businesses, some of which pay individual tax rates, and the rate corporations pay. The corporate rate is 35 percent, although Republicans and the White House have proposed lowering it. The top individual rate is at about 35 percent.
Grassley said broadening the tax base is preferable, saying there was significant business expansion after the 1986 tax reform law passed.