July 31 (Bloomberg) -- Congress should retain tax cuts passed under former President George W. Bush without offsetting the $40 billion cost of including families earning more than $250,000, said Indiana Representative Mike Pence, the third-ranking U.S. House Republican leader.
“It is imperative that we preserve the tax relief,” Pence, chairman of the House Republican Conference, said in an interview on “Political Capital with Al Hunt” airing this weekend on Bloomberg Television. “I also believe that if we get the economy moving again and provide both tax relief and reform going forward, that as the economy expands federal revenues will expand.”
Pence, a fifth-term lawmaker, was lukewarm to a suggestion by Erskine Bowles, co-chairman of President Barack Obama’s national debt commission, that three-quarters of budget savings should come from spending cuts and the rest from tax increases. The tax-boost idea would get “very little support among Republicans” in the Capitol, Pence said.
“Raising taxes during the worst economy in 25 years is a profoundly bad idea and I won’t support it,” he said.
The Bush-era income tax cuts expire at the end of this year. Obama and congressional Democrats want to extend them for households earning up to $250,000 and let them end for wealthier taxpayers. Republicans insist on keeping the tax cuts for all income levels without reducing spending or raising taxes elsewhere to make up for the cost.
About three months before midterm elections, Pence said he’s optimistic that Republicans may be able to retake control of the House, though he didn’t predict the odds of a change in control.
“I think House Republicans believe we have a genuine opportunity to win back the majority of the House of Representatives,” Pence said. The party lost its previous majority in the 2006 elections.
The top priorities of a Republican majority would be “to get this economy moving again and to get federal spending under control,” he said. Asked about Obama’s health-care overhaul, Pence, 51, said repealing it remains a goal.
“I believe House Republicans are going to work to repeal Obamacare lock, stock and barrel,” he said. “Obviously, the president will be in office in 2011. He certainly would have the ability to veto any effort that we make.”
House Republicans would nevertheless seek a debate over how to better control health-care costs and could use their power over House spending bills to make changes, he said.
While Republicans are making fiscal discipline a top issue, Pence defended a speech he made on the House floor supporting approval of funds for General Electric Co.’s backup engine for the F-35 Joint Strike Fighter. A factory in his district would benefit if the House approved the $450 million cost of continuing development of the engine.
U.S. Defense Secretary Robert Gates says a second engine is a wasteful expense, and Obama has threatened to veto legislation that includes the funding.
Pence pointed to a study by the Heritage Foundation, a conservative research group in Washington, that said the U.S. should have more than one source for an engine produced under a defense contract that will span decades.
“The fact that one of those two engines in part is manufactured in Indiana, we certainly welcome,” Pence said. “I really do believe that it was in the interest of our national defense and in the interest of fiscal responsibility.”
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