I believe that the last time there was a combined meeting of the two Committees on tax issues occurred in 1940 to discuss war taxes. Today's meeting is to discuss certain aspects of current tax law relating to debt and equity in the context of tax reform.
Because of the uniquely serious challenge facing this nation - action on the debt limit - today it would be more appropriate if we were gathering to discuss this challenge. This issue - the debt limit - is squarely within the jurisdiction of our two committees.
That does not mean that the specific topic before us is unimportant. Indeed, if we are to seriously address tax reform, issues relating to debt and equity must be considered and like other significant issues, done so in depth and with open debate. As our witnesses’ prepared testimony demonstrates, the subject is complex, and answers do not always automatically fall into usual ideological frameworks.
I fear that the chances of the discussion at this joint hearing leading to fruitful action have been dimmed immeasurably by the environment created on the overarching issue of action on the debt ceiling.
Yesterday, Senator McConnell said, “After years of discussions and months of negotiations, I have little question that as long as this president is in the Oval Office, a real solution is probably unattainable."
This approach, which repeats Senator McConnell's earlier statement this his number one priority is defeating President Obama in next year's election, totally politicizes and poisons the well for tax reform in the near future.
It flies in the face of the basic facts: President Obama inherited a debt that had risen under President Bush from $5.7 trillion to $10 trillion. He inherited a record $1.5 trillion deficit that had wiped out the record surplus inherited by President Bush.
The fact is that under the House Republican budget that was unanimously opposed by Democrats earlier this year, it would still be necessary to raise the debt ceiling.
The President has said very clearly that we need a balanced framework to reduce the deficit now and in the future, while allowing for needed investments to promote economic growth and job creation. It is not helpful to walk away from the table. It is not helpful to insist on an ideological agenda that cannot become law.
We should hear and review carefully the testimony now to be presented to us by our distinguished, knowledgeable witnesses. But I fear that any insights that we gain in the process will be washed away if the debt ceiling is not raised and we suffer the momentous consequences that would result from destroying the full faith and credit of our nation.
