GOP turns screw on Dems in tax talks

Republicans won’t support a major priority of House Democrats — indexing the Child Tax Credit (CTC) to inflation — in a big bill that would make some expired and expiring tax breaks permanent, Senate Finance Committee Chairman Orrin Hatch (R-Utah) said Tuesday.

“That’s a nonstarter,” the Utah Republican told reporters. “We cannot do that. In a bill this large, you just can’t do it.”

{mosads}Hatch’s comments come as both parties jockey for position in the tax negotiations.

House Democratic Leader Nancy Pelosi (Calif.) said in a letter to colleagues Monday that indexing the CTC is important to members of the caucus, given the cost of making several business tax breaks permanent.

“During the caucus meeting last week, it was clear that, in the absence of a balance between working families and business provisions, the permanent bill was on a dangerous path of being too large for Members to support,” she wrote.

Hatch, however, argued that Pelosi might have to give up something to win a deal that would permanently expand the CTC and Earned Income Tax Credit, which helps low-income families.

“She’s a very good legislator, and she knows that I don’t fool around, and that I won’t put something up that isn’t good,” he said. “So I hope that she’ll look at what we’re doing and say, ‘You know, that’s pretty good.’”

An official with United Way Worldwide, which backs the two income tax breaks for families, said he’d rather get a deal that permanently expands those breaks than miss one because of the indexing demands.

“We do not want to blow this deal up over indexing CTC,” Steve Taylor, the senior vice president and counsel for public policy at United Way Worldwide, told The Hill.

House Ways and Means Committee Chairman Kevin Brady (R-Texas) released a bill Monday night that would renew expired tax provisions for two years.

Brady said he intends the bill to be a backup plan in case a bigger deal can’t be reached, but the move could also be seen as a signal from Republicans to Democrats to get serious about a deal.

Hatch called Brady’s bill “the first move.”

He said he is optimistic that an agreement on a bigger package with some permanent provisions can be reached, but it will depend on the Democrats.

“We’re working behind the scenes to try and see if we can get this put together,” Hatch said.