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09.15.11

Boehner Says No Again

The House speaker is softening his tone on Obama’s jobs bill, but Patricia Murphy says the two sides are dug in–and that the enthusiasm for tax reform is a non-starter.

After House Speaker John Boehner gave a jobs speech Thursday, he shared a piece of information that could provide a sliver of hope that Congress might get something done this year.

In addition to his familiar litany—a business-friendly platform of cutting taxes, unwinding regulations, and enacting comprehensive tax reform—Boehner explained that as a kid working in his father’s bar, he learned long ago “how to deal with every jackass that walks in the door.”

Boehner will get to deal with jackasses aplenty in the coming weeks as Congress and its supercommittee wrestle with how to close the country’s gaping budget gap and jobs crisis, all without increasing taxes, which Republicans won’t consider, or making drastic changes to Medicare and Medicaid, which most Democrats say is verboten. And even some conciliatory words from the Ohio Republican, who has softened his tone since the debt-ceiling crisis, may not amount to much.

Despite—or perhaps because of—President Obama’s call this week to raise taxes on families making more than $250,000 a year to pay for his jobs package, Boehner told the Washington Economic Club once again that his party won’t go along with the president on the issue, now or ever. 

“Tax increases I think are off the table and I don’t think they are a viable option for the joint committee,” Boehner said. “It’s a very simple equation. Tax increases destroy jobs.”

The speaker also told tales of “regulatory onslaught” from a federal government run completely amok, which left American companies spending time and money defending themselves in court against the feds instead of growing their businesses and creating jobs.

Beyond the well-known GOP arguments for cutting taxes and regulations, Boehner also told the group he sees overhauling entitlements as “critically important” to bringing down the deficit and returned to the idea of a comprehensive overhaul of the tax code—one of the few concepts that has reached critical mass on Capitol Hill among Democrats and Republicans and gives even the most cynical congressional watchers hope that agreement between the two parties is not only possible, but likely. 

But the glaring problem with tax reform, of course, is that it doesn’t solve the immediate problem facing Congress today. 

Although the House and Senate need to slash $1.5 trillion from the budget by the end of November or accept deep cuts to defense and social programs, senior congressional staffers estimate that significant tax reform would take years to enact. 

Look no further for proof than the 1986 tax reform act, which Congress passed nearly two years after Ronald Reagan called for such reform in his 1984 State of the Union address.

“This group can’t do tax reform. They just can’t,” a senior Senate staffer said of the supercommittee. “And are you going to do tax reform in an election year? This is just the beginning.”

The second obstacle to tax reform will be the clash between Democrats’ desire to raise taxes through the reform process and Republicans’ insistence that, like the 1986 bill, the changes close loopholes, lower rates and simplify today’s mind-numbingly complicated tax policies—but not raise new revenue, which they argue would be a tax increase. 

Just before Boehner’s speech Thursday, Minority Leader Nancy Pelosi asked what the point of tax reform would be if it did not also raise badly needed revenue to lower the deficit.

“You can’t just say we’re going to have reforms that would lower the corporate rate, which I would fully support, unless you have enough reform to reduce the deficit, too,” Pelosi said.

Michigan Sen. Carl Levin, a high-profile Democratic proponent of tax reform, added on the Senate floor, “Real deficit reduction means revenues plus spending cuts. Those resisting additional revenues need to do the math.”

The glaring problem with tax reform, of course, is that it doesn’t solve the immediate problem facing Congress today.

Without agreement on taxes, regulations, or the right way to do tax reform, Boehner ended the day where he began it, with a critical need to find compromise between his emboldened conservative caucus and a president who, in the face of ballooning deficits, has just proposed new spending and tax increases—despite the GOP’s well-documented aversion to both.

Boehner predicted to Bloomberg News that Congress will indeed come to a compromise on the $1.5 billion cuts in the next six weeks, if only because of “the firewall” of unsavory cuts to defense and social programs that Hill negotiators baked into the cake that they all have to eat before the end of the year.

And if the firewalls don’t work, Boehner can always rely on the sweeping, mopping, and jackass management techniques he picked up in his dad’s bar decades ago.

“Trust me,” he said, “I need all of those skills to do my job.”