Can Tax and Social Security Heresy Lead to a Budget Deal?
Ideological heresy may not quite be breaking out all over Washington, but in the growing debate over the burgeoning debt, there are helpful hints of apostasy. And hope of a bipartisan consensus for responsible deficit reduction may lie atop those tiny waves of dissent.
The latest whiff of hopeful heterodoxy comes from three Republican senators– Saxby Chambliss of Georgia, Mike Crapo of Idaho, and Tom Coburn of Oklahoma. In quiet backroom negotiations and in a remarkable public exchange of letters with Grover Norquist of American for Tax Reform, the three lawmakers suggest that they might—might—support revenue-raising tax reform as part of a broader deficit reduction deal.
All of this is happening in code, and with classic Washington indirection. The three lawmakers—none of whom would ever be confused with a Rockefeller Republican—are the GOP half of a small bipartisan group of senators that is trying to develop a compromise deficit reduction plan. As members of President Obama’s deficit commission, Crapo and Coburn endorsed the proposal offered late last year by panel chairs Erskine Bowles and Alan Simpson. That plan included a call for a broad-based tax reform that would lower rates, eliminate most tax preferences, and raise about $800 billion in revenues from 2015 thr0ugh 2020.
When word spread that the three were working with Senate Democrats to design a bipartisan budget that would reduce spending, restructure Social Security, and reform and raise taxes, Norquist pounced. The three senators, he wrote, “were implicated as parties to a bipartisan budget deal containing a net tax increase.”
Norquist, the Tomás de Torquemada of tax policy, accepts no breach of his “Taxpayer Protection Pledge,” a vow to never raise taxes under any circumstances. According to the ATR website, the pledge has been signed by 237 House members and 41 senators, including Chambliss, Crapo and Coburn. Torquemada, you may recall, burned thousands of non-believers at the stake in the 15th century and was fondly known as “the hammer of heretics.”
Within hours, the three lawmakers responded with a very carefully written letter of their own. “Our pledge,” they wrote, “is to protect taxpayers, not special interests. To do so we must analyze every aspect of the federal budget, including the tax code.” On the other hand, they asserted their belief that “tax hikes will hinder, not promote, economic growth.” Finally, they included the usual disclaimer: The news story that reported their participation in budget talks provided only “rumored details.”
Before the day was out, Norquist gave the three his blessing. Their letter, he said, was “very encouraging.”
Yet, Chambliss, Crapo, and Coburn (who is said to have a good working relationship with Obama) never did rule out new revenues in a consensus budget deal. And Norquist seemed uncharacteristically conciliatory. Maybe it is the near-arrival of spring, but I find this encouraging.
Of course, no bipartisan agreement will be reached with GOP heterodoxy alone. The three Democrats in the Senate’s gang of six—Budget Committee Chairman Kent Conrad (D-ND), Virginia’s Mark Warner and, most importantly, #2 Senate Democrat Dick Durbin (D-IL) have gone out on their own limb by expressing a willingness to tackle Social Security. This issue generates as much heat on the left as tax hikes do on the right. Liberal bloggers have already dubbed them the “cat food caucus” for their trouble.
These six pols– who have yet to reach consensus even among themselves—have a long way to go before they can round up the 50 or 60 votes necessary to pass a serious budget in the Senate, to say nothing of getting it out of the House. And, as regular readers of TaxVox know, I have been extremely skeptical of a big budget deal before the next presidential election. Still, these bits of rebellion against party orthodoxy matter. They are small first steps. But they are steps.