The growing GOP tax-cave chorus?

posted at 9:31 am on December 10, 2012 by Erika Johnsen

Last week, Sen. Rand Paul elucidated a possible fiscal-cliff route to which an increasing number of Republicans seem to be edging: Obama based much of his campaign on hiking taxes on families making more than 250k/year, and America went ahead and reelected him. So, go ahead and let the Democrats raise taxes, and then it will be clear which party will be to blame for whatever economic backlash comes afterward.

Over the weekend, a couple more GOPers endorsed a form of that potential scenario, admitting that Republicans have a pretty weak hand right now and that letting taxes increase would force Democrats to take full ownership of their policies. Sen. Tom Coburn said he would agree to capitulate on raising taxes if significant spending cuts were a part of the deal, and Sen. Bob Corker proffered that letting taxes go up would then bring the major focus back to entitlement reform, via the WFB:

A lot of people are putting forth a theory and I actually think it has merit where you go ahead and give the president the two percent increase, that he is talking about, the rate increase on the top two percent and all of a sudden the shift goes back to entitlements, and all of a sudden once you give him the rate on the top two percent, it is actually much lesser tax increase than what he has been talking about. The focus then shifts to entitlements and maybe that puts us in a place where we actually can do something that really saves this nation, so, there is a growing body, I actually am beginning to believe that is the best route for us to take, to, again, shift the focus where it needs to be which is on entitlements…

The obvious questions still being, will low-information voters necessarily blame Democrats for the negative economic effects of tax increases? With the president’s rather amazing capacity for spinning/campaigning, it looks like Republicans may be damned-if-they-do, damned-if-they-don’t unless they seriously step it up on their hitherto lackluster PR-game. And another: Once taxes go up to “Clinton-era levels” (although, combined with the new taxes from ObamaCare, effective taxes will actually be higher), where’s the assurance that the Democrats will then honest-to-goodness, cross-my-heart-and-hope-to-die be on board for mega-entitlement reform? The WSJ posits that there doesn’t seem to be any, and the GOP has more leverage right now than they think they do:

But what is the evidence in the last four years, or even since the election, that Mr. Obama won’t pocket that victory and then refuse to offer any but token changes on entitlements? Mr. Corker has proposed several specific and laudable entitlement changes, but note how Mr. Obama has declined to support a single one of them in public. After he has GOP fingerprints on tax rate increases, Mr. Obama is more likely to make Republicans trade onerous defense cuts for entitlement changes that are far less consequential than Mr. Corker has proposed. …

For all of his bluster about blaming Republicans, Mr. Obama also knows a budget failure would do enormous harm to his chances of second-term success. It would guarantee at least two more years of trench budget warfare and poison the chances of immigration or other reform. Another recession would be on his watch, not on George W. Bush’s.

The point is that Republicans have more leverage than they imagine, and they ought to act like it. A good start would be for the House to pass a bill this week extending all the tax rates for six months and fixing the defense spending cuts coming in January. Then ask Senate Democrats to pass their own bill, and they can negotiate with the President under regular Congressional order.


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