Senate Minority Leader Mitch McConnell of Kentucky

Manuel Balce Ceneta, Associated Press

McConnell says tax talk over; Pelosi begs to differ

  • Article by: CHEYENNE HOPKINS
  • Bloomberg News
  • January 6, 2013 - 9:45 PM

WASHINGTON - Senate Minority Leader Mitch McConnell said further tax changes are off the table as lawmakers and the president gear up for a fight next month over raising the U.S. government's debt limit.

"The tax issue is finished, over, completed," McConnell said on ABC's "This Week" Sunday. "Now the question is what are we going to do about the biggest problem confronting our country and our future, and that's our spending addiction."

Less than a week ago, President Obama and lawmakers reached a compromise that averted the package of spending cuts and tax increases known as the fiscal cliff.

On Sunday, Republicans attempted to shift the debate away from taxes to focus on cutting government spending. Democrats countered that everything including taxes has to be a part of the negotiations.

"Mitch McConnell is drawing that line in the sand; it's a recipe for more gridlock," Rep. Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee, said on "Fox News Sunday."

The United States reached its $16.4 trillion legal debt limit on Dec. 31, and the Treasury Department began using extraordinary measures to finance the government. It will exhaust that avenue as early as mid-February, the Congressional Budget Office says.

Markets rallied last week following passage of a law raising income-tax rates to 39.6 percent for couples with annual income above $450,000 while extending tax cuts for lower incomes and delaying automatic spending cuts until March 1.

House Minority Leader Nancy Pelosi, D-Calif., said Sunday that taxes are "not off the table."

"Put it all on the table and see what is working," Pelosi said on CBS' "Face the Nation." "I'm fairly agnostic about what it could be now that we have injected some fairness into the process. But if it works for us, if it grows our economy, if it's something that justifies its existence, it should be there."

After partisan gridlock last year brought the government to the brink of default in August 2011, the stock market fell and Standard & Poor's cut the nation's credit rating to AA+ from AAA. House Speaker John Boehner, R-Ohio, withdrew from negotiations on July 22, 2011, and the S&P 500 Index fell more than 16 percent in the next 11 trading days.

"One thing I will not compromise over is whether or not Congress should pay the tab for a bill they've already racked up," Obama said in his weekly radio address, which aired Saturday. "The last time Congress threatened this course of action, our entire economy suffered for it."

McConnell said the focus should now turn to cutting spending.

"I wish the president would lead us in this discussion rather than putting himself in a situation of having to be dragged kicking and screaming to the table to discuss the single biggest issue confronting our future," McConnell said on NBC's "Meet the Press."

Saturday, Obama said that any reductions in spending should come alongside higher levies on rich Americans and companies by changes to the tax code.

"Spending cuts must be balanced with more reforms to our tax code," Obama said in his weekly radio and Internet address.

"The wealthiest individuals and the biggest corporations shouldn't be able to take advantage of loopholes and deductions that aren't available to most Americans."

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