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Business Interests Can Influence Tax Debate, Schumer Says

Sen. Charles Schumer (D-N.Y.) said he believes Tuesday’s elections presented a twofold mandate for Congress: cut spending as Republicans have advocated and raise taxes on the wealthy, as Democrats have campaigned on.

Doing the latter will require help from the business community, which can provide a voice to counter Americans for Tax Reform President Grover Norquist, the author and enforcer of the now infamous no-new-taxes pledge many GOP lawmakers have signed.

Despite spending much of this session attacking House Republicans in his capacity as the Democratic Policy and Communications Center chairman, Schumer told reporters today the clearest message from this week’s elections is that voters are seeking compromise and bipartisanship, especially as lawmakers grapple with how to deal with fiscal issues.

“What does the House Republican party stand for above all? It’s cutting government spending … and the House was re-elected. But on the Democratic side, [voters] sent a message that part of the fiscal compromise should be revenues,” Schumer said, pointing to both President Barack Obama’s campaign and Senate races across the country that focused on raising taxes on the wealthiest Americans.

“[Republicans] said this election will be a referendum on revenues and once we win everything, we won’t have to raise revenues — and obviously that didn’t happen,” Schumer added. “Two years ago there was a clear message — cut spending — and we were shellacked in the election and we took that message to heart.”

Schumer’s remarks came one day after Speaker John Boehner (R-Ohio) told reporters that he again is open to considering revenues as part of a sweeping budget package. In negotiations with Obama in the summer of 2011, Boehner had been amenable to including approximately $800 billion in revenue as part of a “grand bargain,” but the talks disintegrated and it was never clear whether Boehner would have the backing of his increasingly conservative caucus.

“For purposes of forging a bipartisan agreement that begins to solve the problem, we’re willing to accept new revenue, under the right conditions,” Boehner said Wednesday. “What matters is where the increased revenue comes from, and what type of reform comes with it.”

Schumer praised Boehner’s comments as having a “good tone,” while challenging the Speaker’s emphasis on dynamic scoring and keeping tax rates across the brackets low.

Indeed, Schumer’s remark at a press event last month drew a brighter contrast than other Democrats had before on what to do with increased revenues. A long-held bipartisan position, negotiated in groups such as the Bowles-Simpson fiscal commission and the Senate “gang of six”, has been to take the revenue from overhauling the federal tax code and apply it toward keeping rates low. Though this solution would seem like a natural way to meet Boehner’s position on revenues, Schumer has said it is unacceptable and that the revenues raised should be put toward the deficit.

The New York Democrat also put a special emphasis on the involvement of the business community in any debate.

“When Republicans start hinting that they’re willing to do this, all they hear from is Grover Norquist and those opposed to it. We need the business community to play an influential role here,” Schumer said, adding that the White House should reach out to business as well.

Though Schumer focused most of his remarks on fostering a new bipartisan era of legislating, he said that the tea party “has peaked and is on the descent” and that former George W. Bush chief of staff Karl Rove has some soul-searching to do.

“Karl Rove’s reputation is going to take a significant hit, if Crossroads were a business and Rove was the CEO, he’d be fired for getting a poor return for his investors,” Schumer quipped, referring to the operative behind the American Crossroads super PAC and its allied nonprofit, Crossroads GPS.

Schumer praised the performance of the candidates he had recruited as Democratic Senatorial Campaign Committee chairman who won re-election easily this week, including Sens. Amy Klobuchar (Minn.) and Claire McCaskill (Mo.).

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