Some folks on the left are getting very nervous about a radio interview with conservative Senator Tom Coburn in which he flatly predicted that the forthcoming “Gang of Six” deficit reduction proposal will not contain any tax hikes for the rich.
“There’s no plan to have a significant tax hike on anyone,” Coburn said, adding that none of the Republicans in the talks “will embrace tax hikes.”
Given that Dems are signaling that unspecified changes to Social Security are also on the table in these talks, it would be understandable to read this and conclude that a major cave is in the works. But at risk of sounding foolishly optimistic, I’m going to urge caution here and suggest that things might not be quite as bad as they appear.
After checking in wth a senior Senate aide about this, I think Coburn’s comments don’t quite do justice to what’a happening. My understanding is that the talks are zeroing in on a large increase of revenues — but not by raising tax rates. Rather, the compromise would center on eliminating tax earmarks and other deductions as a way to bring in more in taxes.
I’m not saying the end result on revenunes will necessarily be satisfactory — tax reform may not amount to much — or that Dems should stop pushing for increased taxes on the rich. I'm just pointing out that we shouldn’t read too much into public comments like those from Coburn, who, after all, may be doing a bit of chest-thumping against tax hikes right now because he knows he has to sell the final compromise to conservatives later.
The other looming question is this: What are Dems prepared to trade away for increased revenues that don’t even include tax hikes? It’s being widely predicted that Senator Dick Durbin, the leading Gang of Six liberal, is getting ready to cave on Social Security. But while it’s true that Durbin’s recent rhetoric on Social Security has been alarming, I’m not yet convinced he’s going to fold.
As I noted here yesterday, Durbin may be up to something a bit more subtle than it appears. Durbin believes that Dems need to signal a willingness to “change” Social Security, because if they endorse proposals like the one offered by Bernie Sanders — which draws a line against any cuts — it will give Republicans an easy way of walking away from the table on revenues. Many fear Durbin’s role will be to put the liberal stamp of approval on unacceptable changes to Social Security. But he may view his role differently: To balance the need to keep Republicans at the table with the need to keep the agreed-upon changes to Social Security limited enough so that the safety net is fundamentally intact and liberals can ultimately accept them.
Again, this is the optimistic view of what’s going on. Maybe the overall package will represent a major Dem cave. But I submit that we should wait to see the details before making this decision.