You know something is amiss when the Wall Street Journal editorial board bluntly warns Republicans that it’s time to accept the new political reality on tax hikes. If you read down to the bottom of the Journal’s big editorial on taxes, you’ll discover this is what it has now done.
The Journal’s editorial tells Republicans that the “new political reality” is that it’s not a matter of whether taxes go up, but by how much, and even calls on Grover Norquist to give some ground:
The fact is that Republicans and Mr. Norquist both face a new political reality on taxes. President Obama’s re-election means that taxes for upper-income earners are going up one way or another. The Bush rates expire on December 31 unless Mr. Obama signs an extension, and he shows no inclination to do so except for anyone earning less than $250,000 a year ($200,000 if you’re single). The question is how Republicans should handle this reality while staying true to their principles and doing the least harm to the economy.
This is where Mr. Norquist can give some ground. If taxes are going up anyway because the Bush rates expire, and Republicans can stop them from going up as much as they otherwise would, then pledge-takers deserve some credit for that. Mr. Norquist says it violates his pledge to eliminate deductions without lowering rates, but at the current economic and political moment it is also a service if Republicans prevent tax rates from going up. Speaker John Boehner deserves some leeway to try to mitigate the damage by negotiating a larger tax reform.
In one sense, this isn’t a very big concession. After all, the Journal is saying that Republicans should continue to draw a line against letting tax rates go up — and give ground only on revenues. That is essentially John Boehner’s position.
In another sense, though, it is a fairly important concession about the reality of public opinion, given where it’s coming from. It is a break from what some Republicans have been saying — specifically, that the election gave them a mandate to hold the line against any tax increases. Both Norquist and Mitch McConnell have made variations of that claim, as have others. The Journal is allowing that the election has changed the politics of the tax debate — and it is even implicitly acknowledging that Obama has the leverage here, because taxes will go up if Democrats do nothing.
Now contrast this with the White House’s behavior.
I’m told that White House economic adviser Gene Sperling privately met with many House Democrats today and told them that Obama and his advisers believe they’re winning the tax fight. He told them that the White House sees raising revenues only by capping deductions as unacceptable, because it would hit the middle class. “He said that until we see Republicans come to the table when it comes to rates specifically, there isn’t going to be any more discussions on the other issues,” a Democratic aide present tells me.
Now, it’s true that that is roughly the White House’s public position, too. But it’s good to see White House advisers working behind the scenes to reassure Dems that they don’t intend to buckle. And the Journal editorial will only add to the sense among Dems that the politics of this fight are shifting their way.