Oct. 25 (Bloomberg) -- Representative Tom Cole, one of the chief Republican negotiators of a congressional budget deal, said today that he supports raising revenue as part of talks with Senate Democrats.
Cole, an Oklahoma Republican, said that curtailing tax breaks such as the treatment of private equity managers’ carried interest should be part of the negotiations. He also wants to generate money from U.S. companies’ untaxed overseas profits coupled with a revamp of the federal tax code.
“The reality is, you’re going to have to have a deal here,” Cole said in an interview on Bloomberg Television’s “Political Capital with Al Hunt” airing this weekend. “And a deal means everybody gives something up.”
Cole, a close ally of House Speaker John Boehner of Ohio, offered an insight into how negotiations could unfold: Any willingness on the Republicans’ part to raise revenues would have to be accompanied by Democrats’ willingness to cut entitlement program spending. Republicans, however, won’t insist on curbing President Barack Obama’s health-care law as a condition to keeping the government open.
The outline of the negotiations getting started next week depends on “how big a deal the Democrats want to do and whether or not we want to cut, or connect this with a larger tax reform issue,” Cole said.
Cole expressed optimism that the congressional budget conferees would be able to reach an agreement by the deadline of Dec. 13 set in legislation that ended a 16-day partial shutdown of the government last week. The conferees were appointed to try to avoid another political collision by ironing out spending differences for 2014 and beyond.
The deal to end the shutdown and avert the threat of a U.S. default followed weeks of stalemate that began when House Republicans tried to force a delay in the Patient Protection and Affordable Care Act, Obama’s signature health-care law offering insurance to millions of Americans lacking coverage.
The accord sets a Dec. 13 date for completing the budget talks. It finances government operations through Jan. 15 and suspends the nation’s debt limit through Feb. 7.
Cole said negotiators have to bridge a $90 billion difference in discretionary spending and undo some of the automatic across-the-board budget cuts, known as sequestration, that are scheduled to start in January.
“Both sides would like to deal with the sequester,” Cole said. “And we’re willing to put more revenue on the table to do that, and we would like to do it with entitlement savings.”
Included in what Cole calls a Republican “pro-growth revenue” stance are accelerated oil and gas exploration on federal lands and offshore lease and one-time timber sales.
Cole also indicated that the place to start with long-term cuts to entitlement programs is Obama’s own budget proposal. Some of that overlaps with a budgetary blueprint written by Wisconsin Republican Paul Ryan, chairman of the House Budget Committee and his party’s 2012 vice presidential nominee.
These include the chained Consumer Price Index, an alternative inflation yardstick, as a benchmark for Social Security cost-of-living increases, requiring higher-income Medicare beneficiaries to pay more and slowing Medicare growth by cutting payments to drug companies and health-care providers.
“To me, getting a handle on the entitlement side long term for budget stability is the most important,” Cole said. The president’s proposals are “a good starting point, and the first time,” he said, that he’s put them “on the table.”
“You know, he did not do that his first four years, so I give him a lot of credit,” Cole said. “And he caught a lot of flak from his left wing. I tell my Republican friends, look, look how much outrage he got from some of his core constituents.”
Cole also predicted that House Republicans won’t insist on curbing the health-care law as a condition to keeping the government open. Instead, he said, Republicans may aim to find areas of agreement with Democrats such as eliminating the medical device tax that helps finance the program.
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