Hatch: Deficit reduction, tax reform different conversations

The senator, now the ranking member of the powerful Finance Committee, added that Democrats appear to favor a different approach, even if they don’t clearly state it. 

“They wish to balance the budget not through spending reductions,” Hatch said. “Rather, tax reform can provide the tax increases and additional revenue to balance the budget without spending restraint.”

Hatch’s comments came the day before the Finance panel is scheduled to have its first hearing this Congress on tax reform, and at the same time as when at least three fellow Senate Republicans – Saxby Chambliss of Georgia, Tom Coburn of Oklahoma and Mike Crapo of Idaho – are talking about revamping the tax code while they try to hash out a broad deficit reduction plan.

The Utah senator is also expected to seek a seventh term next year and, after his longtime Senate colleague Bob Bennett (R-Utah) was denied the GOP nomination last year, has appeared to make an effort to shore up his right flank. 

Chambliss, Coburn and Crapo are part of a bipartisan group of senators who are trying to craft deficit reduction legislation based on the recommendations from President Obama’s fiscal commission. Coburn and Crapo both served on that panel, which drew up a blueprint for raising revenue by overhauling the tax code, and endorsed its final plan. 

John Hart, a spokesman for Coburn, responded to Hatch’s Monday speech by agreeing with the senator that spending had been the major culprit when it came to the deficit. But he also signaled that tax reform would have to be part of the discussion on getting America’s financial books in order. 

“The real danger is the spending tsunami that is coming in through the front door thanks to years of neglect, complacency and collusion – with respect to entitlement expansions – by both Democrats and Republicans,” Hart said in a statement. “It’s fine to talk about separate tracks, but there is no track to separate. The current track is to borrow until we go over a cliff. There is no consensus fix.”

During his speech, Hatch also said that “there is a growing consensus” that tax reform is needed to get the country on sound fiscal footing, but also indicated that the sort of revenue-neutral tax reform plan that the president has called for would lead to tax increases. The senator also suggested that the current generation of policymakers could learn from then-President Reagan’s leadership during the last successful overhaul of the tax code a quarter-century ago. 

Facing the specter of a conservative challenge in 2012, Hatch told the Conservative Political Action Conference a couple of weeks ago that he intended to win reelection. But the senator also received something of a mixed reaction at the conference, over issues such as his vote for the Troubled Asset Relief Program. 

The Finance Committee’s Tuesday hearing on tax reform is expected to be the first in a series this Congress.