Forty House Republicans Back Revenue Increases to Cut Deficit

Forty House Republicans signaled support for revenue increases, joining 60 Democrats yesterday to urge a congressional supercommittee seeking a $1.5 trillion debt-reduction deal to aim for cuts of $4 trillion.

The letter signed by the 100 lawmakers demonstrates possible Republican support for revenue increases that have been a sticking point for the bipartisan 12-member debt-reduction panel. Democrats have been unwilling to consider cuts in spending on entitlement programs such as Medicare without agreement from Republicans to raise more tax revenue.

Any deficit-reduction plan “has to be balanced,” Idaho Republican Representative Mike Simpson said at a news conference, choosing a word often used by House Minority Leader Nancy Pelosi of California to describe the kind of deficit- reduction package she and fellow Democrats would favor. Simpson, a member of the House Appropriations Committee, wouldn’t say how much new revenue should be included.

“What we are saying to the supercommittee is that certainly revenue has to be a part of this and there are different ways that you get revenue,” he said.

The director of the White House Office of Management and Budget, Jacob Lew, said today that the Republicans’ willingness to support revenue increases is a “hopeful sign.”

“The Republicans have to make a decision that they’ll put everything on the table,” including revenue, Lew said at a forum sponsored by Politico Playbook.

Nov. 23 Deadline

The committee is approaching a Nov. 23 deadline for reaching a deal. If the panel can’t agree, or if Congress doesn’t adopt its recommendations, across-the-board spending cuts of $1.2 trillion to defense and domestic programs would take effect in 2013.

“There is a lot of talk about pledges,” Ohio Republican Representative Steve LaTourette said, referring to a nonbinding commitment many Republicans have signed not to support tax increases. “It’s time to put the pledges in a bonfire.”

With the deadline looming, the panel’s Republican members met yesterday in private with House Speaker John Boehner of Ohio and Senate Minority Leader Mitch McConnell of Kentucky. Afterward, participants declined to describe their discussions or say whether Republicans are weighing a new proposal to offer to Democrats.

“I wouldn’t want to say, but you can count the days” to the supercommittee’s deadline, said Senator Jon Kyl of Arizona, the chamber’s No. 2 Republican leader and a member of the special panel.

$2.2 Trillion

Last week, Republicans offered a $2.2 trillion plan that includes $640 billion in revenue raised largely from higher Medicare premiums, rather than from the tax increases Democrats are calling for.

Simpson said he hopes to get more signatures on the letter to the supercommittee. The House has 242 Republicans and 192 Democrats, with one seat vacant.

“All options for mandatory and discretionary spending and revenues must be on the table,” the letter said. “The success of your committee is vital to our country’s future.”

The letter didn’t say whether Republicans would support income-tax increases or tax-break reductions to meet a revenue goal or what that goal should be.

“My willingness to accept revenue increases is directly related to the quality and level” of spending cuts in any package produced by the panel, said Representative Charlie Bass, a New Hampshire Republican who was defeated after six House terms in 2006 and was returned to the chamber by voters in 2010.

‘A Risk’

Bass, whose re-election next year is rated a tossup by the nonpartisan Cook Political Report, said supporting the right mix of taxes and spending cuts is “a risk I am willing to take.”

The ideologically diverse group of House members signing the letter included Republican Paul Gosar of Arizona, who was elected in 2010 with support of Tea Party movement activists, and Democrat Peter Welch of Vermont, a member of his party’s Progressive Caucus.

“We have a practical problem to be solved; it’s not an ideological battle to be won,” Welch told reporters.

Representative Heath Shuler, a North Carolina Democrat whose 2012 re-election race is also rated by Cook as a toss-up, said he would “give up my seat to make sure we have a true path” to economic success for coming generations.

Michael Steel, a spokesman for Boehner, said his boss “has always said that the joint committee has a big job to do, and he appreciates every member’s input.”

Boehner and other House Republican leaders have opposed increasing taxes as Congress and President Barack Obama have grappled with the debt issue.

Democrats signing the letter included Minority Whip Steny Hoyer of Maryland. The lawmakers’ message to the committee, he said, is “don’t go small-bore,” because a bigger plan is needed to create confidence in Congress and restore confidence in the U.S. economic system.

To contact the reporters on this story: James Rowley in Washington at jarowley@bloomberg.net; Heidi Przybyla in Washington at hprzybyla@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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