House Majority Leader Eric Cantor told reporters today that there may be some wiggle room in the debt-ceiling negotiations when it comes to closing tax loopholes. "If the president wants to talk loopholes, we'll be glad to talk loopholes," he explained. "We've said all along that preferences in the code aren't something that helps economic growth."
But he added that any loophole closure must be joined by offsetting tax cuts -- which Democrats could find unacceptable. (The reason: Adding further tax cuts to the mix doesn't end up reducing the deficit.)
"Increasing revenues paid by businesses and families, in this kind of economy especially, is counterintuitive," Cantor said. "Any discussion of loopholes must be accompanied by off-setting tax cuts. We are not for increasing revenue."
Cantor's comments came before Thursday's White House meeting with congressional leaders from both parties. President Obama has continued to call for a deal that includes an increase in revenues, while House Republicans have repeatedly said that new revenues would not pass the House.
Cantor claimed that a "blueprint" achieved during last month’s Biden talks could help guide negotiations in tomorrow's negotiations, claiming that based on the blueprint's framework he could "envision us proposing and accomplishing over $2 trillion dollars in savings." Cantor left those talks after Democrats in both the House and Senate continued to include revenue hikes in a prospective deal.
Cantor also shot back at Obama's claim that tax loopholes for such things as corporate jets were the reason why he left the Biden talks. "To hear the president come forward and indicate that those talks stopped or blew up over loopholes, it's just not the case," Cantor explained.
According to both Democratic and Republican aides familiar with the Biden talks, closing the corporate jet tax loophole would save about $3 billion dollars over 10 years. "In the context of over $2 trillion dollars in savings that the Biden talks could envision," Cantor said, "it's just not serious to say that we Republicans walked out over corporate jet loopholes."
The $2 trillion dollar number, according to Cantor, breaks down to this: "In the non-health care mandatory area, there is a potential for over $300 billion in savings; in the health care mandatory area, well over $400 billion in savings. The rest would be the discretionary piece plus interest savings," he says. "That is the basis upon which I believe we can build a deal that can deliver on the promise that we are going to finally start to change things around here."
The goal is to find a total of $2.4 trillion dollars in cuts by Aug. 2 to counteract a raise in the debt ceiling that would bring the United States past 2012, something that Cantor says he is doing reluctantly. "None of us feel we were elected to increase the nation's credit limit," he admitted.