GOP Repackages Agenda to Push Tax Reform

WASHINGTON (AP) — Top House Republicans called for tax reform, an easing of government regulations and increased domestic energy production on Thursday in what officials said was an attempt to show that spending cuts are not their sole emphasis for creating jobs.

The plan also backs a tax holiday for multinational companies that hold profits overseas, designed as an incentive for them to return the money to the United States rather than invest it abroad.

"Our concern is America's economy. And getting our economy going again is going to require us to reduce the spending, reduce the debt, to get the regulations out of the way, to let American job creators create jobs," Speaker John Boehner, R-Ohio, said at a news conference.

Boehner conceded there were few if any new initiatives in the package, which officials said had been assembled by Majority Leader Eric Cantor, R-Va.

The Republicans' decision to make the announcement came after weeks of controversy over their proposal to remake Medicare. Beginning in a decade, they envision replacing the current program, in which the government pays the bills for a specific set of benefits, with a system under which private insurance companies sell coverage.

Democrats attacked the plan heavily in a special House election they unexpectedly won Tuesday in New York, and Boehner conceded at the news conference that Medicare was a factor in the outcome.

"I could be somewhat critical of how the campaign was run, but the fact is we didn't win. And part of — a small part of the reason we didn't win clearly had to do with Medicare," he said.

At their news conference, Republicans volunteered no mention of Medicare.

"Now more than ever, our nation needs small businesses and entrepreneurs to get people back to work," said Cantor. "We are focusing on jobs."

In addition to reform of the tax code, Republicans called for reducing the corporate tax rate from 35 percent to 25 percent and enacting the Obama administration's trade agreements with Colombia, Panama and South Korea.

Other elements include legislation to streamline the patent-granting and drug-approval bureaucracies and overhaul the visa system to favor highly skilled workers.

Republicans also said they want to maximize domestic energy production to reduce dependence on foreign oil.

The 10-page plan said that since President Barack Obama took office, "American energy production has been halted...."

Asked for specifics, Cantor's spokesman, Brad Dayspring, declined to repeat the allegation. Instead, he said the administration had "actively blocked, hindered and delayed" production by delaying leases for offshore drilling and other steps.

Republicans also want to give Congress veto authority over any new government regulation that has a "significant impact on the economy."

The GOP plan included no specific recommendation on profits held overseas by large corporations. The money is subject to foreign taxes and would be taxed by the IRS as well if it were brought to the United States.

Dayspring said Republicans were reviewing a 2004 law that briefly cut the rate in this country to 5.25 percent. "We are open to discussing rate, duration, and conditions — all of those will play all be determined in the legislative process," he said in an email.

Republicans have already begun advancing some elements of their economic plan, and their most obvious priority since they took office in January has been to cut spending as a way of reducing deficits.

After winning legislation to cut $38 billion earlier this spring, GOP negotiators are in talks with the White House and Democrats for far larger reductions as part of a bill to increase the government's borrowing authority.

Vice President Joe Biden, leading the discussions, said earlier in the week he thought the group could agree on about $1 trillion in cuts over a decade. He said higher revenues would have to be part of any deal.

Negotiators met briefly in the Capitol during the day, and Sen. Jon Kyl, R-Ariz., hinted broadly that theirs would not be the final word.

"You'll notice President Obama is not in this room. He's got to be a player in the end, isn't he?" he said.

He also noted that Boehner and Senate Republican Leader Mitch McConnell of Kentucky were not in the room, either, "but they're certainly going to be players at the some point."

Kyl said Biden's public statements from earlier in the week had been a topic for discussion.

He quoted the vice president as asking Republicans in the private meeting if they understood "why I have to say" that higher revenues must be part of any agreement?

"And I said, 'I understand why you have to say that,'" Kyl reported.

In general, Democrats want to blend tax cuts and spending reductions as a way to reduce deficits while protecting favored government programs. Republicans want spending cuts to be as large as possible so they can rein in the federal government.

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Associated Press writers Laurie Kellman and Andrew Taylor contributed to this report.