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Some U.S. House Republicans bending on anti-tax stance

Source: Thomson Reuters Foundation - Fri, 30 Nov 2012 20:47 GMT
Author: Reuters
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* Some Tea Party-backed members flexible on tax rates

* Obama encouraging more Republicans to stray from leaders

* Might help reach eventual deal on cliff

By Rachelle Younglai and Kim Dixon

WASHINGTON, Nov 30 (Reuters) - A growing number of Republicans in the House of Representatives - including a handful of Tea Party-backed conservatives - are signaling greater flexibility than their leaders to reach a "fiscal cliff" deal with President Barack Obama.

They are not buckling on demands to slash spending or agreeing with Obama's exact proposals to avert across-the-board tax hikes and spending cuts set to start on Jan. 1.

But unlike House Speaker John Boehner, they suggest they would be open to higher tax rates on wealthy Americans as part of a broader deal to slash deficits.

Obama is hoping to appeal to more potential renegades to get a deal to avoid the massive tax hikes and spending cuts that economists say could tip the economy into a recession.

"If we can get a few House Republicans on board, we can pass the bill ... I'm ready to sign it," Obama said on Friday at an event in Pennsylvania.

The vast majority of Republicans in the House, led by Boehner, say they will not accept any higher tax rates, preferring to increase tax revenue through reforms and closing loopholes.

But among those newly voicing flexibility is Tea Party-endorsed Representative Sean Duffy of Wisconsin, who said he backs a "balanced" approach - adopting the language Democrats, including Obama, use to describe a tax rate increase on the rich, although he said he would rather raise revenue in other ways.

"I'm not at rates, I'm at revenue, I'm at loopholes," Duffy said. "But listen, revenue should be revenue, whether you are doing it by rates or loopholes."

HIGHER THRESHOLD

Representative Allen West of Florida, who had strong Tea Party backing but lost his bid for a second term, said he was open to a higher tax rate on those earning more than ${esc.dollar}2 million - a far higher threshold than Obama's push to raise taxes on families with net incomes above ${esc.dollar}250,000 a year.

"If you want to talk about a compromise, that's a fair compromise," West said. "I want people to get to that million, I want people to get over that. Small business are 75 to 80 percent of our economy. I want to incentivize them."

Even though West lost his seat, he would still be able to vote on a fiscal cliff deal since the new Congress is not sworn in until January.

Justin Amash, another Tea Party movement favorite, said everything needs to be considered to reduce the country's debt burden.

"I don't think it would be a good idea to raise tax rates," said the Michigan representative who identifies himself as a libertarian. But Amash said: "I am not going to take anything off the table if we can resolve some of our biggest issues as a country."

Amash has a perfect conservative voting record according to the Club for Growth, which evaluated whether freshmen lived up to their promises of fiscal constraint.

Several members or their aides expressed similar sentiments earlier in the week, among them seven-term Representative Mike Simpson of Idaho.

Republicans hold 241 of the 433 seats currently filled in the House, which has two vacancies. If Democrats vote as a solid block, they may need another 25 votes from Republicans to extend expiring tax cuts for 98 percent of taxpayers, as Obama wants, leaving the wealthiest with tax increases.

These comments contrast with what is still seems to be the dominant sentiment among Republicans, as voiced by Idaho Representative Raul Labrador.

"Any Republican who is talking right now about raising taxes is a fool. They are going on national TV and they are saying they are going to raise taxes for a phantom deal that doesn't even exist," Labrador said.

House Republicans also separately expressed concern that they are losing the publicity edge to Obama.

"We are getting our socks cleaned in the PR wars," said Representative Pat Tiberi of Ohio.

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