Top Republicans in the House and Senate put the kibosh Tuesday on President Obama's plan to pay for a $447 billion jobs bill by closing tax loopholes and ending tax credits benefiting wealthy Americans. But the fine print in Obama's jobs bill actually treats the tax increases as an enforcement mechanism -- a trigger -- and the jury's still out on whether they'll accept the actual pay-for in the jobs bill, which tasks the joint deficit Super Committee with finding the offsets.
"The half-trillion dollar tax hike the White House proposed yesterday will not only face a tough road in Congress among Republicans, but from Democrats too," Senate Minority Leader Mitch McConnell (R-KY) said on the Senate floor Tuesday morning.
At a press conference at RNC headquarters, House Speaker John Boehner (R-OH) echoed this view.
But if you read the jobs bill, it states in the dense language of legislation that the tax increases only take effect if the new Super Committee doesn't find an additional $450 billion in deficit reduction, beyond the $1.2 trillion they're tasked with passing.
"If a joint committee bill achieving an amount greater than "$1,650,000,000,000" in deficit reduction as provided in section 401(b)(3)(B)(i)(II) of this Act is enacted by January 15, 2012, then the amendments to the Internal Revenue Code of 1986 made by subtitles A through E of title IV of the American Jobs Act of 2011, shall not be in effect for any taxable year."
In other words, the White House's first choice would be for the Super Committee to "go big" and find much more deficit reduction than they're obligated to by the debt limit law. And they would count those additional savings toward the cost of the jobs bill. But if the panel can't do more than the bare minimum, the tax increases would go into effect.
The key question for Republicans to answer is whether the tax increases work as a second-choice penalty, with the first choice being left up to the bipartisan deficit committee.
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