It looks like Congress is actually working to reduce federal spending in conjunction with raising the debt limit, and that's a good thing. Republicans -- finally? -- seem to be grasping the proper nuance of their "no new taxes" pledge.
Revenue is another major obstacle. Many Democrats say they could never vote to gut programs that help low- and middle-income families unless the wealthy are also forced to sacrifice. Democrats argue that Republicans should at least join them in eliminating corporate tax breaks that benefit major oil and gas companies and chief executives with private jets.Senate Republicans have shown some openness to that approach, voting last week to eliminate tax breaks for ethanol blenders. But House leaders remain opposed to targeting credits and deductions without also overhauling the tax code and lowering rates. In the Biden talks, Republicans have so far declined to consider eliminating even certain temporary tax breaks, such as those for Puerto Rican rum and NASCAR tracks, that have been repeatedly lampooned by watchdog groups.
Many of those tax breaks should be eliminated -- they are based on political favoritism and they distort the economy. However, these tax breaks need to be eliminated in such a way that they don't increase revenue for the government. Every dollar raised by eliminating a tax break should be returned to taxpayers via lower rates. Republican voters should accept the elimination of these tax breaks as long as the money is returned rather than spent. Such a result should not be viewed as a breach of the "no new taxes" pledge.
