Nov. 16 (Bloomberg) -- Republican Senator Robert Portman, in an interview on Bloomberg Television’s Political Capital with Al Hunt airing this weekend, proposed extending the expiring U.S. tax cuts, including those for the wealthy, for six months - - with a trigger that if Congress can’t come up with enough loophole closings that the top rate would rise to 39.6 percent.
(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
AL HUNT: Welcome back. We are joined by one of the most influential Republicans in the United States, Senator Rob Portman of Ohio. Thank you for -
ROB PORTMAN: That’s not saying much, is it?
HUNT: No, it is. It is. Senator, you know the huge fight over the Bush tax cuts. The president is adamant that he will not allow the top 2 percent to continue. I know you don’t want any kind of tax increases, but something has to happen. What kind of a deal do you think you could agree to?
PORTMAN: Well, I think there’s only one logical thing to do, and that’s to continue the current tax code for six months. Or maybe it’s a year.
HUNT: - the president (inaudible) he says adamantly not.
PORTMAN: Well, I think he - I think he might consider it, if at this point, when you make that agreement not to create the great uncertainty and the huge tax increases that could push us into recession, which is what, you know, outside analysts are saying, including the CBO and Federal Reserve, but if we make a commitment right now that, once the tax reform is done, which is what ought to happen, pro-growth tax reform, and once the entitlement reform is done, which I think can be done in six months, after all, as you know, the work’s been done by a lot of different groups, there will be increased revenues. Those increased revenues will come from those who are in what are now - what is now the top two brackets. And there could be some other revenue.
HUNT: I understand that’s what you like, but the White House has been adamant, they will not accept that deal. They say we will not accept it on a commitment. Now, where they’ve left some room is right now they say, if you can come up with a deal that raises the kind of revenue right now - not six months from now - they won’t necessarily hold to the 39.6 percent rate. Would you accept something that is - that keeps the rates at about 35 percent or 36 percent and limits deductions, like the 28 percent credit the president proposed, but also increases the estate tax and capital gains and dividends taxes, which is part of this package?
PORTMAN: Well, I mean, I would accept anything that has to do with pro-growth tax reform, one, and, two, entitlement reform. they’re connected, as you know.
HUNT: Ultimately, they are in a big package. But right now, in the short term, in December, are you saying you won’t take any deal on taxes?
PORTMAN: Well, no. I’m saying I think we ought to have a deal on taxes.
HUNT: So why not extend the tax cuts for the 98 percent and come back later and then deal with the upper-income tax cuts later? In other words, have - have the Bush tax cuts expire for the rich and extend them for everybody else, and then next year deal with the tax cuts for the rich?
PORTMAN: Because it’s going to hurt the economy. Everybody who’s looked at it -
HUNT: So that’s - that’s a nonstarter for you?
PORTMAN: But why would you want to do that? Why not say, “Let’s go ahead and reform the tax code, make a commitment now we’re going to have additional revenue”?
HUNT: But you can’t do it. You can’t do it in three weeks.
PORTMAN: Well, no, the - the reform wouldn’t occur now. It would occur six months from now, July 4th -
HUNT: - ever happen.
PORTMAN: Well, if it doesn’t happen, then you would revert back to the existing, you know, law, which was -
HUNT: So the deal - if you don’t come up with a deal, you would go back to the 39.6 -
PORTMAN: Yeah, you have to have a trigger.
PORTMAN: - the president would get what he wants. He wants to sort of exact his political pound of flesh here after the election. I understand that. But let’s not do it in a way that hurts people who are trying to find work, Al.
HUNT: So let’s talk about the overall package. The president says he wants a $4 trillion 10-year package, but he’s counting $1.1 trillion that’s already been done on the spending side. So he says $1.6 trillion would be taxes and the rest would be spending cuts, mainly entitlements. Give me your impression of the size and the shape of that kind of a package.
PORTMAN: Well, look, I am concerned about folks who are taking credit for something that’s already happened, because we’ve got to do so much more.
HUNT: So is that insufficient?
PORTMAN: Well, you know, it is insufficient to deal with the crisis we face. I mean, it’s impending. It’s on our doorstep, $16 trillion in debt. It’s going to $20 trillion if we don’t change direction.
HUNT: And how about the competition, the mix of taxes and spending power?
PORTMAN: Well, you know, we need to have pro-growth tax reform. The exciting opportunity here, Al, is that we can reform our tax code in ways that’s going to create jobs and opportunity. Let’s take advantage of that. We can also reform our entitlement programs to make them actually more efficient, work better for a lot of seniors, give them more choices.
HUNT: Senator Portman, your colleagues, John McCain and Lindsey Graham, have said that Susan Rice is unacceptable as a potential secretary of state nominee because they believe that she didn’t tell the truth about Benghazi. You’re on the Armed Services Committee. Do you feel that - that she is disqualified from what you know so far?
PORTMAN: I don’t - I haven’t looked into her background sufficiently, but I think they can do better, given what happened. I’m so discouraged, Al, by what occurred there and the fact that -
HUNT: You wouldn’t - you wouldn’t necessarily pledge to filibuster the way Senator McCain -
PORTMAN: Well, no. I’d like to - I’d like to look at, you know, her background in a more thoughtful way. But I am - I am very discouraged by what I’m reading and hearing now. And I’m on the Armed Services Committee. I’m also on the Homeland Security and Governmental Affairs Committee.
HUNT: If they can do better, who should be better? Who would be better?
PORTMAN: Well, I don’t know. I like John Kerry, my colleague in the Senate, as a potential nominee. He’s got broad experience. I don’t agree with him on policy issues for the most part, but I think he’s a guy of integrity in terms of his foreign policy issues. He’s actually been willing to stand up and express his own view independent of the administration now and again, including on Syria and other issues.
HUNT: Mitt Romney said this week that he lost the presidential election because Barack Obama gave stuff to blacks and Latinos and women and it caused a larger turnout. Do you agree with that assessment?
PORTMAN: I think we lost the election for a number of reasons. It’s sort of all-of-the-above. I also think we lost it very narrowly, so if you look at Ohio, it was a difference of 100,000 or so votes, making it a more narrow victory for Barack Obama than George Bush had in 2004, when all of the stuff that was very narrow with John Kerry. So it was a close election. You look at the national numbers, the country’s divided, Al.
HUNT: But was it because of the stuff that the -
PORTMAN: Well, I will tell you, from - you know, I was the chairman of the Ohio campaign. And I will tell you what my view is, having done some of the after-action, you know, reviews. One, it was the fact that we weren’t responding for months and months to a barrage of negative ads - you and I have talked about this - including on the auto industry and other things in Ohio. We were outspent, but also I think we could have responded to some of the attacks in earlier and more appropriate ways.
HUNT: But that’s different than saying he gave stuff -
PORTMAN: Second is -
HUNT: So I gather you do disagree with Governor Romney on that?
PORTMAN: Well, I think second is turnout. I mean, the Democrats did a better job on turning out their voters. I mean, if you look at what happened in Ohio, there actually was -
HUNT: I’m not going to get an answer on whether you disagree on stuff?
PORTMAN: Well, you know, I think there are other ways to explain this. And I - you know, I think what is surprising to people is to find out that Barack Obama received significantly fewer votes than he received in 2008, but so did Republicans
PORTMAN: And then, finally, Al, I will say, on the economic issues that you care so much about, you know, I think we weren’t able to take these bigger issues about the economy, about the deficit, and about the proposals, the five-point plan and so on, and - and enable people to understand how it’d affect them and their lives.
HUNT: Senator Rob Portman, you will be a major player in all these issues in the months ahead. Thank you so much for joining us.
PORTMAN: Thank you, Al. Great to be on with you again.
HUNT: And when we come back, the last word.
***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.