Moreover, Democrats argue, tax reform doesn't meet the requirements that Republicans have set for supporting an increase in the debt limit. House Speaker John A. Boehner, R-Ohio, has repeatedly said he would demand "cuts and reforms" sufficient to put the nation on a path to a balanced budget. But the GOP vision for tax reform is "revenue neutral," meaning all the cash raised from wiping out tax breaks would be returned to taxpayers in the form of lower rates, with no money left over to reduce annual budget deficits.
Obama, by contrast, is pressing to raise taxes on the wealthy by at least $600 billion over the next decade.
Camp argues that a simpler tax code would spur economic activity, create jobs, increase wages and, thus, raise revenue, offering "one way out of our debt."
"Obviously, we've already done a lot to cut (agency) spending. The committee is also looking at entitlement reform, but those hearings are just beginning," Camp said. Tax reform, on the other hand, has been in the planning stages for two years. Camp has already unveiled proposals related to Wall Street, small businesses and international taxation and is vowing to draft complete legislation by the end of the year.
"It's not small ball. It's a big idea," Camp said. "This is something that is important and something that we could connect with the debt limit."
Nearly 30 GOP lawmakers attended the first meeting on the subject Thursday afternoon. Additional sessions are planned when the House returns after a week-long break. Boehner spokesman Michael Steel said tax reform is among an array of options under consideration, adding that a final decision has yet to be made "about the best combination of spending cuts and reforms that will be necessary to increase the debt limit in accordance with the Boehner rule."
GOP aides, however, said tax reform has emerged as the best option for House leaders determined to act early, avoid blame for another debt-limit crisis and associate the party with policies that help ordinary families.
The White House, meanwhile, insists that it will not negotiate over the debt limit. "Congressional Republicans have been presented a very common-sense compromise budget offer and have gotten the regular order process they have been asking for for years. Now the ball is in their court," said an administration official, speaking on the condition of anonymity to discuss private talks. "The one thing that is nonnegotiable is the debt limit - no trading, no negotiating over paying the bills Congress has racked up. Earlier this year they passed on putting our nation at risk of default, and it's incumbent upon them to do it again."
The House strategy is developing, and Camp said it is not clear how it might come together. Negotiations are underway between the House and Senate budget committee chairmen, Rep. Paul Ryan, R-Wis., and Sen. Patty Murray, D-Wash. If those talks become the forum for striking a budget deal and raising the debt limit, GOP aides said, Republicans could insist that a tax overhaul be put on the legislative fast track, with special protections from filibusters in the Senate. The debt limit might be raised for only a few months, with the promise of another increase when tax reform legislation passes the Senate.
Such an agreement, however, would require Republicans and Democrats to resolve the long-standing dispute over whether tax reform should generate fresh tax revenue to reduce deficits or whether it should lower tax rates. In a recent hearing on the Obama budget, Baucus suggested a compromise: Maybe, he said, tax reform should do both.
"We will close billions of dollars of loopholes. Some of this revenue should be used to cut taxes for America's families and help our businesses create jobs, and some of the revenue raised in tax reform should also be used to reduce the deficit," Baucus said. "It's all about finding common ground."