Rep. John Kline: Republicans have agreed to increasing revenues ... and it seems all the president can do is talk about raising tax rates, on family businesses. I think that is a mistake, serious economists we talk to and hear from say that’s a mistake. It’s going to have a negative impact on the economy, it would further restrict growth, we have such a low growth rate right now we’d plunge back into a recession.
Rep. Erik Paulsen: The elections are behind us. I think it’s really important for people to get out of campaign mode and sit down and negotiate over those issues. That means being results-oriented, being solution-oriented, and we can absolutely avoid going over the fiscal cliff. But it’s going to take the president coming forward with his balanced approach. What does he recommend on the spending side of the ledger, too?
Rep. Michele Bachmann: President Obama said in 2010 that maintaining the current tax rates for all Americans was “the right thing to do.” Two years later, the economy is still struggling and it is equally as important today that we do not cripple job creation and economic growth by raising taxes.
Rep. Chip Cravaack: He’s going to have a fight on his hands. … The way they’re proposing it, those at $250,000 and above, that runs the government for eight days. All this is, is vilification of those that make over $250,000. It’s creating an enemy that isn’t really there. These people are the small business owners of America. They’re the people that employ people. Why would you want to penalize small business? I believe in lowering the tax rates to expand the tax base.
Many Republicans, from House Speaker John Boehner down, have opened the door to some new revenue through reforms to the tax code. Minnesota’s Republicans, however, are divided on going down that path.
Kline: The majority of the conference, the Republican conference, has agreed to increase revenues in conjunction with some reform of the tax code that would keep rates down and close loopholes or limit deductions. … We’ve moved, markedly, in the direction of raising revenues. The speaker has talked about $400 [billion], $500 billion in revenue in reforming the tax code and limiting deductions and closing loopholes.
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Paulsen: It’s important to note that you can’t only cut spending, you’ve got to bring in more revenue. And my idea of bringing more revenue is through economic growth and pro-growth policies. And it’s not getting into fights over marginal rates and those kinds of things that I think end up being distractions. The real issue is, what can we do to reform the tax code, to bring in more revenue and pro-growth policies and we can absolutely do that without raising taxes. Eliminating loopholes, deductions and things to make the tax code a lot simpler, a lot more competitive. That’s the direction that I think we need to do.
Bachmann: We simply cannot demand more money from taxpayers without changing the way Washington spends money. Reckless spending — and the moral question of what type of future we will leave our children and grandchildren — is the larger issue we face, and that’s where the conversation should be primarily focused.
Cravaack: Until I see a solid proposal from the Democrats regarding identified spending cuts, then I’m not willing to talk about revenue. … Then we can talk about revenue that doesn’t hurt the economy.
All four Minnesotans have taken the Americans For Reform pledge to oppose any attempt to raise taxes. The pledge has become somewhat controversial among Republicans now grappling with a deficit crisis. To varying degrees, the Minnesota delegation said the pledge is essentially an expression of their opinion on taxes, but not necessarily something to guide them during this fiscal cliff debate.
Paulsen: I think those that have signed the pledge would acknowledge very directly that it absolutely allows members to support tax reform. And that, again, is the ultimate goal that we want to get to. I think it’s just really important to keep an open mind, from the perspective of, what do we do to help revamp the tax system, the tax system to keep up with a modern economy. I think every member would interpret it that way.
Kline: The pledge is not to raise taxes … but virtually everyone who signed it did not look at it as precluding us from getting real tax reform. In fact, Grover Norquist is for real tax reform. I’ve run on that issue, I’ve campaigned on it, I’ve voted for it, a flatter, simpler, fairer tax or the fair tax, a national consumption tax. Real tax reform. I think that everybody who signed that pledge would say that’s their understanding of what that means.
Cravaack: It’s a sidebar. What are we concentrating on this for? Is it going to create any solution to the problems that we have now? Let’s focus on what’s important. Let’s get our economy back on track, let’s get people back to work. Let’s make sure we have a solid military, those are the things that are important.
Republicans have looked to publicly pressure Democrats into discussing the spending side of the equation while they grapple with the taxation side. Their opinion — both in the party as a whole and in the Minnesota delegation — is nearly unanimous: entitlement cuts, and reforms along the lines of those in the House GOP budget, must be on the table.
Kline: We have proposed those ideas. There are some things you could do: in Medicare, for example, we talked about using some means testing, switching, for younger people, to an option of premium support so you could bring competition into it. If they don’t like that proposal, fine, give us another proposal.
Cravaack: You have to address the elephant in the room, and those are Social Security, Medicare and Medicaid. You have to talk about those and how you’re going to reform the system. Medicare is insolvent in 2020. It’s going broke.
Paulsen: The president himself has said that health care and Medicare and entitlement programs are the drivers of debt. So he should really, to have a balanced approach, he should be coming forward as well with proposals. … The House moved forward, even on premium support and Medicare. That may not be the final answer, but put something on the table. The president needs to come forward with what he wants to do, and I think that’s what Republicans are saying.
The four are also split on how to go forward with defense spending — all oppose the $600 billion in automatic defense cuts scheduled to kick in at the end of the year, but they disagree on the extent to which it should be a part of a deficit deal.
Kline: We cut defense spending this last year in the budget window by close to $500 billion. So it’s already there. What we’re faced with now, with sequestration, is an additional $500 billion in cuts that are just across the board. They are what you might think of as mindless cuts. And that’s just disastrous. … We can’t have that happen. If you want to talk about cutting wasteful spending in defense, fine, let’s identify some of that. That’s a different issue than this mindless whacking at every single program in the department of defense.
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Paulsen: The sequester’s not done in a very thoughtful or strategic way. It’s across the board and it’s not targeted toward inefficiency. So that’s why we should be focused to help areas of defense, but defense absolutely should be on the table.
Bachmann: Cuts to every federal department should be under consideration, but it must be done in a serious, responsible way. Sequestration, on the other hand, which I voted against, irresponsibly hacks at important programs.
Cravaack: Defense is always on the table, but take a look around. Look what’s happening in the Middle East right now. Look what’s happening in the South China Sea right now with China. Do you really think it’s a good time to cut spending for the military? I personally don’t.
The delegation said it was too soon to say if they would support new revenue in exchange for the entitlement reforms they’re calling for.
Kline: The Democrats have offered nothing about addressing the big drivers of spending, and that’s entitlement spending. Let’s hear something from them. They just insist on raising taxes on family businesses, and we think that’s just a terrible idea.
Paulsen: We need to know what spending cuts the administration is going to propose, and make sure they’re real, that they’re not phony numbers. … It’s just really important, if we’re going to fix the health of the economy and give confidence to investors and employers to hire people, we’ve got to make sure we don’t have Washington funny numbers.
Cravaack: Show me a plan. Right now there is no plan. … It’s just common sense. It’s the same common sense that I use when I open my checkbook. The same common sense families use when they budget for their families. The same common sense needs to be applied to the federal government.