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Senators Ayotte & Portman on the Budget

Senators Ayotte & Portman on the Budget

By John King, USA - April 14, 2011

KING: Today's political battles are often shaped -- you might argue, haunted -- by defining debates of yesterday. True or not, it is part of Republican lore now that President George H.W. Bush lost his 1992 reelection bid because conservatives were mad and stayed at home after he broke his "read my lips" promised not to raise taxes.

If Republicans refuse to even consider tax increases now, it's pretty hard to imagine any grand bipartisan compromise to reduce Washington's deficit spending habit.

So, a bit earlier, I began a conversation with two freshmen Republican senators, Kelly Ayotte of New Hampshire and Rob Portman of Ohio, with President Obama's demand repeated again this morning that wealthy Americans must pay more.

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OBAMA: We can't exempt anybody from these efforts, that it's not a appropriate for us to ask for sacrifices from everybody except for the 2 percent of Americans who are doing best. But rather, we should ask everybody to participate in this effort to get our fiscal house in order.

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KING: Senator Ayotte, let me start with you. Are you adamant, absolutely positively under no circumstances tax increases or do you at least have an open mind saying if the rest of the package is OK, maybe you can convince me there?

SEN. KELLY AYOTTE (R), NEW HAMPSHIRE: Well, I have to tell you right now with where we are in our economic recovery. I don't think we should be increasing taxes. And when he talks about taxes on the wealthy, let's just frame who that is. Many small business owners, in fact, a huge chunk of them in this country, those taxes go through their personal incomes and we're talking about taxing small businesses at a time when we need them to grow and thrive. So, I think it would hurt our economic growth and I wouldn't support that.

KING: Senator Portman, you have a somewhat unique voice in this debate because you're in the Senate now. You served in the House. You were George W. Bush's budget director. You also served as a policy advisor back in the day to George H.W. Bush. I want to take you back to that experience. Go back -- imagine when it's 1990 when George H.W. Bush brought Democrats, brought Republicans to Camp David, to Andrews Air Force Base.

Is our deficit debt crisis now worse than then or not as bad?

SEN. ROB PORTMAN (R), OHIO: It's far worse. And it's far worse because of the fact that between Medicare and Medicaid and Social Security, we probably have about $100 trillion unfunded obligation going forward.

That wasn't the case. Our deficit as a percentage of our economy was also lower and our debt, our national debt was lower as a percent of the economy.

So, it's more difficult now for us to deal with the issue. It's also more important that we show leadership to do so.

KING: And so --

PORTMAN: I would draw this interesting comparison because you mentioned the 1990 budget agreement and the risks that then President Bush took. If you recall, they came back to haunt in the 1992 election campaign.

KING: He lost an election. Let me interrupt -- because he lost an election. The president of the United States who happened to be a Republican at the time broke his "Read my lips, no new taxes" pledge. And you're right. There was a consequence to him. He lost an election.

You could make an argument that Bill Clinton never would have balanced the budget were it not for the tax increase given to him by a Republican president, George H.W. Bush.

Should Republicans now have the open mind and the courage to maybe lose their jobs like President Bush did for the good of the country and at least say entering the conversation, "We won't flatly ideologically, reflexively rule out any tax increases?

PORTMAN: There should be no ideological or, you know, flat denial of anything. But there should be an acknowledgement that what's best for the economy right now is not to raise taxes, it's to reform taxes.

And, by the way, there's a consensus about that on both sides of the aisle. If you look at what the fiscal commission did -- they said, one, we've got to get the spending under control, understanding that spending is a big problem here. It's going up as a percent of our economy, and in every other measurement. But, second, they said we've got to grow this economy and that means we need tax reform. So, they explicitly rejected the idea of raising taxes and instead said let's reform the tax code.

And, by the way, this is what Paul Ryan proposed in the budget.

And the president, yesterday, when he talked about this, did not accurately reflect what's in the Ryan budget. The Ryan budget does not say you're going to have this big new tax cuts. What it says is, we have to take our current code and make it more efficient and better for the economy and better for growing jobs.

AYOTTE: We can't lose sight that we obviously have or we're on the path to have the highest corporate tax rate in the world, and we're just not competitive enough. So, we have to reform our tax code. We got to have jobs and growth here to get out of this crisis, as well as getting serious about spending.

KING: But if we do tax reform, not the current code, rip it up, start over, make it flat or make it fair, or make it more simple, make it less confusing, perhaps put some lawyers and accountants out of business -- is it possible, would each of you accept that -- if I could get a yes or no, it'd be great -- that in the end the government got more money, more revenue as long as you were satisfied with the details of tax reform?

PORTMAN: Well, I think the government would end up with more revenue under any analysis that I've seen that is not a static analysis. In other words, if you look at how the behaviors are going to change, because by a better tax code, you encourage more economic growth. It's pretty simple.

AYOTTE: I would agree with Senator Portman on this. That will have greater revenue because of the economy growth. There won't be an increase in taxes. There will be greater economic growth because our businesses will be able to thrive and grow and we'll be more competitive with other countries around the world.

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KING: Republican Senators Ayotte and Portman earlier today.

 

John King, USA

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