Idaho's Crapo: Spending is the problem, tax reform needed

McClatchy NewspapersApril 14, 2011 

WASHINGTON — As President Barack Obama spoke Wednesday about how to address the nation’s debt crisis, Sen. Mike Crapo was listening carefully.

The Idaho Republican last year sat on the president’s National Commission on Fiscal Responsibility and Reform, which released a plan that cuts $4 trillion from budget deficits over the next 10 years, in an effort to pare down the $13.8 trillion federal debt.

The plan didn’t get enough support from the panel for Congress to take a vote on it, but that hasn’t stopped six of its members — including Crapo — from working on deficit-reducing legislation.

They include Republicans Tom Coburn of Oklahoma and Saxby Chambliss of Georgia, and Democrats Richard Durbin of Illinois, Kent Conrad of North Dakota and Mark Warner of Virginia.

The Gang of Six hasn’t yet met with the president, Crapo said, but they’ve made good progress with each other. He spoke about his role in the Gang of Six negotiations, and what he thinks of the president’s leadership on spending cuts. The interview has been edited for brevity and clarity.

Q: How often are you meeting? What has been the easiest thing to agree on? The most difficult?

A: We meet regularly and often. We just work through the issues. We discuss them whatever the specific issues are.

If we put out pieces of the agreement before there is an agreement, then those pieces will just be picked apart in the atmosphere in which we’re living. All six of us are pretty solidly taking the position that we won’t discuss the details of our negotiations.

We don’t have a timeframe. And the reason for that is we don’t know if we’ll be able to reach a final agreement — if we can.

Q: House Speaker John Boehner, R-Ohio, said that “tax increases are unacceptable and are a nonstarter.” Where are you on a plan that will include spending cuts but is also likely to include a rewrite of the tax code in a way that some people could pay more in taxes?

A: I believe very strongly that the problem is spending, not taxes. I believe that is where the focus needs to be. I believe that we must reform our tax code, and that by doing so we can generate significant increase in revenue without raising tax rates. In fact, that is one of the things the fiscal commission plan did. It dramatically reduced tax rates, and dramatically reformed the income tax code in ways that I think would reduce the tax burden of a majority of Americans. And yet still will strengthen and grow the economy by broadening the base and reforming the tax code.

Q: There’s been some criticism from anti-tax advocates such as Grover Norquist, who say they still consider that a tax increase.

A: I’m aware of that, and I disagree. I think that the preferred approach is that we should have tax reform and we should reduce tax rates in return for reducing deductions and credits. And that kind of reform would be extremely strong in terms of stimulating the economy and generating greater tax revenues.

I think the vast majority of economists would very quickly agree that the kind of tax reform we’re talking about here would have a huge impact on economic growth in our country. By growing the economy, we grow the revenue that’s available for reducing the national debt.

Q: Do you see what you’re doing as a separate path from what the House is doing, and the Ryan budget proposal?

A: It’s all the same issue — the issue is our debt crisis. And it’s different approaches to dealing with the issue. I don’t see that one is mutually exclusive of the other. To reach agreement on a deal and to pass it into law would result in a $4 trillion reduction of our national debt over 10 years and would dramatically reduce our debt posture. But it would not be the final action that we would need to take.

And so the other proposals out there are all still very relevant. I see them all as different ideas and ways to approach trying to resolve the issue. What I think is one of the strong points of our approach is that it involves bipartisan negotiations. And the whole purpose of it was to try to achieve a bipartisan solution that could get 60 votes in the U.S. Senate.

Q: Do you think in this climate, with the influence of the tea party and GOP strength in the House, that reform from the center — radiating out — can work? Rather than, say, negotiating from the fringes of parties to the center?

A: I think it has a very good chance of working. In fact it probably has a better chance of working than the other approach. We have split control in the two parties. For a solution to work it will have to get 60 votes in the U.S. Senate and a signature of the president.

Because of that, I think the most likely outcome is to get past the gridlock that we have seen for most of the last decade, and to build common-sense, bipartisan solutions, that’s the core strength of what we’ve been trying to do. We haven’t got a final deal yet, but we’re making progress.

Q: There’s been some criticism of the president in recent days, saying his negotiating style is weak, and that he has been slow to embrace the fiscal commission’s recommendations as his blueprint for attacking the deficit?

A: I tend to agree. I’ve said many times, that (of) the fiscal commission, which was appointed by the president and made its report in December, to date with the exception of a few relatively minor particulars, the president has yet to even indicate he would support any of it in its entirely or any of its parts. I think that we need presidential leadership. The president to this point has simply been absent from the debate.

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