Rep. Hoyer Casts Doubt Over Loophole Closures As a Solution to Sequestration

House Minority Whip Rep. Steny Hoyer, D-Md., speaks during a recent news conference on Capitol Hill. Hoyer says he has met privately with GOP members about avoiding the pending sequester cuts. (Photo by Drew Angerer/Getty Images)

Like Pentagon officials, defense industry executives and employees within their organizations, your correspondent is looking for any small clue that might show a path leading toward a deal that would void or again delay pending national defense cuts. Yet, when one player cracks open a door, another quickly slams it shut.

This week offered what — for about an hour — appeared to be such a clue: Closing tax loopholes. The idea, as has been floated in legislation crafted by Senate Armed Services Committee Chairman Carl Levin, D- Mich.,  picked up steam Tuesday when President Barack Obama mentioned it as part of his desired “balanced” deficit-reduction package to turn off pending twin $500 billion  defense and domestic cuts just minutes after GOP House Speaker John Boehner, R-Ohio, endorsed the idea on Twitter.

But it didn’t last long. Boehner issued a statement shortly after Obama’s remarks saying he does indeed support closing corporate loopholes — but he wants to use any generated revenues to lower other federal tax rates, not to pay down the deficit.

Then on Thursday, Rep. Steny Hoyer of Maryland, the No. 2 Democrat in the House, poured more cold water on the loophole closure-as-solution notion when he said that is akin to “going after waste, fraud and abuse.”

Ouch. As Hoyer acknowledged during a television interview, everyone agrees that waste and abuse should be targeted, but the actual savings are not nearly enough to produce sizable deficit reduction. The same is true for corporate tax loopholes, Hoyer said.

So with the clock ticking down to a March 1 deadline for Congress and the White House to strike the $1 trillion deficit-reduction plan needed to void the pending cuts to planned spending — or a smaller package to further delay them — the search of clues continues.

Is there any hope? Perhaps. Hoyer made a bit of news during his “Morning Joe” appearance, saying he has met one-on-one with multiple “conservative Republican” lawmakers. And they have told him this privately: “Yes, we need a balanced solution.” That is notable because most congressional Republicans oppose that kind of package, which is favored by Democrats and Obama — their desire is to get to $1 trillion through more cuts, entitlement program changes, and tax reforms to raise revenue. GOP members oppose any new revenues or defense cuts, which Democrats say are necessary.

So Hoyer’s revelation provides hope about a last-second deal that would turn off the pending cuts.

But in a sign of the times — and an illustration of the partisan hurdles that stand in the way of voiding or again delaying sequestration — Hoyer declined to name those GOP lawmakders, saying he didn’t want to “out them.” Eight days.

John T. Bennett

John T. Bennett

Bennett is the Editor of Defense News' CongressWatch channel. He has a Masters degree in Global Security Studies from Johns Hopkins University.
John T. Bennett