–Senate Finance Chairman Says Accord Is Needed On A Long-Term Plan
–Need Both Spending Cuts, Tax Hikes For Deficit Cut Plan
–Balanced Deficit Cut Plan Is ‘The Only Way Forward’
–‘Should Be Working Now’ on Deficit Reduction Plan

By John Shaw

WASHINGTON (MNI) – Senate Finance Committee Chairman Max Baucus
Tuesday said it would be “disastrous” if the U.S. plunged over the much
discussed fiscal cliff, but he added that it would be equally disastrous
for the nation to just extend Bush-era tax cuts and repeal scheduled
across-the-board spending cuts.

In remarks during a hearing by the Senate Finance Committee on the
coming fiscal cliff, Baucus said Congress should develop a
“comprehensive” deficit reduction plan that includes both spending cuts
and tax increases.

“It’s the only way forward,” Baucus said.

“We need a comprehensive debt reduction plan that does not shock
the system with deep, immediate cuts. Instead, we need a practical,
responsible plan that gives confidence to the markets and the country,”
he said.

Sen. Orrin Hatch, the ranking Republican on the Finance panel, said
Congress and the White House should be “working now” on a deficit
reduction plan.

He added that it’s “long past time” for policymakers to agree on a
comprehensive tax reform plan.

Hatch scorched President Obama for not being sufficiently engaged
on fiscal issues given the enormity of the fiscal challenge the nation
faces.

Former Senate Budget Committee Chairman Pete Domenici told the
panel that Democrats must end their resistance to entitlement reforms
and Republicans must abandon their resistance to additional revenues.

“This is not a normal time,” he said, adding that both parties must
reject “ideological purity” to reach a balanced and reasonable
compromise.

Former White House budget director Alice Rivlin told the panel that
the expiring Bush tax cuts and the scheduled across-the-board spending
cuts should be seen “more as a wall than a cliff” which, if allowed to
go forward, would “endanger the recovery.”

Rivlin said these policies should be replaced by a “grand bargain”
on fiscal policy with both entitlement reforms and additional revenues.

Rivlin said the “basic structure” of a balanced deficit reduction
plan must involve both spending savings and revenue increases.

“You can’t get there any other way,” Rivlin said, referring to a
comprehensive deficit reduction plan.

** MNI Washington Bureau: (202) 371-2121 **

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