Discuss as:

Obama reaches out to GOP senators as Democrats seek more revenue

President Barack Obama is getting some surprising kudos from a group of unlikely lawmakers … Republican senators.

As part of a recent outreach effort from the White House, the president is making phone calls to some senators from across the aisle as they craft a new budget for the coming fiscal year.

“The important thing is that for the first time in a very long time the president appears to be doing some outreach to both Republicans and Democrats -- and that’s long overdue,” said Sen. Susan Collins, R- Maine, who said Obama had called her on Monday.

What appears a renewed possibility as a result of the president’s outreach is the kind of tradeoff that Obama and House Speaker John Boehner discussed back in 2011: Republicans would agree to increases in tax revenue -- as a result of reform of the tax code -- in return for Democrats accepting changes and potential cost savings in entitlement programs such as Medicare.

Sen. Lindsey Graham, R-S.C., who also chatted on the phone with the president, said, “What I see from the president is incredibly encouraging. I think there's a consensus building that without entitlement reform we're going to become Greece, and I think to get our Democratic friends to move on entitlements, we're going to have to move on revenue by flattening the tax code, eliminating deductions and preserving some of that money for the debt.”

“I got a call over the weekend,” Sen. Rob Portman, R-Ohio, told reporters Tuesday.

He wouldn’t discuss the details of his conversation with Obama, but when asked whether he favored a tax reform bill that raised new revenue by eliminating tax breaks, or wanted one that was revenue neutral, Portman said, “I would like to see tax reform because I think it will help the economy and there are very few things we can do around this place that’s going to give the economy a bigger shot in the arm.”

But he added cautiously, “If revenue is diverted from tax reform into deficit savings, it takes away some of the economic benefit of tax reform.”

Sen. John Cornyn, R-Texas, criticizes President Barack Obama over recent warnings of the impacts of sequestration.

Obama’s effort comes as the focus on Capitol Hill has quickly shifted from the spending cuts known as “the sequester” to negotiations over a budget plan for the new fiscal year which begins on Oct. 1.

Senate Budget Committee chairman Sen. Patty Murray, D-Wash., will unveil, probably next week, a budget resolution that will set revenue and spending targets for the coming fiscal year.

The order of the day for Democrats is: find more revenue. The target of Murray and some other Democrats: provisions in the tax code that benefit specific groups -- known as “tax expenditures.”

Economists say that these tax preferences, which include the tax-free status of employer-provided health insurance, are in effect a form of federal spending going to favored groups.

At a hearing of Murray’s committee Tuesday, one Democratic witness, economist Jared Bernstein, a former aide to Vice President Joe Biden, said, “If you believe we have a spending problem, you should also believe we have a tax expenditure problem.”

But committee ranking Republican, Sen. Jeff Sessions, R-Ala., said eliminating a tax expenditure “is a tax increase. You can’t spin it any other way.”

Using a process called budget reconciliation, Democrats could pass tax increases with only 51 votes. But prior to that, there would need to be an accord with House Republicans on a joint budget resolution -- something that right now seems a remote possibility.

Obama's renewed focus on Senate Republicans seems to imply that he sees little to be gained at this moment from further attempts to bargain with Boehner.

Yet to be seen: how Murray’s budget resolution interacts with the efforts of the Senate Finance Committee chairman Sen. Max Baucus, D-Mont., to pass comprehensive tax reform.

Baucus thinks the budget reconciliation process is not the preferred path to comprehensive tax reform. Under Senate rules, the budget reconciliation process is very constricting: it requires every revenue provision to have a score (how much revenue it raises or loses) and some tax code simplification ideas are not score-able.

Sen. Ron Wyden, D-Ore., who serves on both the Finance Committee and the Budget Committee, said: “The question is: where you start from … There will be some who’ll say let’s have new taxes, a carbon tax … There will be others who will argue that cutting (tax) rates is going to raise more revenue. But you’ve got to start somewhere.”

NBC News Political Reporter Kasie Hunt contributed to this report.

This story was originally published on