Leahy Wants New Tax Revenue In Debt Ceiling Deal

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(Host) Senator Patrick Leahy wants President Obama to insist that any deal to raise the nation’s debt ceiling includes new tax revenue.

Leahy says if Democrats are going to agree to significant budget cuts as part of that package, then Republicans need to support a plan to close tax loopholes for oil and gas companies.

VPR’s Bob Kinzel reports.

(Kinzel) President Obama is scheduled to meet with members of the Senate Democratic caucus next week to discuss a plan to raise the nation’s debt ceiling.

If Congress doesn’t pass a bill increasing the debt limit by August 2nd, it’s possible that the country will have to default on some of its financial obligations.

Senator Leahy says the compromise plan must be a combination of new tax revenue and budget cuts. That’s why he supports the president’s call to eliminate a series of tax loopholes for large oil and gas companies. But Republican leaders want bigger budget cuts and they strongly oppose the tax changes:

(Leahy) "When you say that there will be no changes in the tax code, that’s a non starter. Especially when the Democrats say, ‘OK, we’re willing to make cuts in a lot of programs that we’ve supported over the years, but you can’t continue to have special breaks for oil companies.’ Especially when they’re charging us a close to $4 a gallon for gas and making ten of billions of dollars in excess profits."

(Kinzel) Leahy also supports another plan that Republican leaders strongly oppose – an income tax surcharge on millionaires.

(Leahy) "I don’t know how you argue that we cannot have at least a tax surcharge on people making over a million dollars a year. I don’t know how one argues against that."

(Kinzel) Leahy says a failure to resolve this issue by the August 2nd deadline will be "a disaster" for the national economy and the pocketbooks of many Americans:

(Leahy) "If there is not an agreement it’s going to be a disaster. Virtually everybody if you’ve got money in a retirement account, if we don’t raise the debt limit, you’re going to find that money is going to be cut back considerably if it’s held in stocks, bonds or anything else. The idea that the United States would end up like some third world country, a debtor nation, I don’t know anybody understands just what a tragedy this would be."

(Kinzel) Leahy says the best way to reach a compromise is for Republican and Democratic leaders to join President Obama in a special summit meeting, out of the glare of the media, at the presidential retreat at Camp David.

For VPR News, I’m Bob Kinzel in Montpelier

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