The debt-reduction supercommittee may well fail in its assignment to find at least $1.2 trillion in savings. The anticipatory finger-pointing has already begun. Yet as the clock ticks, I find myself uncharacteristically optimistic, for two reasons.
In the short term, nothing concentrates the mind like a sequester — especially one that hits defense spending. Even more important, because the planned cuts would not take effect for a year and could be undone, nothing concentrates the political mind like an election — and lawmakers on both sides of the aisle seem truly worried about the electoral implications of failure. The public is already disposed to throw the bums out, and if the bums can’t even manage a down payment on debt reduction, the risk they will suffer that fate becomes even greater.
This fear explains the remarkable and underappreciated seismic shift that is the basis for my longer-term optimism: Republicans are beginning to break free of the no-new-taxes spell that has been cast over their party for the last few decades. No matter what happens, or fails to happen, before the supercommittee’s deadline next week, the era of lip-reading and unalterable pledges on revenue is nearly over.
Consider: As the supercommittee began its work, House Speaker John A. Boehner (R-Ohio), despite his earlier revenue-raising flirtation with President Obama, decreed that tax increases “are off the table.” Senate Minority Leader Mitch McConnell (R-Ky.) made the same blanket pronouncement.
Flash-forward a few months, and — just in time for Thanksgiving — the table has suddenly become more crowded. Amazingly, Sen. Pat Toomey (R-Pa.), the former head of the rabidly anti-tax Club for Growth, proposed a deal that included — gasp! — a net increase in tax revenue from the current level.
Just as amazingly, he was joined by Rep. Jeb Hensarling (Tex.), the former head of the ultra-conservative Republican Study Committee. When Hensarling served on the Simpson-Bowles debt reduction commission, he voted against its recommendations, declaring that “further tax increases on the American people should be off the table.”
I don’t mean this in a disrespectful way, but pigs are flying here, folks.
Democrats argue that the GOP offer shouldn’t be taken seriously. They dismiss the proposal as a ploy to promote the appearance of Republican reasonableness. Republicans, in this view, presented Democrats with an offer they couldn’t afford to take — and that Republicans knew wouldn’t be accepted.
It’s true that the amount of revenue the Republicans agreed to — $300 billion over 10 years — is piddling in the context of the $3 trillion or more in savings necessary merely to stabilize the debt at an unhealthy level.
It’s true, too, that the GOP offer represents a tax increase only in the artificial — and unaffordable — context of assuming that the Bush tax cuts are continued in their entirety, rather than ending at the end of next year. In comparison to letting the tax cuts for the wealthiest expire, as Obama and congressional Democrats want, the Republican offer represents a $500 billion tax cut.
As Democrats see it, Republicans crafted an awfully sweet deal for their wealthy constituents: a guaranteed top tax rate of 28 percent in return for a meager increase in revenue.
Perhaps, but the fact remains: The once-sacred principle of not raising taxes — any taxes, ever — has been breached. Not by some namby-pamby Republicans in name only, but by serious movement conservatives with unimpeachable anti-tax credentials. If they are willing to raise taxes now, they, or other Republicans, cannot decree such increases off the table in the future.
The Republicans’ anaphylactic allergy to taxes is by no means cured. In the event that the supercommittee strikes a deal, expect an uproar, especially among House members panicked at the thought of being accused of reneging on the no-new-tax pledges extracted by anti-tax activist Grover Norquist.
Already the most conservative elements of the party are rebelling. Rep. Patrick McHenry (R-N.C.) has rounded up signatures from about 70 House colleagues on a letter to the supercommittee decreeing any tax increase “irresponsible and dangerous to the health of the United States.”
But the cracks in Fortress Norquist are showing, and they are more than hairline. The pledge-signing natives have long been restless and looking for an escape hatch. Toomey and Hensarling have provided one.
A quip commonly attributed to George Bernard Shaw comes to mind. We’ve established — and, again, no disrespect intended; this is an excellent development — that Republicans are willing to raise taxes. From now on, we’re just haggling over price.