The Republican Party once had a home for the thinking of Tom Coburn, Mike Crapo and Saxby Chambliss. But that party is long gone.
The three U.S. senators banded together a few months ago in support of higher tax revenue as a means of balancing the federal budget. Even with drastic spending cuts, they concluded, Washington could not vanquish its soaring $14.3 trillion debt without additional income.
Such reasoning was common in the GOP circa 1963, when Republicans denounced tax cuts proposed by President John F. Kennedy as a road to red ink and rampant inflation. But today’s GOP adheres to a “no new taxes” orthodoxy that has proved far more powerful than the desire to balance the budget. As House Speaker John A. Boehner has said: Raising taxes is “unacceptable and a non-starter.”
This orthodoxy is now woven so deeply into the party’s identity that all but 13 of 288 GOP lawmakers in Congress have signed a formal pledge not to raise taxes. The strategist who invented the pledge, Grover G. Norquist, compares it to a brand, like Coca-Cola, built on “quality control” so that Republican voters know they will get “the same thing every time.”
Loyalty to the brand is so strong that no Republican has voted for a major federal tax increase since 1991, Norquist says. It is so widespread that more than a dozen governors and hundreds of state legislators now count themselves as adherents. And it is so well defended that its followers are constantly patrolling at both the state and federal levels for new forms of trespass.
In California, the pledge is interpreted to prohibit state lawmakers from asking voters to decide whether certain existing taxes should be extended. In Pennsylvania, the pledge is cited as a barrier to imposing an “impact” fee on the environmentally questionable business of extracting gas from underground shale.
On Capitol Hill, Norquist has admonished Coburn (Okla.), Crapo (Idaho) and Chambliss (Ga.) for suggesting a tax option for tackling the debt: reducing credits and deductions worth an estimated $1 trillion a year. Although most of the cash would be used to lower tax rates for everyone, a portion would be dedicated to restoring national solvency.
No good, says Norquist’s group, Americans for Tax Reform. Under the pledge, raising revenue in any way requires an equal tax cut elsewhere to avoid expanding the size of government. And, yes, that sometimes means protecting tax breaks that Republicans view as bad public policy, Norquist and his supporters say.
The GOP’s three-decade-old campaign against taxes has clearly had a significant impact. Neither major party would advocate a return to the 1970s, when people earning more than $200,000 a year faced a top rate of 70 percent. But the top rate is now half that and, partly because of the recent recession, tax collections have fallen to their lowest level as a share of the economy in 60 years.
Major tax cuts in 2001 and 2003 also contributed to the decline in revenue — and helped drive up budget deficits. Today, the spiraling debt ranks well ahead of too-high taxes on the list of economic concerns. And the GOP’s hard line on the issue stands, alongside Democratic resistance to cutting federal retirement benefits, as the biggest obstacle to a bipartisan agreement to tackle that problem.
“Grover’s not realistic,” said former senator Judd Gregg of New Hampshire, a self-described “Reagan robot” elected to Congress in 1980. Gregg retired last year after serving with Coburn and Crapo on the bipartisan fiscal commission that recommended stabilizing borrowing by trimming tax breaks and sharply cutting spending.
With the number of people on Medicare and Social Security set to double, Gregg said, “your government is inevitably going to grow. And you’re either going to have to finance that, or you’re going to end up running the country into the ditch.”
In recent weeks, prominent Republicans have urged a more flexible approach to taxes. Former Federal Reserve chairman Alan Greenspan joined the chorus Friday, dropping his support for the 2001 George W. Bush tax cuts. Greenspan told CNBC he’s so “scared” by the debt that he now favors a return to the higher rates of the Clinton administration.
Martin Feldstein, a Harvard economist who served as chief economic adviser in the Reagan White House, supports the commission’s approach to raising money by ending tax breaks.
“When the government gives a tax credit to homeowners who buy solar energy panels, it’s just like giving them a cash subsidy to buy those panels,” Feldstein wrote last week in the conservative Weekly Standard magazine, suggesting that the value of deductions and credits be capped at 2 percent of adjusted income.