In the politically charged debate surrounding the federal deficit and the fate of federal spending in 2013, a short-term compromise may be hard to come by.
Sen. Lindsey Graham (R-S.C.) and Sen. John McCain (R-Ariz.) have been working across the aisle with Sen. Carl Levin (D-Mich.) and others to potentially agree to close some tax loopholes in exchange for delaying steep, government-wide budget cuts already mandated by law.
Sen. Pat Toomey (R-Pa.), who put forward the idea last year of closing those loopholes, isn’t on board. “I’m not a fan of the defense cuts that are coming in the sequester,” Toomey said at the Brookings Institution.
“I don’t think it’s a good idea to go into the tax code,” he said, adding that it could undercut the kind of “pro-growth tax reform” that he seeks.
Toomey’s speech comes one week after Sen. Patty Murray (D-Wash.) argued that Toomey’s plan actually was a tax cut for the wealthy disguised as a tax increase. And Murray argued that lawmakers may have a better chance at solving the nation’s deficit problem if they allow sequestration to happen, because if Bush-era tax cuts expire, it would release Republicans from their pledge not to increase taxes.
In the new year, Republicans could institute what would then technically be a tax cut — but would increase revenues over 2012.
Toomey disputed both points, saying that while his proposal may have reduced the overall tax rate for wealthy Americans, it would cap the number of itemized deductions — and limit deductions used primarily by the wealthy.
And he dismissed as “cynical” Murray’s political calculus for the sequester. “I don’t agree with that approach at all,” Toomey said.
Levin declined to comment about the difference of opinion. “There’s a lot of discussion going on among a lot of people,” he said. “I just want to leave it at that because that’s the best way for any of the discussions going on to bear fruit.”