Finally, a reason to be pessimistic about the supercommittee! In the Q&A after his speech to the Economic Club of Washington, D.C. (my advice: order the veal), Speaker John Boehner was asked whether letting the Bush tax cuts lapse – as current law says they will in January 2013 – would be, in his view, tax hikes. This question was never really settled in the final days of the debt deal fight. I think that Boehner unsettled it even more with his answer.
“The current tax policy of the United States, and fee policy, would generate almost $35 trillion in revenue,” he said. “But under current law it would generate $39 trillion. That’s because the law already assumes that the Bush tax cuts will expire. It assumes that the taxes in the Affordable Care Act will go into effect. It assumes that the AMT will continue to exist. It’s going to be very difficult for the committee to raise taxes, because they have to raise taxes beyond that $39 trillion.”
So: The baseline upon which the supercommittee is looking for savings is one in which all of these tax changes, already law, go into effect. Boehner says that’ll make it harder for the Twelve to raise taxes, and it will. If the standard for Republicans is that the Twelve are raising taxes if they don’t assume the ACA will repealed, then, yes, raising revenue is going to be very hard.