Idaho U.S. Rep. Mike Simpson still thinks that tax and entitlement reform are within reach of Congress.
But he predicts it’s going to come in pieces instead of one grand bargain. And before a bipartisan group of senators and representatives get there, it’s going to be ugly.
“The really ugly part of this is going to be over the next three months,” Simpson said.
That ugliness will include another fight over the debt ceiling that places in doubt whether the U.S. will pay its bills, a default that could further hurt the nation’s credit rating. It also will include a vote on whether to keep the federal government and payments for Social Security and other programs going.
Where Simpson sees grimness, Idaho’s other Republican in the House, Raul Labrador of Eagle, sees leverage. Thesecond-term congressman and former immigration lawyer thinks the threat of default and government shutdown is necessary to force Congress to address the nation’s $16 trillion debt.
The two Idahoans reflect each side of the divide in a House majority that faces a Senate controlled by the Democrats and four more years of President Barack Obama in the White House.
FISCAL CLIFF DEAL
Simpson, a former Blackfoot dentist and Idaho House speaker beginning his eighth term, serves as chairman of the House Appropriations Subcommittee on Interior, Environment and Related Agencies. He was one of 85 Republicans who supported the tax deal that broke a logjam and prevented Congress and the country from going over the so-called fiscal cliff.
The deal did not include the spending cuts, entitlement reform and new tax framework that Simpson and Idaho Sen. Mike Crapo have both advocated. That $4 trillion package, based on the work of the Simpson-Bowles deficit reduction commission, has been the outline of negotiations between Obama and House Speaker John Boehner. Crapo was a member of the commission, which is named for Wyoming’s Alan Simpson, a longtime U.S. senator, and Erskine Bowles, a former White House chief of staff under President Clinton.
Simpson was hopeful but skeptical that Congress could resolve the issue during its lame-duck session. He handily won re-election in one of the most conservative districts in the nation — Idaho’s 2nd — even though he said that increasing revenues had to be on the table.
“I said before the election if Obama was re-elected, tax rates are going to up,” he said.
Now that the tax vote is out of the way, there is more interest in a grand deal, Simpson said. “I noticed more people are saying we should have just done Simpson-Bowles,” he said.
A WORKING MAJORITY?
Former Idaho Democratic Congressman Walt Minnick, now a Washington, D.C.-based lobbyist, agrees. Now that 85 Republicans have voted with Democrats on the tax issue, he said, they have the opportunity to work together with moderate Democrats on deficit reduction.
“I think that group is easily expandable to be a majority in the House,” Minnick said.
Reforming entitlements is difficult because most Americans support cuts unless they are hurt by those cuts. Republicans have called for raising the Medicare eligibility age and for means-testing all entitlements.
When President Obama recommended computing inflation so payments and the cost of Social Security and other programs would rise more slowly, liberal Democrats protested. Simpson said discretionary funding, where more than $100 billion has been cut the past two years, offers far less deficit-cutting opportunity.
Congress first will have to vote on the $1.2 trillion in budget cuts called sequestration, which was delayed until March 1 by the fiscal cliff vote. It also will have to vote for a continuing resolution to keep the federal government funded by March 27, and on raising the debt ceiling. Each vote could widen the current political divide.
LEVERAGING DEFAULT
Labrador said he voted against the tax deal because it did nothing to cut federal spending. He even abstained from voting for Boehner to retain his post as speaker.
But the Puerto Rico-born lawmaker, expected to be a leading GOP player in the upcoming immigration debate, said he’s ready to compromise on a deficit plan if a realistic proposal to cut $4 trillion in the next decade is on the table.
Labrador was one of the House Republicans who wanted to use the leverage of the debt ceiling limit to force more cuts in 2011. He’s not sure what it will take to get decisive action.
“I’m not sure either party is serious about reducing our debt and deficits,” Labrador said.
Simpson, who has been close to Boehner, sees it differently.
“The best we can get out of a deal on debt ceiling is a commitment on both sides to eliminate $2 trillion and let the committees do their work,” Simpson said.
The same would be true on the tax reform vote, lowering overall rates by eliminating exemptions and tax breaks, he said.
“I think more and more people are beginning to realize that,” Simpson said. “I can tell you the Republican caucus’ No. 1 priority is to reform the tax code and reform the entitlement programs,” he said.
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