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Debt ceiling debate colors Nevada 2012 elections

By Cristina Silva

Associated Press

Published: Friday, July 8 2011 12:31 p.m. MDT

LAS VEGAS — The rivals in Nevada's U.S. Senate race both are looking for a deal that would increase the limit on the nation's credit card, but differ strongly on what else must be packaged in a compromise that would avoid an economic collapse.

Republican Sen. Dean Heller said negotiators from both parties must eliminate corporate tax loopholes and warned he would not support a deal that includes tax increases.

His Democratic rival, Rep. Shelley Berkley, has said tax breaks for profit-rich corporations and millionaires have helped grow the deficit.

The opposing stances adopted by Heller and Berkley reflect how the candidates — here and across the nation — hope to portray themselves in an election that could determine which party will control the Senate. Heller has adopted a conservative, anti-tax front. And Berkley wants to be seen as the candidate who will fight for middle and low-income earners daunted by the economy. It's a tried-and-true dichotomy the parties have embraced for years.

Neither candidate has much of a say in the Washington debt talks. Heller is a Republican in a chamber controlled by Democratic Senate Majority Leader Harry Reid of Nevada. Berkley is just another Democratic voice in the Republican-led House.

Nevertheless, their response to the debt limit crisis is already shaping their 2012 Senate campaigns. They are being closely watched by National Democrats and Republicans and both candidates' ultimate vote on the issue will likely be used against them in attack ads.

If Congress does not raise the debt limit by Aug. 2, U.S. Treasury Secretary Timothy Geithner has warned that the U.S. will be forced to choose between defaulting on loans or cutting popular government programs. Republicans want President Barack Obama and Democrats to agree on spending cuts equal to any increase in the debt limit. Democrats say the deal must also include some tax increases.

Heller would not detail what spending cuts he would accept and refused to say whether defense or health care spending needs to be reduced. He said eliminating various tax exemptions would generate revenue and simplify the confusing tax code. Heller, who was recently appointed to the Senate from the House to fill a vacancy, wants Congress to pass a balanced budget amendment to the U.S. Constitution.

"Everything should be on the table when it comes to spending cuts," Heller said. "The only thing off the table are tax increases."

Heller said Congress must lower the nation's corporate tax rate to help the United States compete globally. The nation has one of the highest effective corporate tax rates, according to the World Bank.

"I believe our taxes our high," he said. "It's a burden to businesses and it makes America less competitive and that's what that tax stands for."

Berkley, meanwhile, has been busy chiding Heller and other Republicans for holding up the debt ceiling vote in hopes of appeasing anti-spending conservatives. But she voted against a measure to lift that legal cap in May, reflecting Democrats' unhappiness with a vote some considered more political than productive. In all, 97 Democrats voted for it, but 82 voted against it. Berkley declined an interview request.

"Defaulting on our nation's financial obligations would not only jeopardize America's reputation overseas, but the Social Security checks and veterans' benefits that Nevadans rely upon," she said in a statement. "We must get serious about tackling our nation's debt and these negotiations are an important opportunity for lawmakers to show what their priorities are. Washington Republicans are attempting to balance the budget by ending Medicare while protecting billions in taxpayer giveaways to millionaires and billionaires, big oil companies making record profits and corporations that ship American jobs overseas."

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