An agreement to avert the so-called fiscal cliff must include up-front revenue “this month,” Senate Finance Committee Chairman Max Baucus said.
“Once that revenue is locked in, we can then turn to overhauling our tax code for the modern economy,” the Montana Democrat said at a conference today in Washington.
The timing of tax increases is one of the divisions between the two parties in their negotiations on the cliff, which is a combination of more than $600 billion in spending cuts and tax increases scheduled to take effect in January.
Baucus said he was confident that Congress would reach a meaningful agreement and begin working to overhaul the tax code and try to restrain the growth in health-care costs.
President Barack Obama has called for about $1 trillion in tax increases for top earners that would begin taking effect immediately and another $600 billion that would occur through an overhaul of the U.S. tax code.
In their proposal yesterday, House Republicans said they would support $800 billion in additional revenue through a tax overhaul that would lower rates. Their letter to Obama didn’t specify whether any taxes would increase in 2013.
“We should not put off the hard decisions with gimmicks or with triggers,” Baucus said at the conference, sponsored by the Campaign to Fix the Debt, a bipartisan group that advocates deficit reduction. “That’s what got us to this point in the first place. It’s time to bite the bullet and make the tough decisions, and make them now.”
Baucus said an agreement to avert the fiscal cliff could spur business confidence.
“This is an opportunity, an opportunity to commit to a balanced plan to bring our national debt back down to sustainable levels,” he said.
Baucus also said changes should be phased in over time to avoid slowing down the economic recovery.
“We cannot break the promise of Medicare and Social Security,” he said.