The Norquist–Coburn Feud Reignites
Are tax subsidies the same as tax cuts, or are they just subsidies?


Andrew Stiles

The feud between Sen. Tom Coburn (R., Okla.) and tax lobbyist Grover Norquist came to a head (again) this week as Republicans girded themselves for a potential deal on the debt ceiling. Sparks flew Tuesday when Coburn forced a cloture vote on an amendment to eliminate $6 billion in ethanol tax subsidies. Ethanol, however, was hardly the issue at stake.

GOP leaders have made it clear that Republicans will not support a deal to raise the debt ceiling if it includes tax increases. But as Tuesday’s vote showed, not all Republicans agree on what constitutes a “tax increase.” At issue is the “Taxpayer Protection Pledge” that Norquist, president of Americans for Tax Reform, urges all GOP lawmakers (and any willing Democrats) to take. All but seven Republicans in the Senate — including Coburn — and all but six in the House have signed on. Signers promise to oppose any tax increase as well as “any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.”

Coburn’s amendment eliminated tax breaks for the ethanol industry but did not include any offsetting tax cuts. The Joint Committee on Taxation estimated that his proposal would raise $2.4 billion in new tax revenue over the remainder of the year, which Coburn intended to put toward reducing the deficit. Norquist, therefore, denounced the amendment as a violation of the pledge.

The vote failed, 40 to 59, well short of the 60 needed for cloture, but the fact that 34 Republicans supported the amendment raised eyebrows on Capitol Hill as perhaps a sign that Norquist and his pledge have lost clout in the GOP conference. Coburn certainly touted it as such. “That’s 34 Republicans who are willing to say this is more important than a signed pledge to ATR,” he told reporters after the vote. “I think you all think [Norquist] has a whole lot more hold than I think he has.” Then, in a follow up statement, he added: “Taxpayers should be encouraged that Republican senators overwhelmingly rejected the ludicrous argument that eliminating tax earmarks is a tax increase.”

Norquist vociferously denies this charge, pointing out that ATR gave senators the go ahead to vote yes on Coburn’s measure provided they also agreed to support an amendment by Sen. Jim DeMint (R., S.C.) that would have made up for the lost tax credit by eliminating the inheritance tax. There has been no vote on that measure yet, and it’s not clear when or if a vote will happen, but most Republicans have voiced support. “No one violated the pledge,” Norquist said. “Nobody followed Coburn over the cliff.”

Norquist accuses Coburn of trying to trick colleagues into supporting a tax increase in order to undermine the Republican position in the ongoing debt negotiations. “He’s trying to screw the rest of the Republican party because he is so mad at the world,” Norquist tells NRO. “He didn’t want to get rid of the ethanol tax credit without raising taxes. The important thing in his life was raising taxes.”

In fact, Norquist has been at odds with Coburn ever since the senator voted in support of the Bowles-Simpson deficit commission’s final report, which Norquist describes as “a massive $2 trillion tax hike” and a blatant violation of the ATR pledge. He has constantly criticized Coburn’s involvement in the “Gang of Six” talks, as well as his stated willingness to negotiate when it comes to taxes. Norquist says Coburn’s statements after the vote make it clear that his amendment had nothing to do with ethanol subsidies and everything to do with forcing Republicans to go on record supporting a tax increase — essentially a gateway drug that would inevitably lead to additional increases down the road. “He said, ‘Ha ha, popped your cherry, lost your virginity. Now give me $2 trillion in tax increases,’” Norquist says. “As soon as they voted, he turned around and called them sluts. Guys like that didn’t get second dates in high school.”

And even worse, Norquist argues, the vote played right into the Democrats’ hands by letting them cast Republicans as amenable to tax increases. Indeed, a number of Democrats put out statements to that effect, some spinning it as good for the country and others alleging Republican hypocrisy. “[Coburn’s] willingness to cut special-interest tax breaks for the purpose of deficit reduction is encouraging,” said Rep. Chris Van Hollen (D., Md.), ranking member on the House Budget Committee. Democrats in Massachusetts wasted no time attacking Sen. Scott Brown (R., Mass.) — up for reelection in 2012 — for “breaking promises” by violating the ATR pledge.