Daily Tax Update - June 13, 2011: July 4th Target Date For Debt Limit Framework

JULY 4TH TARGET DATE FOR DEBT LIMIT FRAMEWORK: Congressional debt ceiling negotiators and Vice President Joe Biden are working toward a July 4th goal to have a framework in place for raising the debt ceiling.  August 2 is the deadline set by Treasury to raise the $14.3 trillion debt limit in order to avoid a government default and lawmakers want to have their framework in place by their July 4th recess.

  • One of the members of the “Biden Group”, Rep. Chris Van Hollen (D-MD) said, “We recognize it’s important to pick up the pace.”  Another member of the group, Rep. James Clyburn (D-SC) added, “We’ve got a long way to go.”  Van Hollen added, “I’ve been very clear that you have to have a revenue component.”  The group is scheduled to meet three times this week.
  • Republicans have stated their opposition to any tax hikes in conjunction with raising the debt ceiling.  Last month, Senate Republican Leader Mitch McConnell (R-KY) said, “An area where there is widespread agreement that we need to tackle is comprehensive tax reform, that cannot be done between now and August.  There are all kinds of both intended and unintended consequences attached to comprehensive tax reform.”  McConnell added, “There will be no tax increase in connection with raising the debt ceiling.”  However, last week, McConnell said, “I don’t think suggesting anything is on or off the table at this point publically makes much sense.”
  • However, ranking Ways and Means member Sandy Levin (D-MI) has said that tax reform won’t be possible if Republicans rule out tax increases.  Levin also said that tax reform would be difficult to complete by the end of this year saying, “Republicans would have to agree that revenues are on the table.”  And other key members of Congress have stated that tax reform will be difficult to accomplish in 2012.  Senate Budget Committee Chairman Kent Conrad (D-ND) said, “If it doesn’t happen this year, it certainly isn’t going to happen next.”

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