Republicans Or Taxes: Which One Will Budge?

Will Republicans ever give us some breathing room on 2011 taxes?

The White House is desperately trying to persuade liberals that the debt ceiling deal is getting a horrible reputation under false pretenses.  This is quite understandable because there are always two sides to a coin, so to speak.  As a matter of fact, upon closer inspection of this deal, there may be some favorable attributes associated with it.

In general, there is a commission of twelve “Super Congress” members – a total of 3 from each respective chamber and party.  The liberals are addicted to criticizing their purpose to seal the $1.5 trillion second phase of cuts by Thanksgiving, which was bound to force some mandatory increases of revenue.  Even though the Bush tax cuts are now out of the picture, a bounty of corporate welfare programs, subsidies and other loopholes are currently available.  It’s definitely not easy to imagine a minimum of one Republican voting to keep corporate jet funding and then slash $500 billion from our country’s defense budget, despite the lack of offset revenues.  It all comes down to this question:  Are the Republicans more fearful of the joint chiefs or Grover Norquist?  If the Democrats were betting, then their money would be on the joint chiefs.

Let’s assume the debt ceiling deal is approved today:  in that case, the joint House/Senate committee has to recommend a brand new set of deficit reduction steps, which will provide the perfect venue for Democrats to seek after a more “balanced” approach.  This translates into revenue increases and spending cuts.  Because of the deal’s structure, if Congress refuses to accept its blueprint or the committee deadlocks, then automatic cuts will be triggered across the board – including a Defense spending reduction.  This will probably force the Pentagon-friendly Republicans to take demands for revenue adjustments from the Democrats a bit more seriously.

However, I wouldn’t fall for this just yet.  As usual, the primary conflict concerns the Tea Party, with its stubborn anti-anything-having-remotely-to-do-with-tax-increases orthodoxy.  This notion is shared by countless Republican House members, animating the GOP’s base, including its most influential commentators.  Speaker John Boehner had these members in mind while backing out of the major bargain discussions with President Obama.  This just goes to show that even the slightest revenue increases amidst substantial spending and entitlement cuts would prove unacceptable to the GOP conference.  These also happened to be the most difficult (or in some cases impossible) ones to win over as he pedaled his own second debt ceiling proposal last week.

In general, it’s important to remember that as far as these Republicans are concerned, defense spending isn’t nearly as sacred to them as it has been to GOP leaders, historically.  Last month for example, Mark Meckler, national leader of the Tea Party Patriots, said to Politico:

“Everything is on the table.  I have yet to hear anyone say, ‘We can’t tackle defense spending,’ or any other topic.
…Any tea partier who says something else lacks honor.”

In the same article, Georgia Representative Paul Broun, possibly the most influential Tea Party advocate of Congress, suggested he wouldn’t be opposed to defense cuts, arguing that the USA “cannot be a protector of the whole world.  We cannot do that any longer.  We don’t have the money to do it anyway.”  Incidentally, Republican Broun declined to vote with Boehner and the GOP regarding last week’s debt ceiling.  Therefore, it seems that Broun wouldn’t object to avoiding any type of tax increase if the price involved a cut in Pentagon spending.

I’m still not sure how prevalent Broun’s view is among his GOP supporters.  However, if a significant number of Republicans swing this way, it would be difficult to imagine the revenues changing under the deficit reduction committee.  If pushing for the acceptance of a tax increase plan, Boehner would still be alienating dozens of believers that already have a suspicious eye on him.

Now, this doesn’t necessarily mean that there aren’t Republicans who think that the Defense budget is a hefty matter.  Buck McKeon, California’s Armed Services Committee chairman, has been working all year to safeguard the military from any budget cuts.  But McKeon, who has been in the House for 2 decades, is not the one that Republican Boehner should be worried about:  it’s the Tea Party purists that require attention.

It’s also important to recall that another comparable commission was created under President Ronald Reagan during the Cold War with similar policies.  If Congress ignored it or the panel came to a deadlock, the Defense budget took a severe beating.  Yet, even back in those times when a strong national defense was most likely the focal point of settlement for all Republicans, both Reagan and the GOP decided to sign off on a more “balanced” plan, complete with Defense reductions.

If the Republicans gave in on Defense spending back then, it’s tough to imagine that they won’t do it again today, especially if the alternative is to pick a fight with the unwavering anti-tax Tea Party zealots.  Therefore, no matter what the White House says, I doubt that this new deficit reduction committee will accomplish what every other plan of action has failed to do thus far.  As far as increased revenues are concerned, the best bet lies towards the end of 2012, which marks the expiration of the Bush tax cuts.  Also, this depends upon whether or not the Democrats want to push a rate hike by doing nothing at all.