Republicans want debt panel to overhaul taxes

AP News
Posted: Oct 14, 2011 1:26 PM
Republicans want debt panel to overhaul taxes

Congress' debt reduction supercommittee should consider overhauling the tax code and revamping Social Security, Medicare and a host of programs for the poor, a group of Senate Republicans urged Friday.

In a letter to the special panel, Finance Committee Republicans laid out an ambitious agenda of tackling some of the most complicated, contentious issues and some of the most staunchly defended programs that lawmakers ever handle. It is unclear whether the bipartisan supercommittee, which has until Nov. 23 to recommend at least $1.2 trillion in debt reduction, will have the time or unity necessary to address the proposals head-on.

The GOP senators said that while a tax overhaul should lower rates and eliminate loopholes, it should end up yielding no additional revenue. Democrats want to raise taxes, particularly on the rich, as a way of finding budget savings.

The suggestions brought forth by Republicans included lowering the top personal and corporate income tax rates from 35 percent to 25 percent and halting taxation of money that U.S. companies earn abroad.

They also wrote that the supercommittee should consider gradually raising the Medicare eligibility age from 65 to an unspecified level; giving states more flexibility in deciding how to spend federal funds for Medicaid, the health care program for the poor; and combining social services, child care and other welfare initiatives into a single program. They also recommended repealing President Barack Obama's health care overhaul.

"Our nation faces a historic spending crisis," the letter said. "That crisis must be met with appropriate changes to existing spending programs."

The letter was signed by every Republican on the Finance panel except for moderate Sen. Olympia Snowe of Maine and Jon Kyl of Arizona, a member of the supercommittee. The top Republican on the Finance Committee is Utah's Orrin Hatch. Both are seeking re-election next year.