House Ways and Means Committee Chairman Dave Camp said in an interview on Bloomberg Television’s “Political Capital With Al Hunt,” airing this weekend, that he is reassessing a top 25 percent rate he has proposed as part of a plan to revamp the U.S. income-tax code even as he says he’s “absolute” in opposing any further tax increases.
(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
AL HUNT: We begin the show with Republican Congressman Dave Camp of Michigan, the chairman of the House Ways and Means Committee.
Before we start, I want to say the best news of all. Two weeks ago, you were diagnosed as cancer-free. You’ve been battling it last year, and you were diagnosed. Congratulations. What a wonderful holiday gift.
DAVE CAMP: Thanks a lot. Christmas came early to our house, so I’m very grateful, had a lot of support and prayers and encouragement, and that works.
HUNT: Well, that’s great, Mr. Chairman. Let me take you to the fiscal cliff and the debt ceiling. You’re out of the fiscal cliff frying pan, and you’re into that debt ceiling and sequester fire. You’re essential to all this. Specifically how much should the debt ceiling be increased, for how long, and at what price?
CAMP: I think it’s important that we got the permanent tax policy, because that lets us pivot to comprehensive tax reform, which is so important for growth and jobs.
HUNT: But the debt ceiling comes up in two months.
CAMP: It does.
HUNT: So what - do you - do you increase it? There are business leaders who say, don’t fight over the debt ceiling. Fight over other things, just increase it.
CAMP: Well, absolutely we’re going to not default. That’s just not even part of the issue. But what we need to do is to increase the debt ceiling, also have the sort of spending reform and controls that we need to see, because as I said, it’s out of control. We’ve now done the revenue piece. We now need to move forward with a willing partner to - and there are some common areas we can look at.
For example, look at the Simpson-Bowles commission to start with. The president has also adopted many of these proposals. So let’s move forward on that together.
HUNT: So if you increase the debt ceiling by, say, $1 trillion, $1.5 trillion, do you have to cut spending by $1.5 trillion?
CAMP: I think we’re going to look at significant reforms in spending. We know it’s out of control.
HUNT: But you’re not necessarily tied to dollar for dollar?
CAMP: I don’t think that’s necessarily been established. But what we really need is a partner with Democrats who are willing to now step forward and say, these are the things we need to do. We’re spending more than we bring in. We can’t continue to do that over the long haul. And it is hurting the ability of the economy to grow. It’s suppressing economic growth by about 1 percent, and that’s a million jobs. And obviously, seeing the jobs report today, we need some help on that.
HUNT: You mentioned that - by the way, speaking of that jobs report, 155,000, not great, but not bad.
CAMP: Well, unemployment went up. It’s better than negative. It’s anemic. And we really need to jump-start the economy. The debt and deficit and spending is suppressing the ability of the economy to grow.
HUNT: I do want to ask you this about the spending cuts. A trillion, trillion-and-a-half, where? I haven’t heard Republicans tell me where that is going to come from.
CAMP: Well, we need to start with some of the areas where there’s been some common ground. One is either Simpson-Bowles commission. The other is what occurred in the talks that have happened before. Super-committee talked a lot about areas where we could look at. That has gone out. And, frankly, if you read Bob Woodward’s book, there’s a lot of common areas that we’ve talked about over a number of years -
HUNT: Cost-of-living adjustments, means testing for affluent seniors on Medicare -
CAMP: Chained CPI, as they call it.
HUNT: Chained, chained CPI -
CAMP: Absolutely, all throughout government.
HUNT: What else?
CAMP: Those are some common areas. Well, I think those would start. And we need to begin to have a dialogue with the Democrats, and the president needs to lead his own party on this, which he has to date not done.
HUNT: Will Republicans lay out their specific goals for specific programs that they want to cut -
CAMP: Well, we have. And we’ve done it in super-committee. We’ve done it in Simpson-Bowles discussions. Many Republicans have - I didn’t, but -
HUNT: You voted against Simpson-Bowles.
CAMP: I didn’t, but many Republicans on that commission did. But my issue was not necessarily specific spending cuts. It was the entire amount of revenue that they wanted to take out of the economy I didn’t agree with.
HUNT: Now, the president says, yeah, let’s have spending cuts, let’s do it, but let’s also put together a bigger package and have more revenues, too.
CAMP: Well, we’ve established permanent tax policy. We’ve established the permanent level of revenue the government’s going to get. And we’re not going to go back there again.
HUNT: So you’re not open to even any consideration -even though John Boehner offered $800 billion, and even as much as $1 trillion, and you got $600 billion. So you’re not open to any conversation about that?
CAMP: No. We now need to pivot to the spending side. We’ve established -
HUNT: One hundred percent spending?
CAMP: - permanent tax policy, and we’ve established how much on a permanent basis what the government’s going to get out of the economy, and we’re not going to go for anymore.
HUNT: So no - no -
CAMP: No. That’s an absolute, in my book.
HUNT: OK, let’s go to tax reform. You have talked about lowering rates to 25 percent, corporate and individual. You now have a top rate of 39.6 percent. That would be almost a 40 percent tax cut for the wealthiest Americans. Is that still what you’re going to push?
CAMP: Well, obviously, this was all established in our budget before we’ve had this latest deal, so we’re going to have to go back and look. But I think the idea is - which was established in Simpson-Bowles - a structure of, how low can we get rates if we can broaden the base by closing some of these special interest loopholes? Look, we need a healthier economy. We need to see more jobs being created. And our code is too complicated. It’s 10 times the size of the Bible with none of the good news.
HUNT: But can’t get to 25 percent now, can you? I mean, you may - you may be able to lower it and broaden the base, but 25 percent isn’t realistic.
CAMP: We’re going to still try to get there. And I think it’s important that we have a lower corporate rate, as well as a lower individual rate, and there won’t be as many deductions and loopholes. And, obviously, some of the provisions that came over in this deal that came back from the Senate, obviously, I don’t support. And so we’re going to have to look at all of those and find a way to simplify the code, make it flatter and fairer and more understandable.
HUNT: Thirty percent rate, realistic?
CAMP: Look, I’m going to try to get that rate as low as I can. And if we can get the political consensus to move forward on that, I think there’s some really good policy we can do there.
HUNT: But you won’t tell me what rates you think you can get to.
CAMP: Well, I have to re-evaluate it with the new baseline. But it is important that we got - I guess what’s really critical in this discussion is that we now got a permanent baseline. We don’t have any more temporary tax policy.
HUNT: Well, let me ask you this. Would you do away with the exemption for state and local taxes?
CAMP: That’s going to be one of the key areas we look at.
HUNT: But what - how do you feel about that?
CAMP: Well, I think we’re going to have to have that on the list of one of the things we look at. That is a very key one -
HUNT: But you can look at everything, but what I want to know is, what are things you’re going to - and you don’t have to, you know, specify how much, but are you going to curtail that? Will you curtail that example?
CAMP: That’s clearly one of the areas we’re going to have to have. If we’re going to lower rates significantly, we’re going to have to have that issue looked at.
HUNT: And how about the home mortgage deduction? Does that have to be curtailed?
CAMP: Well, we’re going to have to look at that, as well. And, look, I - first of all, I have a home mortgage. It is most Americans’ largest savings vehicle, so we’re going to have to do that in a very careful way. Are there ways that we might be able to do that with broad consensus and support? But I don’t look at eliminating that in any way. I think we’re going to have to see, should that be available at the very highest levels? And I think that’s something, obviously, that occurred in this last tax policy. We’re going to need to phase out some of those issues, and that’s one we’ll be looking at.
HUNT: Mr. Chairman, you’re a young fellow. So I was around for the ’86 act. It was painful. It was painful. And they got rates lowered. You know how they did it? You know how they did it. I know. They raised corporate taxes. They created - they treated capital gains as ordinary income, raised capital. Now, you’re not going to do any of that, are you?
CAMP: We’re going to try to do this in a revenue-neutral way with the new baseline, both in the corporate and individual side -
HUNT: And you’re committed to that -
CAMP: And I’m committed to that. And my corporate plan has been out there now for over a year.
CAMP: So I believe that this is really important both for the business side and the individual side, because so many businesses file as individuals, and we want to try to have those rates be as close together as possible, and that’s why the 25 rate for both was in our budget last year.
HUNT: The president said it ought to pick up revenue, you ought to do tax reform that gains revenue.
CAMP: Look, the government is taking enough revenue out of the economy now. And what we really need to do is find a way to have the economy grow in a more robust way. And to do that is simplifying, lowering rates, particularly for businesses and individuals, because we’re the highest corporate rate in the world. We cannot sustain that and expect money which is - can go all over the world and has many options to come here in the United States and invest. We want those investments here in the U.S. so that we can grow the jobs here.
HUNT: Finally, let me just circle back. On the debt ceiling, as I understand what you’re saying, we will not default, but - but it’s only going to be approved if there are some sort of spending cuts.
CAMP: We need spending cuts. We need -
HUNT: But is that essential to approve the debt ceiling?
CAMP: Yes. And we need further reforms in entitlements. And the president needs to step up and help lead his party in that direction.
HUNT: Dave Camp, the powerful and cancer-free chairman of the House Ways and Means Committee.
CAMP: Thank you very much.
HUNT: Thank you so much for being with us today.
CAMP: Thanks, Al.
***END OF TRANSCRIPT***
THIS TRANSCRIPT MAY NOT BE 100% ACCURATE AND MAY CONTAIN MISSPELLINGS AND OTHER INACCURACIES. THIS TRANSCRIPT IS PROVIDED “AS IS,” WITHOUT EXPRESS OR IMPLIED WARRANTIES OF ANY KIND. BLOOMBERG RETAINS ALL RIGHTS TO THIS TRANSCRIPT AND PROVIDES IT SOLELY FOR YOUR PERSONAL, NON-COMMERCIAL USE. BLOOMBERG, ITS SUPPLIERS AND THIRD-PARTY AGENTS SHALL HAVE NO LIABILITY FOR ERRORS IN THIS TRANSCRIPT OR FOR LOST PROFITS, LOSSES OR DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THE FURNISHING, PERFORMANCE, OR USE OF SUCH TRANSCRIPT. NEITHER THE INFORMATION NOR ANY OPINION EXPRESSED IN THIS TRANSCRIPT CONSTITUTES A SOLICITATION OF THE PURCHASE OR SALE OF SECURITIES OR COMMODITIES. ANY OPINION EXPRESSED IN THE TRANSCRIPT DOES NOT NECESSARILY REFLECT THE VIEWS OF BLOOMBERG LP.