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Politico - House GOP: No New Tax Bills

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By Jake Sherman

You've heard of the do-nothing Congress?

House Republicans are now trying to wield the term to their political advantage, intentionally postponing passage of any tax bills until the party decides whether to reform the Tax Code. That includes repealing the tax on medical devices touted by Majority Leader Eric Cantor (R-Va.) in a high-profile policy speech last week. In fact, the House hasn't passed a single measure this Congress that either raises or cuts revenue.

But the no-new-tax-bills strategy also has another effect: It will stop the Senate from raising revenue as part of any plan to replace the sequester.

Since all revenue bills need to originate in the House, the strategy will effectively halt Senate Democrats from raising revenue in a deal to blunt the sequester. If the Senate passes a bill to increase taxes on millionaires as part of a sequester replacement plan, for example, the House cannot take up the legislation.

This under-the-radar House GOP plan is the latest weapon in the sequester wars as the massive cuts will take effect early March with the billions of dollars in cuts to the Pentagon and government agencies. Despite the growing urgency, neither side appears any closer to compromise -- Republicans are refusing to budge on raising revenue, while Senate Democrats and the White House are insisting on it.

"The bottom line is we want tax reform, but we want to plug those loopholes that the president talks about, to bring down tax rates because we believe that's pro-growth and we can get [the] economy growing again, let people who earn the money keep more of it," Cantor said Sunday on NBC's "Meet the Press." "The president's not talking about that. He's talking about raising more taxes to spend."

"The fact is we've had plenty of spending cuts -- $1.6 trillion in the Budget Control Act. What we need is growth," House Minority Leader Nancy Pelosi said during an interview on "Fox News Sunday."

"We have made the cut in terms of agriculture subsidies; there are tens of billions of cuts there," she add. "That should be balanced for eliminating subsidies for Big Oil. It isn't as much as spending problem as it is a priorities."

Revenue isn't the only divide. The GOP desire to replace the sequester by changing government entitlements like Medicare is a nonstarter with Democrats.

"Don't you think … you ought to see if raising the [Medicare retirement] age really does save money?" Pelosi said Sunday. "Those people are not going to evaporate from the face of the Earth for two years. They're going to have medical needs, and they're going to have to be attended to."

Republican leaders are bracing for more upheaval when the sequester hits. Defense hawks are expected to want to replace the cuts -- a debate that is sure to take up much of the next two years.

Between now and the start of March, GOP leadership doesn't have plans to pass another sequester replacement bill. Some in House leadership are concerned conservatives will demand those cuts on top of the sequester, and moderates are wary of more votes over slashing government programs. Lawmakers are tired of passing the same legislation repeatedly.

"We've sent things over to the Senate since last May, and it's been ignored," Oklahoma Rep. James Lankford, chairman of the Subcommittee on Technology, Information Policy, Intergovernmental Relations and Procurement Reform, said in an interview. "Is it worth it to keep driving that back home again or just continue to say, "We need to come to agreement, what can the Senate pass?'"

Delaying the cuts is an option that doesn't have a lot of fans in Republican leadership.

The House GOP is also trying to avoid a late-hour government shutdown drama over a continuing resolution by passing a funding bill this month, well ahead of March 27, when money actually runs dry, according to several top-level aides. The bill is going to adhere to the sequester-mandated level of spending: $974 billion in discretionary spending. The legislation might also include specific language to ensure that the Obama administration cannot bypass the automatic spending cuts by executive order or other measures.

House Republicans want to move before the Senate can pen its own government-funding bill, which they think might set spending at a higher level.

Instead of pushing its own priorities, GOP leadership is turning to its members to craft an agenda. Beginning this week, GOP Conference Chairwoman Cathy McMorris Rodgers of Washington state and Lankford are gathering lawmakers to craft ideas in three areas: economic growth and jobs, supporting American families and upholding American values.

All of this planning is centered around one calculation: The sequester will take effect. Aides to Speaker John Boehner (R-Ohio), Cantor and Majority Whip Kevin McCarthy (R-Calif.) want to avoid the harsh cuts but aren't hopeful they'll be able to succeed.

Republicans think the political environment has shifted in their favor: They think they have the upper hand in the sequester fight. They don't have to pass anything, and the cuts will take effect. They are guided, in part, by a new mantra: Pick smart fights, and keep expectations low.

The White House is hoping Republicans bend and will accept revenue to head off the cuts.

A recent poll by The Tarrance Group, commissioned by the center-right American Action Forum, shows that the public agrees with House Republicans. Fifty-two percent of respondents in the poll think a future debt deal should not include tax increases.

Republicans succeeded in defusing one battle with their united approach to raising the debt ceiling last month. They voted to delay that decision until May as long as the Senate approved a budget or members wouldn't get paid. Senators passed the House GOP plan, which was signed by Obama, and now plan to submit their own budget by April 15.

The party isn't totally out of the woods. Republican leaders estimate that the debt ceiling will need to be raised in August -- far later than they had thought. So the party will spend the first eight months of 2013 fighting over deficits, debts and the nation's fiscal health.


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