GOP aides, however, said tax reform has emerged as the best option for House leaders determined to act early, avoid blame for another debt-limit crisis and associate the party with policies that help ordinary families.
The White House, meanwhile, insists that it will not negotiate over the debt limit. “Congressional Republicans have been presented a very common-sense compromise budget offer and have gotten the regular order process they have been asking for for years. Now the ball is in their court,” said an administration official, speaking on the condition of anonymity to discuss private talks. “The one thing that is nonnegotiable is the debt limit — no trading, no negotiating over paying the bills Congress has racked up. Earlier this year they passed on putting our nation at risk of default, and it’s incumbent upon them to do it again.”
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The House strategy is developing, and Camp said it is not clear how it might come together. Negotiations are underway between the House and Senate budget committee chairmen, Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.). If those talks become the forum for striking a budget deal and raising the debt limit, GOP aides said, Republicans could insist that a tax overhaul be put on the legislative fast track, with special protections from filibusters in the Senate. The debt limit might be raised for only a few months, with the promise of another increase when tax reform legislation passes the Senate.
Such an agreement, however, would require Republicans and Democrats to resolve the long-standing dispute over whether tax reform should generate fresh tax revenue to reduce deficits or whether it should lower tax rates. In a recent hearing on the Obama budget, Baucus suggested a compromise: Maybe, he said, tax reform should do both.
“We will close billions of dollars of loopholes. Some of this revenue should be used to cut taxes for America’s families and help our businesses create jobs, and some of the revenue raised in tax reform should also be used to reduce the deficit,” Baucus said. “It’s all about finding common ground.”