–Key Democratic Senator: ‘Better’ To Grand Bargain ‘Now’

By John Shaw

WASHINGTON (MNI) – Sen. Chuck Schumer, the third ranking Senate
Democrat, said Tuesday that he is “optimistic” an agreement can be
reached during the post-election congressional session to avert the
fiscal cliff.

In a speech at the National Press Club on tax reform, Schumer said
he believes that Senate bipartisan talks among the so-called “Gang of
Eight” can be a pivotal role in crafting an agreement.

“I absolutely believe a deal can happen,” Schumer said, adding that
policymakers should seek a “real Grand Bargain” to replace the fiscal

“It’s better to do it now if we can,” he said, referring to the
post-election Lame Duck session.

Schumer said that a solid deficit reduction agreement would consist
of $4 trillion in deficit reduction, including about $1.5 trillion in
additional revenues.

Schumer said that as part of such an agreement Democrats must be
willing to accept “serious entitlement reform.”

“I want to come to an agreement … . Speaker Boehner, I think,
would like to come to a deal,” Schumer said.

Schumer made a case for fundamental tax reform but said the 1986
model of revenue neutral tax reform is not workable in an era of massive
budget deficits and rising income inequality.

“We have a revenue problem. We need tax reform to solve it,”
Schumer said.

Schumer said tax reform should be built around three principles:
cutting back, but not eliminating, tax expenditures, returning top
marginal tax rates to Clinton era levels, and narrowing the differential
between earned and unearned income.

He said a capital gains tax rate of 39% is too high and a rate of
15% is too low, but would not say the precise level that he supports.

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

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