Turning post-election Republican talk of tax increases into action requires significant spending concessions from Democrats and risks a partisan fracture.
As Congress returns this week to confront a so-called “fiscal cliff” at year’s end, many Republicans who have long dismissed any tax increase as unacceptable say they are willing to entertain higher revenue as part of a deficit-reduction deal -- so long as Democrats accept cuts in entitlement programs. This is particularly noticeable in the Senate, where Saxby Chambliss of Georgia and Bob Corker of Tennessee have said they’re willing to renounce their past anti-tax pledges.
While the verbal openness to taxes questions the hold of anti-tax advocate Grover Norquist on lawmakers who have signed his pledge against tax increases, Norquist calls the requisite deal for spending cuts “a pink unicorn.”
“The new change is in how Republicans are talking about taxes, not their substantive position,” said Keith Hennessey, who was an economic adviser to President George W. Bush. “Key congressional Republicans have repeatedly indicated they’re willing to agree to more revenue, and not just that which results from increased growth, if and only if entitlements are fixed and the tax code is reformed.”
[h=2]Fiscal Cliff[/h]The depth of potential Republican support for tax increases and the conditions attached to it will be tested over the next few weeks as lawmakers negotiate with President Barack Obama on an agreement to avert the automatic tax increases and spending cuts scheduled to take effect in January. Following elections that gave Obama a second term and Democrats added seats in Congress, Republicans still run the House.
As their price for considering a tax increase, Republicans are demanding structural changes to entitlement programs and an overhaul of the tax code. They say they are waiting for Obama and congressional Democrats to make an offer on spending.
Business groups could support a “balanced package” that doesn’t raise marginal tax rates and makes significant changes in entitlement spending, said Jade West, senior vice president for government relations at the National Association of Wholesalers and Distributors in Washington.
“The reality has set in and something has to be done,” said West, noting that many businesses pay taxes through their owners’ individual tax returns. “Clearly, the rhetoric reflects that status-quo election reality. I’m just waiting for something to come from the other side.”
[h=2]Questions Remain[/h]Significant substantive questions remain about what Republicans would accept. House Speaker John Boehner of Ohio has drawn a line at increases in marginal tax rates, suggesting that he could support limits on deductions or other ways of raising taxes on high earners that wouldn’t raise their rates.
At the same time, Boehner has said he wants to raise any additional revenue through economic growth and an overhaul of the tax code. His statements haven’t specified whether he is suggesting a tax increase as measured by congressional scorekeepers, who don’t allow revenue generated by economic growth from a tax overhaul to count in their estimates.
For years, the clearest distillation of the Republican position on tax increases has been a pledge written by Norquist, president of Americans for Tax Reform. Signers pledge to oppose tax rate increases and any limits on tax breaks that aren’t accompanied by equally sized tax rate cuts.
[h=2]Ranks Trimmed[/h]Their numbers have declined, while still a majority in the Republican-run House. In the 113th Congress that will convene in January, 219 of the 435 House members have signed Norquist’s pledge, according to Americans for Tax Reform. In the new Senate, 39 of the 100 senators are signers.
In the 112th Congress finishing its lame-duck business by year’s end and confronting that fiscal cliff, there are 238 signers of Norquist’s pledge in the House and 41 in the Senate.
Some pledge-signers, including Chambliss, Corker, Senator Lindsey Graham of South Carolina and Representative Peter King of New York, say they aren’t bound any more by the pledge.
“The only thing I’m honoring is the oath that I take when I serve when I’m sworn in this January,” Corker said on CBS News’s “This Morning” program today.
Pledge or not, Republicans generally oppose tax increases and claim a mandate for their stance from their re-election to a majority in the House, even though Democrats won 1 million more votes than Republicans nationwide. Many House Republicans don’t share the openness of some senators to higher taxes.
[h=2]Problem-Solving[/h]“It is not about that pledge,” Representative Eric Cantor of Virginia, the House majority leader, said on MSNBC’s “Morning Joe” today. “It really is about trying to solve problems.”
He and other Republicans weren’t re-elected to “raise taxes,” said Cantor, adding that he hadn’t talked to Norquist and didn’t know “what he wants to do with his pledge.”
Over the past few years, some Republicans have made or endorsed several deficit-reduction proposals that would include higher taxes.
Three Senate Republicans, including Mike Crapo of Idaho and Tom Coburn of Oklahoma, supported a 2010 proposal from Obama’s fiscal commission. That panel, led by Erskine Bowles and Alan Simpson, endorsed letting tax cuts on top earners expire and then raising about $1 trillion on top of that.
In 2011, Boehner and Obama discussed an $800 billion revenue increase. That same year, Senator Pat Toomey of Pennsylvania made an offer during the deficit-reduction supercommittee that would have included higher revenue.
“Republicans in the Senate have moved toward a net increase through tax reform some time ago,” said former Representative Vin Weber of Minnesota, who was an adviser to presidential candidate and Norquist pledge-signer Mitt Romney. “It’s a big change.”
[h=2]‘Pink Unicorn’[/h]Still, none of the proposals with Republican support have been turned into legislative language and brought up for a vote.
At this point, Norquist said today on CNN, those are just “impure thoughts” and not action. Democrats, he said, aren’t offering the kinds of entitlement program changes Republicans are demanding as their price for higher taxes.
Norquist recounted a conversation with Graham about the South Carolina senator’s potential support for tax increases.
“I said, senator, you’re offering to trade a tax increase for a pink unicorn that doesn’t exist,” he said.
Warren Buffett, the second-richest man in the U.S., pressed his call for more taxes on the wealthy by mocking the idea that higher rates discourage investment. Legislators should increase taxes on those earning more than $500,000, including minimum rates of at least 30 percent on all income above $1 million, Buffett said in an opinion piece in the New York Times today.
“Let’s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if -- gasp -- capital gains rates and ordinary income rates are increased,” Buffett wrote. “Only in Grover Norquist’s imagination does such a response exist.”
To contact the reporters on this story: Richard Rubin in Washington at [email protected]; Heidi Przybyla in Washington at [email protected]
To contact the editor responsible for this story: Jodi Schneider at [email protected]
As Congress returns this week to confront a so-called “fiscal cliff” at year’s end, many Republicans who have long dismissed any tax increase as unacceptable say they are willing to entertain higher revenue as part of a deficit-reduction deal -- so long as Democrats accept cuts in entitlement programs. This is particularly noticeable in the Senate, where Saxby Chambliss of Georgia and Bob Corker of Tennessee have said they’re willing to renounce their past anti-tax pledges.
While the verbal openness to taxes questions the hold of anti-tax advocate Grover Norquist on lawmakers who have signed his pledge against tax increases, Norquist calls the requisite deal for spending cuts “a pink unicorn.”
“The new change is in how Republicans are talking about taxes, not their substantive position,” said Keith Hennessey, who was an economic adviser to President George W. Bush. “Key congressional Republicans have repeatedly indicated they’re willing to agree to more revenue, and not just that which results from increased growth, if and only if entitlements are fixed and the tax code is reformed.”
[h=2]Fiscal Cliff[/h]The depth of potential Republican support for tax increases and the conditions attached to it will be tested over the next few weeks as lawmakers negotiate with President Barack Obama on an agreement to avert the automatic tax increases and spending cuts scheduled to take effect in January. Following elections that gave Obama a second term and Democrats added seats in Congress, Republicans still run the House.
As their price for considering a tax increase, Republicans are demanding structural changes to entitlement programs and an overhaul of the tax code. They say they are waiting for Obama and congressional Democrats to make an offer on spending.
Business groups could support a “balanced package” that doesn’t raise marginal tax rates and makes significant changes in entitlement spending, said Jade West, senior vice president for government relations at the National Association of Wholesalers and Distributors in Washington.
“The reality has set in and something has to be done,” said West, noting that many businesses pay taxes through their owners’ individual tax returns. “Clearly, the rhetoric reflects that status-quo election reality. I’m just waiting for something to come from the other side.”
[h=2]Questions Remain[/h]Significant substantive questions remain about what Republicans would accept. House Speaker John Boehner of Ohio has drawn a line at increases in marginal tax rates, suggesting that he could support limits on deductions or other ways of raising taxes on high earners that wouldn’t raise their rates.
At the same time, Boehner has said he wants to raise any additional revenue through economic growth and an overhaul of the tax code. His statements haven’t specified whether he is suggesting a tax increase as measured by congressional scorekeepers, who don’t allow revenue generated by economic growth from a tax overhaul to count in their estimates.
For years, the clearest distillation of the Republican position on tax increases has been a pledge written by Norquist, president of Americans for Tax Reform. Signers pledge to oppose tax rate increases and any limits on tax breaks that aren’t accompanied by equally sized tax rate cuts.
[h=2]Ranks Trimmed[/h]Their numbers have declined, while still a majority in the Republican-run House. In the 113th Congress that will convene in January, 219 of the 435 House members have signed Norquist’s pledge, according to Americans for Tax Reform. In the new Senate, 39 of the 100 senators are signers.
In the 112th Congress finishing its lame-duck business by year’s end and confronting that fiscal cliff, there are 238 signers of Norquist’s pledge in the House and 41 in the Senate.
Some pledge-signers, including Chambliss, Corker, Senator Lindsey Graham of South Carolina and Representative Peter King of New York, say they aren’t bound any more by the pledge.
“The only thing I’m honoring is the oath that I take when I serve when I’m sworn in this January,” Corker said on CBS News’s “This Morning” program today.
Pledge or not, Republicans generally oppose tax increases and claim a mandate for their stance from their re-election to a majority in the House, even though Democrats won 1 million more votes than Republicans nationwide. Many House Republicans don’t share the openness of some senators to higher taxes.
[h=2]Problem-Solving[/h]“It is not about that pledge,” Representative Eric Cantor of Virginia, the House majority leader, said on MSNBC’s “Morning Joe” today. “It really is about trying to solve problems.”
He and other Republicans weren’t re-elected to “raise taxes,” said Cantor, adding that he hadn’t talked to Norquist and didn’t know “what he wants to do with his pledge.”
Over the past few years, some Republicans have made or endorsed several deficit-reduction proposals that would include higher taxes.
Three Senate Republicans, including Mike Crapo of Idaho and Tom Coburn of Oklahoma, supported a 2010 proposal from Obama’s fiscal commission. That panel, led by Erskine Bowles and Alan Simpson, endorsed letting tax cuts on top earners expire and then raising about $1 trillion on top of that.
In 2011, Boehner and Obama discussed an $800 billion revenue increase. That same year, Senator Pat Toomey of Pennsylvania made an offer during the deficit-reduction supercommittee that would have included higher revenue.
“Republicans in the Senate have moved toward a net increase through tax reform some time ago,” said former Representative Vin Weber of Minnesota, who was an adviser to presidential candidate and Norquist pledge-signer Mitt Romney. “It’s a big change.”
[h=2]‘Pink Unicorn’[/h]Still, none of the proposals with Republican support have been turned into legislative language and brought up for a vote.
At this point, Norquist said today on CNN, those are just “impure thoughts” and not action. Democrats, he said, aren’t offering the kinds of entitlement program changes Republicans are demanding as their price for higher taxes.
Norquist recounted a conversation with Graham about the South Carolina senator’s potential support for tax increases.
“I said, senator, you’re offering to trade a tax increase for a pink unicorn that doesn’t exist,” he said.
Warren Buffett, the second-richest man in the U.S., pressed his call for more taxes on the wealthy by mocking the idea that higher rates discourage investment. Legislators should increase taxes on those earning more than $500,000, including minimum rates of at least 30 percent on all income above $1 million, Buffett said in an opinion piece in the New York Times today.
“Let’s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if -- gasp -- capital gains rates and ordinary income rates are increased,” Buffett wrote. “Only in Grover Norquist’s imagination does such a response exist.”
To contact the reporters on this story: Richard Rubin in Washington at [email protected]; Heidi Przybyla in Washington at [email protected]
To contact the editor responsible for this story: Jodi Schneider at [email protected]