Johanns: Some in GOP could be open to higher tax rates with spending cuts

Sen. Mike Johanns (R-Neb.) said Friday that he would consider voting to allow tax rates on incomes above $250,000 to raise to their Clinton-era level if Democrats gave significant ground on entitlement reform.

“You know, I think there is an opportunity there. I’m not going to try to speak for all Republicans, but as a member of the Group of Eight, here’s what I said publicly and privately: Work with me on what’s driving the higher spending that literally we’re struggling with as a nation, our entitlements, and I will work with you on revenue,” Johanns told Bloomberg TV.

The bipartisan “Gang of Eight” has repeatedly attempted to strike a compromise on a budget deal, but is still perhaps best known for its role in blowing up last summer’s debt-ceiling talks. Efforts by Speaker John Boehner (R-Ohio) and President Obama to strike a deal were apparently submarined when the framework of the “Gang of Eight” agreement emerged, promising around $1.2 trillion in revenue increases. That was far greater than the $800 billion that Obama and Boehner had reportedly been focusing on, prompting Obama to ask for additional tax increases. The Republican Speaker then walked away from negotiations.

{mosads}On Friday, Johanns said he was optimistic that, this time, a deal would be struck in time to avert the so-called “fiscal cliff.”

“I think the probabilities are still good … that we’ll avoid it, yeah,” Johanns said, describing current reports of a stalemate as “fairly predictable.”

“The important thing here is, if you read between the lines, Speaker Boehner’s proposal involved revenue. That’s a huge step,” Johanns said. “Don’t minimize the importance of that step. The second thing I’d say is that the president continues to indicate that there’s some flexibility … I think the ingredients are there.”

Johanns was also unconcerned that only three weeks remained before tax increases and automatic spending cuts were poised to begin, saying an agreement in principle could give lawmakers a chance to refine the terms of the budget in the next year.

“You could put that in place,” Johanns said. “Now, when that phases in, I think that’s a matter of discussion and negotiation. But I do think each side is going to have to put a down payment down to get us beyond the end of the year.”