Wednesday, April 06, 2011

Forget Ryan -- watch Coburn and Chambliss

For those who believe that Obama has failed a s test of courage by not rolling out a detailed tax reform/deficit reduction plan early this year, a thought experiment: had he done so, would Tom Coburn have said this on the Senate floor? (link is to Greg Sargent; emphasis is his.)
Well, the message for America today is every program’s going to get hit. The Defense Department’s going to get hit, every program’s going to get hit. My taxes are going to go up. Sorry, they’re going to go up. This country cannot get out of this mess with the behavior that we’re exhibiting in this body, and if we fail to do what is necessary for our country at this critical time in our juncture, history will deem us absolutely incompetent. With that, I yield the floor.Maybe...I admit that the thought experiment yields no clear results.  But if Obama and Dems really do want a tax reform/deficit reduction deal, it's Coburn Chambliss & Crapo who are carrying the ball. Because this can't happen unless Republicans sign on to tax reform that raises revenues.  Which is almost to say that it can't happen, period.
The sine qua non for a bipartisan long-range budget deal is for Republicans to acknowledge that taxes will have to be raised, albeit as part of a deal that lowers marginal rates while drastically reducing targeted tax breaks. The bipartisan Senate Gang of Six currently negotiating the outlines of a deal is allegedly using the Bowles-Simpson plan as a baseline. While Bowles-Simpson was  criticized from the left for achieving too high a percentage of its projected deficit reduction from spending cuts (two thirds) as opposed to taxes (one third), the plan did envision raising Federal revenue by about $1 trillion over nine years.  Grover Norquist, meanwhile, is waving his bloody-sheet "no tax increases" pledge, signed by (he claims) 95% of House and 87% of Senate Republicans.

An Obama plan would have to raise taxes more than Bowles-Simpson does.  As soon as it was out, Republicans would start howling about Democrats' passion for tax hikes, forecasting the end of America if Democrats left the door open for taxes to take up, say, 23% of GDP in 20 years (rather than embracing the unworkable 21% cap imposed by Bowles-Simpson).  Once we're in that screamfest, the chances of Republicans signing on to any tax increase goes to precisely zero.

With their pushback against Norquist's tax pledge (chronicled here: (1, 2, 3, 4), Coburn, Saxby Chambliss and to a lesser extent Mike Crapo, the Republicans in the Gang of Six, are carrying the ball for Obama (and the nation) right now.  That is as it must be. The odds are long that they can carry their Senate colleagues, let alone the House lunatics, into a compromise that raises revenues.  But only they can do it. 

Obama, be it noted, likes to weigh in late in Congressional negotiations. He staged the marathon bipartisan healthcare summit three weeks before the PPACA passed after a nearly year-long marathon of bill drafting and merging.  The tax cut deal last year was announced on Dec. 7.  We don't know whether he'll pull a 2011 budget deal out of the fire in the next three days, but right now he's pushing hard, as he did in the health care endgame. If he goes after a comprehensive budget deal, it will probably be on this pattern.

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