Politics & Policy

Supercommittee vs. the Tax Monster

Supercommittee GOPers say tax increases are out, revenue increases are okay.

The twelve-member joint House-Senate “supercommittee” on budget reduction has less than three weeks left to submit a plan with at least $1.2 trillion in savings over the next ten years. Democrats (and their allies in the media establishment) are hoping that Republicans will cave on tax increases, which are, according to Sen. Ben Cardin (D., Md.), his party’s “number one priority.”

They are likely to be disappointed.

As was true in previous budget negotiations, the Left has tagged anti-tax activist Grover Norquist as a bogeyman. Senate majority leader Harry Reid (D., Nev.) has accused Republicans of being “led like puppets” by the founder and longtime president of Americans for Tax Reform, whose Taxpayer Protection Pledge most GOP members of Congress, including all six Republicans on the supercommittee, have signed.

Regardless of whether Norquist is the puppet master that liberals would like to believe he is, Republicans are poised to reject any offer that includes tax increases — as they have done, successfully, in every budget negotiation this year.

House speaker John Boehner (R., Ohio) laid out his stance in an address to the Economic Club of Washington in September. “Tax increases . . . are not a viable option for the Joint Committee,” he said. “It’s a very simple equation. Tax increases destroy jobs.” Senate minority leader Mitch McConnell (R., Ky.) has repeatedly echoed this position.

But proponents of higher taxes continue to hold out hope. Some liberal media outlets were almost giddy at the news that 40 House Republicans had signed on to a letter to supercommittee members urging them to consider “all options,” including “raising revenue,” in pursuit of a bigger, $4 trillion proposal.

The list of GOP signers of the letter ranges from moderates like Reps. Steven LaTourette (R., Ohio) and Frank Wolf (R., Va.) to conservatives like Reps. Cynthia Lummis (R., Wyo.) and Paul Gosar (R., Ariz.). Republican presidential hopeful Ron Paul (R., Texas) even added his name to the effort. Of the 40 members, all but three have signed the ATR pledge. “This is not an ideal world,” Lummis told the Associated Press. “Grover Norquist is not in my district. I represent the state of Wyoming and its people.”

In the Senate, meanwhile, 33 Republicans have signed a letter urging the supercommittee not to include “net tax increases” in its final plan. Notable signatories include all three GOP members of the “Gang of Six” — Sens. Tom Coburn (R., Okla.), Mike Crapo (R., Idaho), and Saxby Chambliss (R., Ga.) — who had worked with Democrats to put forward a “grand bargain” deficit proposal of their own, worth about $3.7 trillion. Conservative critics such as Norquist and House Budget Committee chairman Paul Ryan (R., Wis.) denounced the Gang’s plan as a “$2 trillion tax increase.” Democrats and liberals had seen those three senators as potential allies in their push for higher taxes.

A similar letter, which has more than 50 signatures, is currently making its way through the House Republican conference. “Increasing taxes on Americans would destroy jobs, erase all hope of an economic recovery, and simply serve to feed out-of-control spending in Washington,” the letter states. “Thus, as you continue the important task to reach a deficit reduction agreement, we ask that any policies the Joint Select Committee prescribes not increase Americans’ tax burden.”

Interestingly, at least eight members have signed both letters. But that should hardly come as a surprise, as Republicans have repeatedly sought to distinguish between “raising revenue” and “increasing taxes.” The Republicans’ recent proposal for the supercommittee, for example, includes some $640 billion worth of revenue, but none of it comes from higher taxes. That stands in marked contrast to the Democratic plan, which proposes $1.3 trillion in new taxes, the majority of which would come from letting the Bush tax rates on top-income earners expire.

There are plenty of ways that the government can raise revenue — selling assets, raising fees, as well as pro-growth tax reform — without subsequently raising taxes. Even Speaker Boehner has acknowledged that the plan produced by the supercommittee would likely include some new revenue.

“I think there is room for revenues, but I think there clearly is a limit to the amount of revenues that are available,” he told reporters Thursday. However, Boehner said the new revenue would not be achieved through higher taxes but rather by eliminating loopholes and deductions in the tax code in order to reduce rates across the board, which would spur economic growth.

He also insisted that any Republican concessions on revenue would be contingent upon the Democrats’ willingness to make meaningful changes to Medicare, Medicaid, and Social Security. “Without real reform on the entitlement side, I don’t know how you put any revenue on the table,” Boehner said.

Norquist, for his part, likes what he sees, and tells National Review Online that the ATR pledge has never been stronger. Republicans have already won several times by negotiating with Democrats and President Obama and refusing to budge on tax increases, Norquist says, and he believes there no reason to expect a different result this time around.

“There is not some sort of compromise to be had,” Norquist said Friday in an interview with Fox News. “Somebody wins; somebody loses. Republicans want to cut spending and Democrats want to raise taxes. That’s the election we just had in 2010, and we’re about to have another here in 2012.”

Boehner sent shockwaves through the D.C. press corps on Thursday when he appeared to dismiss Norquist in response to a question about the ATR president’s influence on the Republican conference. “We’re doing everything we can to get our economy moving again and to get people back to work,” he told reporters. “It’s not often I’m asked about some random person in America.”

Norquist did not appear to take offense, however, responding via Twitter: “Boehner is wise: ‘Our conf. is opposed to tax hikes because we believe that tax hikes will hurt our economy and put Americans out of work.’”

Republican aides tell NRO that while the final supercommittee plan is likely to include some form of new revenue as a way to win Democratic support, it will not involve tax increases of any kind, making it compatible with the ATR pledge. That is not to say that the pledge has any undue sway over Republican members, but rather that the party simply believes, as President Obama himself has argued, “you don’t raise taxes in a recession.”

Despite Harry Reid’s rhetoric on the Senate floor, and his politically motivated efforts to attach tax-increasing measures to elements of Obama’s jobs package that Republicans have repeatedly voted down, there is a sense that Reid and other Democrats are not willing to risk the supercommittee’s failure out of a desire to raise taxes. After all, the creation of the twelve-member panel, a senior GOP aide points out, was Reid’s idea.

In fact, a Republican source told NRO that during the recent debt-ceiling talks, Reid was one of the more reasonable Democratic negotiators. “[Reid] would say, ‘Republicans say they’re not going to raise taxes. I believe them, let’s move on,’” the source said.

The GOP position this time around has not changed. Whether, and to what extent, Democrats are willing to “move on” remains to be seen.

— Andrew Stiles is a political reporter at NRO.

Andrew StilesAndrew Stiles is a political reporter for National Review Online. He previously worked at the Washington Free Beacon, and was an intern at The Hill newspaper. Stiles is a 2009 ...


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