Rep. Hensarling Can't Explain Why Republicans Won't Vote for Middle Class Tax Cuts
From this Wednesday's Starting Point, Republicans aren't doing a very good job defending themselves for wanting to keep most Americans and our economy hostage to retain those tax cuts for the richest among us: GOP Rep. Has No Answer For Why Republicans Won’t Vote For Middle-Class Tax Cuts:
Rep. Jeb Hensarling (R-TX), the incoming chairman of the House Financial Services Committee, could not explain during an interview on Wednesday why House Republicans are holding middle- and low-income tax cuts hostage to the cuts for the wealthiest Americans in the fiscal cliff showdown. When pressed by CNN’s Soledad O’Brien, Hensarling first cited complaints about spending, but when O’Brien asked why he couldn’t set spending levels aside and compromise on taxes first, he had nothing but unrelated talking points: [...]
Hensarling’s invocation of Speaker John Boehner’s (R-OH) proposal is not only not an answer to O’Brien’s question — as it doesn’t explain what’s wrong with the simple solution O’Brien poses — but it’s also not anything close to balanced. While Boehner’s plan contains an array of draconian spending cuts, it doesn’t propose any actual increased revenue, relying instead on the same voodoo as the Romney tax plan.
As Zack noted, his analysis on the electoral math is also wrong and irrelevant.
Full transcript below the fold.
O'BRIEN: Let's turn to Texas Republican Congressman Jeb Hensarling. He's the newly named chairman of the House Financial Services Committee, also co-chair of the super committee on deficit reduction.
Nice to have you with us, sir.
You know, we heard Will a moment ago saying, how do you salvage a political victory? Because the reality is if nothing is done, if you cannot get together, you go over the fiscal cliff and taxes go up for everybody, correct?
REP. JEB HENSARLING (R), TEXAS: Well, the president is going to get his revenue one way or the other. House Republicans will do everything we can to minimize the damage to our economy. We know that by raising the rates on the top two brackets, as the president wants to do, Ernst & Young says will cause middle income workers at least 2 percent off their paychecks, lose another 700,000 jobs. That's not something Republicans are going to be part of.
But the president obviously is going to get some revenue. There's nothing we can do to stop that. It's written into current law. But the bottom line is that you can't solve this problem through revenue.
And the president is not being serious. He is moving the goal post. He started out saying he wanted a, quote/unquote, "balanced approach".
So, the president is going to get some kind of revenue. I'm not voting for it, but he's going to get it anyway.
HENSARLING: The question is where are his spending deductions? He has to put that on the table.
O'BRIEN: You could avoid going off -- if we know, no matter what, taxes are going to go up. At this point they could go off the cliff for everybody. So, what you could do, as I think it was Olympia Snowe was recommending, you could do a deal that doesn't let the taxes go up for the middle class, right, and then you can avoid the fiscal cliff, right?
HENSARLING: But, Soledad, again -- well, first, the fiscal cliff, relative to our nation's spending-driven debt crisis is a pothole. You've got 0.3 percent of all Americans that have million dollar incomes. This is a shell game. You can't tax your way out of this problem.
I mean, you have revenues that are about the same levels they were five or six years ago, when deficits were running about $100 billion, $150 billion. Now we know deficits are running $1 trillion to $1.5 trillion.
O'BRIEN: I get you on that.
HENSARLING: What's changed is on the spending side and yet all this discussion is on the tax revenues. You can't get there. You can tax every millionaire 100 percent and run the government for two or three months.
O'BRIEN: I'm not sure --
HENSARLING: This is a spending-driven crisis and it has to be solved on the spending side. Until the president gets serious about it, I'm not sure what there is to talk about, Soledad.
O'BRIEN: I'm not sure that the only conversations have just been on the tax side. I actually think there have been conversations on both.
But, at this moment, right, again, we're going over or toward the fiscal cliff. If you do nothing, all of our taxes are going up. So, why not, as a first move, say -- listen, nobody at this point wants to raise taxes on the middle class and people who are lower income. So let's do some kind of a deal now and that will keep us from going over the fiscal cliff?
And then you can let the tax cuts expire for the wealthy January 1st. It happens. And you can do some kind of negotiation. I mean, and that keeps us from going over the fiscal cliff. It's going to happen anyway, right?
HENSARLING: This is the very kind of shell game they run in Washington. If you'll just give me my tax increases today, I surely will give you your spending restraint tomorrow, you know?
O'BRIEN: But you have no leverage in the debate.
HENSARLING: It's sort of like Wimpy on the old "Popeye" cartoon. We never see these spending reductions materialize. That's the problem.
And, right now, we're borrowing roughly 40 cents on the dollar --
O'BRIEN: OK. So, then --
HENSARLING: -- much of it from the Chinese, sending the bill to our children and grandchildren. That's unwise and unsustainable. Frankly, I think it's immoral.
And what you're saying is that Republicans ought to agree, and somehow vote for a big proposed tax increase in hopes that in decades to come that this president will do something about spending.
O'BRIEN: No, I didn't say that. What I said was why not -- why don't Republicans and Democrats vote for a tax -- to keep the taxes lower for middle class and people at lower income and let the other ones expire? You could do that now. And we wouldn't go over the fiscal cliff.
HENSARLING: What the speaker has done --
O'BRIEN: Yes, go ahead. HENSARLING: What the speaker has done is exactly what the president claimed he wanted. The speaker has put on the table a balanced approach. The president previously said --
O'BRIEN: But it didn't include tax cut.
HENSARLING: -- I want to raise the top two rates for $800 billion worth of revenue and I want a balanced approach with roughly $3 of spending reduction for every $1 of tax revenue.
Now, he's got $5 of tax increase for every $1 of supposed spending reduction and he's doubled the size --
O'BRIEN: You can't be surprised --
HENSARLING: -- of the tax revenue.
O'BRIEN: But you can't be surprised that the president said no go to that with only a couple of hours, right? Because it did not increase taxes on the wealthiest of Americans, which he has consistently said.
HENSARLING: Well, Soledad, the president won 51-49. He's got an Electoral College victory. It's good enough to get him re-elected. But it's not enough to give him a mandate.
And the American people consciously, subconsciously, consciously voted for a divided government. And mandate of House Republican is equal to that of the president of the United States. And we're not going to go out and put 700,000 Americans on the unemployment lines. We're not going to take away wages from hard-working Americans, which is exactly what the president wants to do.
The president ought to remain good to his previous commitment and that is he wanted a balanced approach. Republicans are willing to negotiate in good faith. I think it's pretty obvious, particularly when the speaker puts on a plan put forth by Erskine Bowles, a Democrat in the first place.
O'BRIEN: Who, as you know, has backed away from that.
HENSARLING: One who was appointed -- one who was appointed -- well, get Mr. Bowles on. He was in front of the super committee. I saw him eye to eye when he put this proposal on the table.
O'BRIEN: But he put a statement yesterday, as you know, and he said the circumstances have changed.
HENSARLING: I know he was right in front of me as co-chairman of the super committee and he put it on the table. If he wants to take it off the table, so be it. But the fact of the matter is go and review the transcript. Go and review the tape. This was an Erskine Bowles proposal. Now, he may want to put it up for adoption, I don't know.
O'BRIEN: OK. Let me just clarify for a moment. He is not claiming he never presented it to you. What he's claiming is that circumstances now have changed is what he says in his statement that he has now released.
HENSARLING: Yes, the circumstances that have changed is that under President Obama, we have our $4 trillion deficit and it is spending- driven. And until the president puts any kind of spending reductions on the table, all this talk of tax increases -- you can give the president every job-harming tax increase he is asking for. And it's about 3 percent, maybe 4 percent of his 10-year spending bill.
Ultimately, middle income Americans are going to get socked with a tax increase beyond recognition unless we do something on the spending side. There's just so long you can play this shell game of trying to hide the true cost to government from middle income Americans. They're going to get socked with it.
Again, it's 0.3 percent Americans have million dollar incomes. The problem with the president's plan is sooner or later, you run out of millionaires. The math doesn't work.
O'BRIEN: Congressman Jeb Hensarling --
HENSARLING: The only way we can get there is with spending reductions to save our economy and to save the next generation from bankruptcy.
O'BRIEN: It's nice to have you talking with us this morning. We certainly appreciate it.
HENSARLING: Thank you.
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