The debate over raising the nation’s debt limit has morphed into class warfare in the Senate Thursday as Democrats attacked Republicans over their refusal to eliminate tax breaks for the wealthy that could raise revenue and shrink the deficit. Republican lawmakers were on the defensive a day after President Obama chastised them in a televised press conference over their refusal to allow any kind of tax increase as part of the debt ceiling negotiations, including a proposal to reduce the tax exemption for corporate jet owners. During his press conference, Obama also criticized lawmakers for scheduling recess breaks without first securing a deal on the debt ceiling by the Aug. 2 deadline set by Treasury Secretary Tim Geithner.
The GOP began a counterattack Thursday, starting with Texas Sen. Jon Cornyn, who called Obama’s comments about the GOP “outrageous,” “galling” and “campaigning sort of rhetoric.”
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Sen. Minority Leader Mitch McConnell, R-Ky., went to the Senate floor and invited Obama to visit with the Senate GOP to discuss the debt ceiling negotiations.
“That way he can hear directly from Senate Republicans, why what he’s proposing will not pass,” McConnell said.
White House spokesman Jay Carney declined the invitation, saying, “That’s not a conversation worth having.”
After Obama criticized Congress for leaving town without a deal, Senate Majority Leader Harry Reid, D-Nev., canceled the weeklong July 4 recess to allow lawmakers to work out a debt limit deal. Both sides agree that they must come up with a deal that reduces the deficit by several trillion dollars, but Republicans want to accomplish it solely through spending cuts while Democrats believe raising revenue through taxes is also necessary.
Reid tried to make the case for tax increases Thursday by telling reporters a story reported in the media about someone who had left their receipt at an automated teller machine, disclosing a balance of $100 million.
“These are the kind of people that should be paying their fair share,” Reid said.
Democrats say they want to close “tax loopholes,” and eliminate exemptions that benefit big oil companies, ethanol producers and higher-income earners. Some of the tax breaks would hit jet and yacht owners; another would target thoroughbred racehorse owners.
Reid suggested that if Republicans aren’t willing to include such tax increases in the debt ceiling talks, he might hold individual votes on each measure, putting the GOP on the spot and escalating the class warfare rhetoric.
“All of these things are special favors in that tax code,” Senate Majority Whip Dick Durbin, D-Ill., said.
But Republicans say the tax increases Democrats are proposing would bring in very little money but eliminate jobs. Corporate jet production, for instance, employs thousands of workers.
Many Republicans and some Democrats want a comprehensive tax code overhaul to deal with tax breaks, rather than targeting individual exemptions.
“They want to do it as a selective punishment of various people they don’t like,” Sen. Orrin Hatch, R-Utah, said. “We’re not defending anybody, or the oil companies either. We are saying it is cheap politics to selectively pick out people that the Democrats don’t like and then punish them by taking away various tax expenditures that may be good in certain cases. Most of them are there for very important reasons. It’s ridiculous and they are just hammering groups they don’t like.”
