Somewhere in the Cayman Islands, Senator Sheldon Whitehouse of Rhode Island likes to point out, is a small 5-story building with over 18,000 businesses listed as tenants.
Reforming the tax code to close tax loopholes like the one Senator Whitehouse pointed out has bipartisan support. Former Republican Senator Judd Gregg of New Hampshire joined Democratic Senator Ron Wyden to sponsor a bill simplifying the tax code. Current Republican Senator Dan Coats of Indiana has taken Gregg's place as the primary Republican supporter of the same bill. The bipartisan Erskine-Bowles commission on deficit reduction advocated similar principles, and the same ideas were on the table for the Gang of Six.
So, why hasn't closing tax loopholes made any headway at the debt ceiling negotiating table? First, many Republicans are unwilling to back away from the extreme anti-tax position of Grover Norquist's "Americans For Tax Reform," even on a center ground issue like simplifying the tax code. Secondly, Speaker John Boehner's Republican caucus appears unwilling to pass anything that smacks of compromise. House Republicans have turned their backs on a very good deal (Republicans would get trillions of dollars in spending cuts from a Democratic administration, and President Obama has even put some cuts to sacred Democratic programs on the table).
What We Should Do Next: Bring Tax Loopholes To A Vote If Negotiations Continue To Falter
The battle over the best proposals in the debt ceiling debate, in the eyes of 2012 voters, will be won in the center ground. Tax code legislation is squarely in the center ground between raising taxes and cutting spending like an ax-wielding madman. And if opposition leaders at the debt ceiling negotiations say their caucuses won't support centrist proposals, members of the House and Senate should have to make themselves publicly accountable by voting yea or nay on tax reform and defending their vote to their constituents.
The Senate should either vote on some legislative package based on the Coats/Wyden "Bipartisan Tax Fairness and Simplification Act," or it should vote on a non-binding "sense of the Senate" resolution that says closing tax loopholes should be part of a final debt ceiling deal.
President Obama and the congressional negotiators should try to reach a deal in the next week. But if opposition leaders continue to insist on rejecting reasonable proposals, President Obama should take the rejected proposals and introduce them to the full Congress for a series of votes. If the United States defaults on its obligations, the American people deserve to know exactly what their Senators and Representatives rejected to get us to that state.
Other National Debt Posts:
Why The Gang of Six Proposal Has The Best Chance of Passing the House and Senate