Ranking Finance Member Sen. Orrin Hatch (R-Utah) recently defined his vision to reduce the national deficit on the Senate floor, saying that serious reform entitlements are needed to achieve such a goal.
Hatch said tax reform is also an important step if a bipartisan deal is ever to be reached on the deficit but that tax reform alone will not come close to bringing the deficit under control.
“My colleagues insist that their demands for higher taxes are all about deficit reduction,” Hatch said. “But, let’s face it, if deficit reduction were the real goal, entitlement reform would also be on the table. After all, that is where the money is. That is where we have a chance to really reduce the deficit.”
Congress faces a crossroad on the issue of taxes, according to Hatch, who said he encouraged Congress to follow the same bipartisan path taken in 1986 by former House Democratic Leader Dick Gephardt and former Treasury Secretary James Baker.
“As you’ll recall, they were two critical players in that last successful tax reform effort,” Hatch said. “And, in 2011, they advised us to not mix deficit reduction and tax reform.”
Raising additional revenues to condition tax reform is not Hatch’s preferred option, but he said it seemed to be the path most Democrats would opt to take.
Hatch said Senate Democratic leaders believe that their budget proposal that includes nearly a trillion dollars in tax hikes should be the model for tax reform.
This position, Hatch said, fails to address the main drivers of the nation’s current debt and deficits and the source of the coming fiscal calamity – federal entitlement programs, especially health care entitlements like Medicare and Medicaid.
“So, despite my friends’ claims to the contrary, the root of our current fiscal crisis is not a lack of revenues, it is unsustainable spending,” Hatch said. “More specifically, it is entitlement spending.”
Unless Democrats in Congress agree to compromise, neither tax reform nor deficit reduction would be possible, according to Hatch.