–House Speaker Boehner, Senate Minority Leader McConnell Support Plan

By John Shaw

WASHINGTON (MNI) – House Speaker John Boehner and Senate Minority
Leader Mitch McConnell said Wednesday Congress should pass legislation
soon to renew the Bush era tax cuts for one year, setting the stage for
a major tax reform effort next year.

Boehner and McConnell said at a briefing a one-year extension would
provide needed certainty for an economy that is fragile.

“It’s pretty obvious that the economy needs the certainty of the
extension of the current tax rates for at least a year,” McConnell said.
“That would give us the time to begin to grapple with something we all
agree we need to do on a bipartisan basis, which is to reform the whole
tax code. That hasn’t been done in a quarter of a century.”

Boehner agreed a one-year extension of the Bush tax cuts is
critical.

“It’s really important that we provide some certainty to job
creators in our country and extending all of the current tax rates for
at least a year is really important if we are going to help job creators
gain a little more confidence and put Americans back to work,” he said.

The push for a one-year extension of the Bush tax cuts by the
Republican leaders is part of their strategy for avoiding the so-called
fiscal cliff.

This end-of-year cliff will result from the convergence of three
key fiscal events: the expiration of the Bush era tax cuts at the end of
2012, the scheduled imposition of across-the-board spending cuts, and
the need for another debt ceiling increase.

House Republican leaders have said they will hold the tax cut
extension vote in July.

Senate Republicans will presumably try to push the tax cut
extension this summer by trying to pass it as an amendment to other
legislation. Senate Democrats may try to block a direct vote on the GOP
plan.

Congressional Budget Office Director Doug Elmendorf said earlier
Wednesday the cost of renewing the Bush era tax cuts for a decade would
be more than $4 trillion.

The House passed legislation several weeks ago on a party line vote
that would replace the scheduled across-the-board spending cuts of about
$100 billion in fiscal year 2013 with 10-year savings of about $300
billion.

Boehner has said he will resurrect last year’s controversial
approach to increasing the statutory debt ceiling by demanding spending
cuts that are at least as large as the debt ceiling increase.

“We shouldn’t dread the debt limit. We should welcome it. It’s an
action forcing event in a town that has become infamous for inaction,”
Boehner said last month.

Boehner first outlined this formula in a speech in New York in May
2011 in the run-up to last summer’s debt ceiling debate.

“When the time comes, I will again insist on my simple principle of
cuts and reforms greater than the debt limit increase,” he said.

Boehner also said last month that the House will vote this year to
renew the Bush era tax cuts and will also set in motion a special
process to “expedite” tax reform in 2013.

Treasury Secretary Tim Geithner has said the U.S. will likely reach
the statutory debt ceiling at the end of the year, but will be able to
delay the need for increasing the debt ceiling until early next year
with various cash management steps.

** MNI Washington Bureau: (202) 371-2121 **

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