Sen. Graham: Republicans Should Accept Tax Revenue Increase

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July 13, 2011 4:59 AM

ABC News' Jonathan Karl and Gregory Simmons report:

As Congress and the president try to strike a deal to cut spending and raise the debt ceiling, one Republican Senator tells ABC News that prospects look bleak.

“Right now I’m very worried,” Senator Lindsey Graham (R-S.C.) told ABC News “Subway Series.” “If I were a betting man, I’d bet no [deal].”

Senator Graham said Republicans should be willing to accept a deal that curbs entitlement spending and increases tax revenues by closing loopholes. 

“To me, that makes sense,” he said. “That way you don't raise tax rates, but you do generate new revenue by closing loopholes. You're giving money away to a few people at the expense of many, and I think it's time to reevaluate that.”

The obvious solution, Graham said, is for Republicans to give some ground on taxes and for Democrats to give some ground on entitlements. But he doubts negotiators will get there before August 2nd.

“How to get there from here?” Graham said. “President says he’s not going to do a short term extension. [Republicans] are saying we aren’t going to generate any new revenue. [Democrats] are saying they aren’t going to do it without revenue. Well, somebody’s got to blink.”

Graham may be right. Even as the Congressional leaders met Tuesday at the White House, key players in both parties said the debt ceiling talks had reached an impasse over irreconcilable differences on both taxes and spending.

One top Democratic aide predicted it will take a market crash or near-crash to break the impasse, while a top Republican aide said, “It’s even doomier and gloomier than you think.”

Graham said closing tax loopholes and eliminating almost all deductions could both lower tax rates and generate significant revenue to reduce annual deficits.

“You're giving money away to a few people at the expense of many, and I think it's time to reevaluate that,” Graham said. “If you did away with all deductions and exemptions except charitable giving and the mortgage interest, that's $1.2 trillion that's spent every year.”

http://blogs.abcnews.com/thenote/2011/07/republican-senator-warns-of-a-disaster-if-congress-cant-find-middle-ground-on-debt-ceiling-.html

[Ban Hammer 13,401]

here's a stunning idea for washington:

increase taxes, cut spending......

[mawilson 2,133]

here's a stunning idea for washington:

increase taxes, cut spending......

Here's a better idea.

Cut spending.

Do not increase taxes. Find other ways to get more revenue (close loopholes, introduce sneaky fees, etc).

[웃 910]

Here's a better idea.

Cut spending.

Do not increase taxes. Find other ways to get more revenue (close loopholes, introduce sneaky fees, etc).

Here's a better idea. Merge the USPS and US Military. Any income over $20,000,000 is taxed at 70% (the rich bastards can keep $300,000 of every $1,000,000 they make after $20,000,000)!

Increase retirement age to 80 (is there something wrong with your feet between 65-79?).

[mawilson 2,133]

Merge the USPS and US Military.

You've got mail. Now you die!

[luckytxn 2,264]

Roll back the Federal government to what it was 10 years ago. Then we can abolish the IRS totally. Then bring all troops home worldwide NOW. The savings there can pay down the deficit in the foreseeable future. Go to every chairman of the Federal reserve and kick them in the ballz until they cry. Tell them they are fired afterwards while they are rolling on the ground crying.

[웃 910]

Use the 2 million inmates currently incarcerated as cheap labor. Give them 8 an hour (8 CENTS!)

[scandal 951]

“Right now I’m very worried,” Senator Lindsey Graham (R-S.C.) told ABC News “Subway Series.” “If I were a betting man, I’d bet no [deal].”

I'm getting worried too. The news from Washington is not good, not good at all.

The markets however remain 100% convinced there will be a deal. They've obviously got more confidence than Moodys at the moment. Bond traders are simply not blinking in the face of the political rock-and-a-hard-place in DC.

The 30 year benchmark is yielding 4.17% -- the yield is actually down a bit over the past week as the political fireworks escalated. The bond (CUSIP 912810QQ4) is trading at a premium to par right now - $103.40 (par is 4.375% yield). If there was even a glimmer of doubt about a debt ceiling deal, it would be yielding north of 6%, 7%, 8% ... and selling at a substantial discount to par. If we actually default, I shudder to think what it's going to yield.

[웃 910]

I'm getting worried too. The news from Washington is not good, not good at all.

The markets however remain 100% convinced there will be a deal. They've obviously got more confidence than Moodys at the moment. Bond traders are simply not blinking in the face of the political rock-and-a-hard-place in DC.

The 30 year benchmark is yielding 4.17% -- the yield is actually down a bit over the past week as the political fireworks escalated. The bond (CUSIP 912810QQ4) is trading at a premium to par right now - $103.40 (par is 4.375% yield). If there was even a glimmer of doubt about a debt ceiling deal, it would be yielding north of 6%, 7%, 8% ... and selling at a substantial discount to par. If we actually default, I shudder to think what it's going to yield.

I think you are thinking about it too hard! Don't forget who our leader is! He will make a way out of no way!

[mawilson 2,133]

Don't forget who our leader is!

John Boehner?

[Mr. Big Dog 10,747]

John Boehner?

Couldn't be John Boehner. He's weak.

[I AM NOT THAT GUY 5,715]

Senator Graham said Republicans should be willing to accept a deal that curbs entitlement spending and increases tax revenues by closing loopholes.

They probably would, if that was all the Democrats were asking for.

[^_^ 5,021]

They probably would, if that was all the Democrats were asking for.

Many GOP reps are against any increase in revenue.

[I AM NOT THAT GUY 5,715]

Many GOP reps are against any increase in revenue.

It's a game of semantics. Tightening the tax code is not the same as changing the marginal rates. You might find bipartisan support for removing tax subsidies across the board, as well as find dug-in resistance from the usual players on both sides of the isle.

[Mr. Big Dog 10,747]

They probably would, if that was all the Democrats were asking for.

No, they won't. They answer to Grover Norquist and Grover said NO to anything that enhances revenues - including closing tax loopholes.