November 29, 2012

N.C. congressional delegation will compromise to avoid fiscal cliff

Members of the N.C. congressional delegation say they’re ready to compromise on some hardened positions to reach a deal that would prevent the country from plunging over the “fiscal cliff.”

Members of the N.C. congressional delegation say they’re ready to compromise on some hardened positions to reach a deal that would prevent the country from plunging over the “fiscal cliff.”

Failing to reach an agreement by the end of the year would trigger tax hikes and massive cuts in spending on federal programs.

N.C. Rep. Howard Coble is the latest Republican who says he’s willing to buck one of the party’s sacrosanct pledges to not raise taxes.

For over two decades, conservative activist Grover Norquist has been getting GOP members of Congress to sign his Americas for Tax Reform pledge. It puts them on record as opposing any tax increases. That includes eliminating deductions.

“I’m not enthusiastic about it (the possibility of a tax increase),” says Coble, a longtime congressman from Greensboro who signed the pledge around 1986 during his second term. “But I don’t think anything should be off the table. Just because I advocate for that, I may or may not vote for it. But that would depend on what is finally handed to us.”

Coble joins Sens. Lindsey Graham, R-S.C., Saxby Chambliss, R-Ga, and Rep. Peter King, R-NY, who have all said they’re willing to accept new ways to increase tax revenues in order to help prevent the fiscal crisis.

Democrats like Rep. Mel Watt of Charlotte and G.K. Butterfield of Wilson said they’re open to reforming entitlements, including limiting Medicare benefits for wealthy Americans.

“Seniors try to make you think that you will never change anything about Medicare,” Watt said. “I just think in order to save the program for middle income and poor people you might have to make substantial concessions.”

Interviews with eight of the 15 Republican and Democratic members of the N.C. congressional delegation indicate that they are willing to negotiate on taxes and entitlement programs, including Social Security, Medicare and Medicaid. But they acknowledge negotiations will not be easy with politicians striving to maintain their favored federal programs or tax cuts.

Going over the fiscal cliff could have devastating impacts. An N.C. family of four earning the state’s median income of $63,700 could see its income taxes rise $2,200, according to the White House. The President’s Council of Economic Advisers estimates that consumers in North Carolina would likely spend nearly $5.8 billion less in 2013.

Sen. Kay Hagan, a Greensboro Democrat, said the problems have been studied multiple times, but now Democrats and Republicans must demonstrate the will to come to an agreement.

“If we don’t act, every single family is going to see a tax increase and we have to prevent that,” Hagan said. The automatic cuts to the Defense Department alone would have “devastating” impacts on the state’s large military presence, she said.

Other members like retiring Democratic Rep. Brad Miller of Raleigh question whether a compromise can be reached by the end of the year. He questioned the Republicans’ willingness to reform taxes and doubts Republican House leadership can convince the more hard-line tea party wing to accept any form of legitimate tax reform.

Every current Republican member of the N.C. delegation has signed the Americans for Tax Reform pledge, including newcomers Reps.-elect Richard Hudson of Concord, Robert Pittenger of Charlotte, George Holding of Raleigh and Mark Meadows of Jackson County.

Rep. Virginia Foxx of Banner Elk says the discussion should focus not on increasing tax rates, but instead on cutting spending. As secretary of the House Republican Conference, Foxx has been involved in strategy sessions with House Speaker John Boehner and House Majority Leader Eric Cantor.

Asked if she felt beholden to the Americans For Tax Reform tax pledge, she answered that she felt beholden to cutting spending and not creating any new burdens on the American people.

Several North Carolina Republicans who signed the pledge, including Rep. Patrick McHenry of Cherryville and Renee Ellmers of Dunn, declined to discuss the fiscal cliff as discussions continue. Sen. Richard Burr, a Winston-Salem Republican, also wouldn’t comment. Other representatives, including Reps. Sue Myrick of Charlotte and Larry Kissell of Biscoe, didn’t return calls requesting interviews.

Butterfield and Watt said they don’t see how lawmakers can solve the country’s money problems without raising tax rates on the rich.

Democratic Rep. David Price of Chapel Hill favors a plan that includes a balance of tax increases and spending cuts. He’s open to additional reforms of entitlement programs. But he argues any deal should take into account concessions Democrats have already made on discretionary spending cuts proposed by the deficit-reduction plan co-authored by Charlotte’s Erskine Bowles, a Democrat, and former GOP Sen. Alan Simpson of Wyoming.

The 2010 Bowles-Simpson plan has been thrust into the spotlight again after failing to gain traction with Congress. It calls for reducing the federal debt by nearly $4 trillion through a three-to-one mix of spending cuts to tax revenue increases.

There could be some benefits to going over the fiscal cliff, according to retiring Democratic Rep. Brad Miller of Raleigh and a growing corps of liberal Democrats. Miller sees the Norquist tax pledge as preventing some Republican House members from compromising on taxes. Going over the cliff would trigger automatic tax increases. Then, in the new year, Republicans could vote to cut taxes but leave them at a higher rate for wealthy Americans – thus not violating their pledge.

“It bizarre reasoning that puts us in that position,” he said. “In a sane world, that really shouldn’t be a consideration. But we really don’t live with a sane Congress.”

Most of the North Carolina delegation will have little to do with the high stakes negotiations.

Watt said he wishes he was in the room cutting the deal. At some point, he and other members of the N.C. delegation will have to decide whether they can accept what agreements their leadership comes back with. Watt said he’s sure there will be some things that he won’t like, but he said that’s the nature of compromise.

“We have a history of kind of producing when our backs are against the wall,” Watt said. “Our backs are certainly against the wall at this point so it’s time for us to produce.”

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