Senators team up to avert fiscal fall
Tenn., Miss. lawmakers confront budget impasse
WASHINGTON — A resolution is months away, but Tennessee’s and Mississippi’s pragmatist senators, all Republicans, said Tuesday they are working to prevent a fiscal train wreck set in motion by continued congressional procrastination.
Sen. Lamar Alexander has been working behind the scenes to have a legislative initiative ready by September to address the so - called “fiscal cliff” looming Dec. 31. It could be rolled out for the new budget year Oct. 1 or introduced immediately after the Nov. 6 elections, but he said compromises would require strong presidential leadership.
Sen. Bob Corker of Tennessee has been toiling away independently at language that incorporates what he calls “pro -growth tax reform,” eliminating some tax deductions and lowering tax rates across the board in preparation for the year- end debate. Corker has said he doesn’t expect any resolution before Election Day, when he is up for a second six-year term.
Alexander said the “most orderly process would be for us to get our ideas together, to get ready, to prepare ourselves to act responsibly (and) to say to the next president, ‘Mr. President, we want you to succeed’… and to say that whether he’s a Democratic president or a Republican president.”
“Extension of the (Bush- era) tax cuts for a reasonable period of time to permit us to resolve all these issues seems almost inevitable,” Alexander added. He said the “one essential” in any comprehensive proposal is dealing with mandatory entitlement programs.
Corker said he was “unaware of anyone on either side of the aisle who wants to see a $5 trillion tax increase occur at the end of the year, and the looming deadline provides the first, best opportunity to link pro -growth tax reform that eliminates loopholes and lowers rates with a long-term plan to restore solvency to Social Security and Medicare.
“We’re crafting legislative language toward that end, which we hope will be useful in the process,” he said.
The efforts are seen as preparation for a series of either comprehensive or stop -gap measures that must pass by the end of the year.
Sen. Thad Cochran of Mississippi said he wants to avoid “being pushed into tax increases and a sequester that really has an unfair result.” He added: “We need comprehensive reform in place of the hit- or-miss, drive -by negotiations that are going on right now between the Congress and the president.”
Sen. Roger Wicker, R-Miss.,
who along with Alexander and 32 other senators attended a meeting last week with the president of the New York Federal Reserve, said he came away “encouraged that there are a lot of efforts under way to have a product ready for the lame duck.”
What’s at stake is a series of year- end deadlines that include the expiration of the Bush- era tax cuts on individual rates, capital gains and dividends and the 2 percent payroll tax cut that gives a $50,000-a-year wage earner an extra $85 a month. Also to be resolved is some way around the congressionally mandated $1.2 trillion in automatic spending cuts after a “Super Committee” was unable to reach agreement last November.
That spending cut process, called sequestration, calls for across-the -board cuts in defense and nondefense spending on Jan. 1 of next year. Wicker and Nunnelee said sequestration would be devastating not just to their state but to national security.
The Committee for a Responsible Federal Budget on Tuesday updated its “realistic baseline” for the future with a set of policy assumptions that include Congress extending the 2001 and 2003 tax cuts, continued patches to the Alternative Minimum Tax, averting the 27 percent tax cut in Medicare physician payments and a repeal of the automatic sequester.
Democrats have shown some wiggle room on a longstanding position that any extended income tax cuts should go only to those making less than $250,000 a year. U.S. Rep. Steve Cohen, D-Tenn., said House Democrats and Obama have been clear that $250,000 is the highest threshold they’d agree to.
He said he expects the payroll tax cut will continue as a stimulative measure “because the economy needs a push.” Sequestration wouldn’t hurt his district “too much,” although it would affect the naval operations at Millington, he said. And he said it was “entirely possible” that a financial crisis like the meltdown in the waning days of the 2008 presidential race could still occur.