Deficit Reduction Plan Should Not Lower Top Rates, says Schumer
October 10, 2012 | By Sean Lyngaas | email@example.com
The third-ranking Democrat in the Senate, Charles Schumer, voiced opposition in a speech at the National Press Club on Oct. 9 to lowering tax rates for the wealthy as part of any bipartisan compromise on the deficit.
“It would be a huge mistake to take the dollars we gain from closing loopholes and put them into reducing rates for the highest income brackets,” Schumer told reporters at the Newsmaker event. He characterized this approach as similar to “Reagan-style tax reform” put in place by a now “obsolete” 1986 law.
The New York Senator said that conventional thinking on tax reform on Capitol Hill –- lowering rates and closing loopholes –- should be “scrapped” in favor of a plan that he said would reduce the deficit, favor the middle class, and not lower the top rate for the wealthiest Americans.
While taking top-rate cuts off the negotiating table, Schumer suggested an overhaul of entitlement programs like Social Security and Medicare would appeal to Republicans. “The lure for Republicans to come to the table around a grand bargain should be the potential for serious entitlement reform, not the promise of a lower top-rate in tax reform,” said Schumer.
Schumer’s objection to top-rate cuts runs counter to bipartisan proposals from the Simpson-Bowles Commission and the so-called “Gang of Eight” in Congress. While crediting both of these plans for adding to the policy debate, he warned against using rate cuts as “the starting point for negotiations on tax reform.”
When asked if his plan had the backing of the Senate Majority Leader Harry Reid of Nevada or Senate Finance Chairman Max Baucus of Montana, Schumer made clear that his was an independent proposal. “This is my idea … they [other members, the White House] are going to have to each judge the plan for what they think,” he said.
Schumer stressed the importance of getting his tax plan out now before the November elections, saying, “it might be too late then.” He added that popular support for the Democrats’ side of the tax debate for the first time in decades makes the time ripe for a reform plan like his.
Schumer was upbeat about the possibility of a bipartisan compromise on deficit reduction during the “lame duck” session of Congress after the November elections. “The combination of the election and, even more importantly, the 'fiscal cliff'” has made bipartisan deficit reduction “much more possible than a year ago.” Despite disagreeing with the Gang of Eight on top tax rates, Schumer complimented their efforts as “perhaps our best hope right now to achieve a bipartisan deal” to avoid the fiscal cliff.