Republicans to rule out fresh tax hikes in US

City A.M. Reporter
US SENATE minority leader Mitch McConnell yesterday ruled out raising tax revenues again on top of the tax hike on the wealthy in the fiscal cliff deal, and said the full focus must now be on spending cuts.

“The tax issue is finished, over, completed,” the Kentucky Republican said on US television’s ABC network.

“That’s behind us. Now the question is what are we going to do about the biggest problem confronting our country and our future, and that’s our spending addiction.”

In an another appearance on NBC’s “Meet the Press”, McConnell said he favoured tax reform, but it should not increase revenue.

McConnell said the White House should start working with Congress immediately to determine spending cuts to reduce the deficit, before the March deadline to raise the federal borrowing limit brings another fiscal crisis.

“We could do things very quickly, these are not new issues,” he said on ABC.

Congress and the White House reached a deal last week in the nick of time to avoid the fiscal cliff of severe tax increases and spending cuts that many economists said could have tipped the country into recession. The deal was greeted with relief in the world’s financial markets, where equity prices got off to a flying start to the year.

But Republicans complained the deal was focused almost entirely on raising revenue through a tax increase on families making more than $450,000 (£280,000) a year, and did not make significant spending cuts or reduce deficits.

Asked whether Republicans would threaten a US credit default in its press for spending cuts, McConnell told ABC: “It’s not even necessary to get to that point. Why aren’t we trying to settle the problem?

“Why aren’t we trying to do something about reducing spending?”