Indiana senators split on whether new taxes needed to help trim deficit

U.S. Sens. Joe Donnelly and Dan Coats offer differing takes on need for new revenue, taxes, to help cut the U.S. deficit. Donelly says that's OK, within certain limits, Coats says no way.
Posted on Feb. 13, 2013 at 12:00 a.m.

Indiana’s two U.S. senators are split on whether new revenue — tax hikes — should be part of any deficit-reduction plan.

Responding to President Obama’s State of the Union address, Sen. Dan Coats, a Republican, blasted the notion.

“Hoosiers and Americans across this country are taxed enough,” he said Wednesday, Feb. 13, in a speech on the Senate floor, posted to his YouTube page. “Washington cannot keep asking hardworking Americans to dig deeper and pony up more money so that the federal government can spend more. The American people are not falling for that.”

Meanwhile, Sen. Joe Donnelly, a Democrat, supports the idea, to a degree, as long as middle-income people aren’t impacted. He alluded specifically to what’s termed a carried-interest loophole, a tax break that benefits hedge fund managers, suggesting those sorts of rules need to be changed.

“It’s not fair for an Elkhart firefighter to be paying a higher tax rate than a Wall Street hedge fund manager,” Donnelly said in a conference call Wednesday from Washington D.C. with reporters. He’d favor searching out new sources of revenue “but it would not be from middle-class families.”

Donnelly went on to cite the case of General Electric, saying the firm paid no federal income taxes last year and that his aim is that companies and taxpayers ”just simply pay their fair share.”

In addressing the ballooning U.S. deficit, Obama on Tuesday, Feb. 12, called for a mix of spending cuts and new revenue. He specifically touted elimination of tax loopholes and deductions “for the well-off and the well-connected.”

Coats, in his comments, charged that the president hasn’t acknowledged the seriousness of the U.S. debt, measuring an estimated $16.5 trillion, and said the focus should be spending cuts.

“Mr. President, I urge you to focus on fixing our country’s fiscal health,” Coats said. “You don’t do that by raising taxes. You do it by enacting bold spending reforms. You do it by reducing our debt. You do it by creating a budget so we can live within our means.”

U.S. Rep. Jackie Walorski, a Republican from the Elkhart area, also expressed opposition to new taxes.

“The formula to revitalizing this economy is not more government, more costly regulation, or higher taxes,” Walorski said in a statement in response to Obama’s speech. “We’ve tried that approach. It has yielded more debt, a stalled economy, and political gridlock.”

Trimming federal spending has been and will likely be a continued focus of debate among U.S. lawmakers in weeks to come. A series of broad-based automatic spending cuts, sequestration, are set to take effect March 1. U.S. leaders have been trying to craft an alternative to avoid the harshest impacts of the expected change.


Donnelly’s conference call, focusing on his support for the Violence Against Women Act, a measure meant to aid victims of sexual assault, domestic violence and stalking, covered several topics.

Ÿ Minimum wage: Donnelly expressed hesitancy about raising the federal minimum wage, as proposed by Obama Tuesday. He’s “very, very guarded” about the notion, he said, favoring instead creation of a climate allowing small businesses to grow.

Ÿ Guns: He said the focus of gun control efforts should be in areas where success is most possible, specifically in broadening background check requirements to make sure the mentally ill and those with criminal records can’t get weapons. “I’m trying to focus on what can get done,” he said.


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