The Corner

Hatching a ‘Reasonable Compromise’

Sen. Orrin Hatch of Utah will likely become the ranking Republican on the Senate Finance Committee early next year. From that perch, he’ll oversee the GOP’s tax-writing policy in the upper chamber. Before then, however, Hatch is keeping busy: In coming weeks, he will be one of the leading figures in the battle over extending Bush-era tax rates, which are set to expire at the end of the year.

As he looks ahead, Hatch predicts that there could be a “reasonable compromise” with Democrats and the White House. He urges the president to “come in good faith” to the negotiating table, and to “do this straight up and fair, without demagoguery or phony class warfare.” While Hatch would like to see the entire package of tax cuts made permanent, he tells us that he could support a measure that “extends all tax relief for at least the next three to five years.”

“If Democrats decide to play politics, they’ll try to make some tax cuts last longer than others, letting some expire in two or three years,” Hatch cautions. “But Republicans will not fall for that — we should not fall for that.”

Over the weekend, the president told CBS’s 60 Minutes that he’s open to discussing a compromise with Republicans, that “there’s a basis for a conversation.” But in the interview, and in his weekend video address, Obama maintained that he would like to extend only temporarily tax cuts for those who earn more than $200,000 a year, while making tax breaks for middle-class earners permanent — in other words, setting distinct expiration dates for separate tax levels.

Hatch is no fan of that idea. “We need to get this economy moving, and by extending all of the tax cuts, you provide rate reductions for every American. It’s not just tax cuts for the so-called rich — it’s about boosting the men and women who build those small businesses, as well as their employees,” he argues.

How Obama handles the debate will be a “sign of the president’s willingness to do what’s right,” Hatch says. “Is he willing to chuck out his plan to raise taxes on our job creators? If not, and the president gets his way, only middle-class tax relief will stay in place, while the upper tax brackets increase. That will have a direct — and dire — impact on small-business income and the small-business workforce.”

“The small cadre of people in the White House that put the health-care bills together cannot be the ones driving this,” Hatch continues. “I’ve reached out to him in the past two years to work on health care, but our interactions were limited. In this debate, we have to find ways to work together, for the sake of the economy.”

Obama, Hatch advises, “should take a page out of Bill Clinton’s book; he is intelligent enough to do it. He’s a very bright guy, and I think he has it in him to work with Republicans here. Instead of ridiculing or attacking Republicans, calling us the ‘enemy,’ he can move toward a more centrist approach; he can make some headway. If we can find a way to extend all of these tax cuts, it’ll be in the best interests of his administration — a wake-up moment. If he plays games, it could be downhill until 2012.”

“In the end, the president has to realize that these tax cuts are not about the rich: They’re about stopping the uncertainty,” Hatch says. “Taking over the House, especially in the numbers we did, sent a tremendous message. This year’s election was a referendum and a revolt against the big-government, big-taxing agenda. The American people are screaming: Won’t you just stop and listen? Well, we can start by stopping each and every one of these tax hikes, which are set to hit all Americans on January 1.”

Robert Costa — Robert Costa is National Review's Washington editor and a CNBC political analyst. He manages NR's Capitol Hill bureau and covers the White House, Congress, and national campaigns. ...

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