Originally Posted Online: Nov. 30, 2012, 5:43 pm
Last Updated: Nov. 30, 2012, 5:57 pm
Schilling willing to trade higher taxes for spending cuts to avoid fiscal cliff
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By Eric Timmons, email@example.com
U.S. Rep. Bobby Schilling, R-Colona, says he's prepared to support higher taxes on the richest Americans in order to pull the nation back from the fiscal cliff.
But he'll only do so if Democrats come to the table with immediate and serious spending cuts, he said in an interview Friday.
Republican leaders so far have refused to back President Obama's offer to keep tax cuts in place for all income brackets except for marginal rates on the wealthiest two percent -- who make more than $250,000 a year.
"I'm willing to pay more taxes, and I'm not even in that category," Rep. Schilling said.
He lost the November election to Congresswoman-elect Cheri Bustos in a campaign in which she campaigned on raising taxes on the wealthiest, which he opposed during the campaign. Ms. Bustos will be sworn in next month.
The Congressional Budget Office has predicted that the combination of spending cuts and tax increases known as the fiscal cliff that will take effect Jan. 1 would cause the economy to contract by 1.3 percent in the first half of 2013.
The income tax cuts first instituted under President George W. Bush are set to expire at the end of the year, driving up taxes for everyone. The end of a payroll tax "holiday" will also add to the hike.
Republicans, including House Speaker John Boehner, generally say the tax break should be extended for everyone, including those who make more than $250,000 a year. But Rep. Schilling said he was ready to compromise.
"If there are spending cuts along with tax increases I'll definitely take a look at it," he said.
The spending cuts would have to be implemented straight away, Rep. Schilling added, because he doesn't trust Democrats to cut spending down the road.
"Let's say we do the tax increases on the wealthy," he said. "Does that fix the problem? It doesn't because we'd still have a trillion dollar deficit. "
In addition to higher taxes, the fiscal cliff would result in automatic spending cuts included in the Budget Control Act of 2011. Neither side wanted the spending cuts, but they were enacted when a bipartisan committee failed to come up with a deficit reduction plan.
Half of the cutbacks of $109 billion a year from 2013 to 2021 would come from defense and half would be from nondefense spending. Social Security, Medicaid, federal pay and veterans benefits, would be exempt.
Rep. Schilling said any cutbacks to programs such as Medicare agreed to as part of a fiscal cliff compromise should not hurt current beneficiaries.
U.S. Rep. Dave Loebsack, D-Mount Vernon, said his priority was to avoid tax increases for the middle class while protecting Medicare and Social Security for current and future recipients.
"As Congress moves forward dealing with the impending fiscal cliff, Dave is committed to a balanced approach and ensuring that the budget is not balanced on the backs of our seniors or the middle class," a spokesman for Rep. Loebsack said.
Republicans have left the door open to raising revenue by closing loopholes in the tax code that benefit the wealthy, an idea Rep. Schilling also backs. But there's debate over which loopholes to close and whether doing so would raise as much revenue as increasing tax rates.
"I'd like to see some of the loopholes closed," Rep. Schilling said. "There's billions of dollars out there."