11:57 am Oct. 9, 2012
Senator Chuck Schumer told a crowd of reporters at the National Press Club this morning that the prevailing model for tax reform—lower top tax rates and close some loopholes—ought to be scrapped.
"The old style of tax reform is obsolete in a 2012 world," Schumer said, according to prepared remarks.
Schumer said there were two basic conditions that had changed since a bipartisan deal, which still serves roughly as a model, was struck in 1986: "a much larger, more dangerous deficit, and a dramatic increase in income inequality," and that "old-style tax reform could make both conditions worse."
Schumer argued that the top tax rates be frozen and that revenue derived from closing loopholes be committed to deficit-reduction.
The carrot for Republicans, according to Schumer, is that Democrats would be willing to compromise on entitlement reform as part of such a deal.
"Democrats are willing to do serious entitlement reform, provided we keep the safety net," he told reporters during a question-and-answer session after the speech, adding that entitlement reform was never the problem with the failed Grand Bargain and that "every time we've come to a deadlock on deficit reduction it's been revenues as the sticking point."
Schumer dutifully avoided being pinned down to specific numbers, but the sketch attempts to reset the debate in advance of the general election, as a bipartisan group begins to meet in preparation for a lame duck session, which will be conducted with the shadow of a looming fiscal cliff of tax increases and defense cuts.
Schumer said he thought that there would be time to negotiate a big tax deal during the lame-duck.
"I hope there is and I think there is," he said. "I think it's a last resort to kick the can down the road."
House Speaker John Boeher, on a swing through upstate New York earlier this week, told Politico he wasn't sure a lame-duck session was the appropriate time to make such a deal.
Schumer said the elections make a deal more likely, rather than less, and that Democrats have been able to cut into Republicans' historic advantage on the issue of taxes by distinguishing between breaks for the wealthy and those for the middle class, at a time when "the pie is shrinking" for middle class families.
The contours of the lame duck session will, of course, depend heavily on what happens in early November. Schumer has predicted that Obama will be re-elected, and that Democrats will re-elect all their incumbents and thereby hold the Senate majority.
"I think we're doing well," Schumer said when asked for his current assessment. "If you look at it state by state, we're doing much better than we ever thought a couple years ago, in January of 2011. I think that continues."
Schumer said he hadn't seen anything since the debate to change that estimation, even as some Democrats fret over yesterday's Pew poll, which found Romney with a sudden four-point lead. The debate also appears to have swung some voters toward Republicans in close Senate contests, like the Massachusetts race between Scott Brown and Elizabeth Warren, where a new poll showed Brown with a slight lead, after having previously been trailing.
"I thought, what's his name, the 538 guy—" Schumer said, as reporters yelled out the answer. "Yes, Nat, Nate Silver, had a pretty good column today about where things are headed."
Silver's column argued that the pillars of the race haven't shifted dramatically and that, in context, the president still has a very good chance of winning in the Electoral College, an idea that Schumer endorsed.