The conventional wisdom is that those stubborn, uncompromising House Republicans stand in the way of a debt ceiling deal. But so far, all they have done is unify behind a vote for cut, cap and balance. House Speaker John Boehner (R-Ohio) and House Budget Chairman Paul Ryan (R-Wis.) have said there may be time for backup plans (e.g., a variation on the McConnell plan), but not yet.
Meanwhile, there is disarray in the Senate. The Democrats have done nothing to advance a plan of their own. On the Republican side, Sen. Tom Coburn (R-Okla.) has offered up a $9 trillion dollar plan with a trillion in tax hikes. In doing so, he seems to be shooting for “McCain maverick” status, seeking approval from the media, Democrats and the history books but infuriating his own side. (Query whether he will be denounced as a “traitor” by the same hard-line conservative bloggers who have condemned McConnell for suggesting a backup plan with no tax hike).
In conversations with staff of both House and Senate Republican offices yesterday, I heard reactions ranging from amazement to extreme irritation that Coburn was now on board with a mondo tax increase, thereby giving fodder to the White House that Republicans were being unreasonable in refusing to hike takes in a weak economy.
Grover Norquist’s Americans for Tax Reform blasted the Coburn plan:
Senator Tom Coburn today released a $1 trillion tax hike plan. It’s not tax reform, it surrenders on spending, and it’s outside the conservative mainstream.
Unlike the president’s debt commission, Coburn’s plan includes no rate reductions in return for limitation on exclusions and deductions. The list of tax hikes includes:
Most (fully 57%) of the $1 trillion in Coburn tax hikes are in five areas: mortgage interest ($187 billion), health insurance ($200 billion), chained CPI ($60 billion), foreign earned income exclusion ($71 billion), and the transit/parking benefit ($52 billion). This goes to show that it’s not easy to raise taxes without hitting close to home. As we have pointed out, “tax expenditures” mostly go to everyday things like owning a home, having health insurance, and saving for retirement. The fact that 57% of the Coburn tax hikes are in this area is not surprising, but the report does bury this fact behind a veritable army of Lilliputian tax hikes which don’t add up to much.
The best part of the tax plan? The “tax me more” fund. ATR has long called for a “tax me more” checkoff for limousine liberals who complain that their taxes aren’t high enough. Rather than hiking taxes on everyone, these rich liberals should be able to pay more voluntarily to assuage their left-wing guilt. The Coburn plan does have this, providing a silver lining to an otherwise cloudy forecast for taxpayers.
Meanwhile, the Senate Republican hard-liners may now, after insisting on a vote on cut, cap and balance as well as the constitutional balanced budget amendment, be insisting on more time to build support, a sign that they really don’t have their support lined up. Moreover, this may signal a desire to impede and delay any deal, thereby shielding themselves from tough votes while maintaining bragging rights that they are the guardians of conservative purity on the budget.
Does this mean a deal won’t happen? No, but it should remind us that when push comes to shove, the House Republicans have, for example on the continuing resolution on the 2011 budget, shown both unity and pragmatism. It is not at all clear that the Republicans in the Senate have either quality.