Less than a month before a series of automatic spending cuts and tax hikes are set to go into effect, U.S. Senator Lindsey Graham says he is pessimistic about a deal being hammered out. Appearing on CBS’s “Face the Nation” on Sunday, Graham predicted that the nation is set to go over the so-called “fiscal cliff.”
“My side knows we lost the election and we’re willing to put revenue on the table that will get some political heat for people like me. That is movement in a positive way. Republicans should do revenue, we’re willing to do it in a smart way.”
In the past several days, negotiations have hit a roadblock as each side balked at the other’s opening proposal. The critical component to President Obama’s plan is to raise taxes by $1.6 trillion over 10 years. It centers around his insistence that the tax cuts expire for those making more than $250,000 per year, therefore raising taxes on that group.
Graham says there is a better way to build revenue. “If you raise tax rates you get $400 billion in revenue and hurt job creation. If you limit deductions at about $40,000 to $50,000 per person, you protect the middle class and you get about $800 billion in revenue.”
Graham says the president’s opening offer does not address reform of entitlement programs, specifically Medicare, Medicaid, and Social Security. “I would move toward limiting deductions, but I’ll only do that if we do entitlement reform, and the president’s plan when it comes to entitlement reform is quite frankly a joke. I don’t think they’re serious about finding a deal.”
Also appearing on the program, Treasury Secretary Timothy Geithner reaffirmed the president’s stance, saying “there is no way we can get to a balanced plan that puts us back on a path to living within our means, protects Medicare, invests in things we need, if you extend present tax rates.”