Can Republicans agree to more tax revenue without violating Grover Norquist’s no-tax-hike pledge? The surprising answer: Maybe.
With the help of some budget magic, last week’s offer by Senate Republicans on the Joint Committee on Deficit Reduction to raise taxes by $250 billion as part of a $1.2 trillion deficit reduction package might not be a technical violation of Norquist’s pledge — even if it goes against its spirit.
The key is that Norquist’s Americans for Tax Reform pledge appears to leave room for politicians to say they are complying with it even if they are allowing taxes to go up. And with the Bush tax cuts set to expire in 2013, that’s potentially a big loophole.
So the Republican plan would be a small net tax increase if existing tax rates continue, but it would score as a giant tax cut — exceeding $3 trillion over the next decade — relative to letting the Bush tax cuts expire. Even President Barack Obama’s own budget — which would extend most of the Bush tax cuts except those for the wealthy — scores as a big tax cut on a current-law basis.
Norquist and ATR are refusing to say whether the GOP offer — crafted in large part by super committee member Sen. Pat Toomey (R-Pa.) — complies with the pledge.
“The Toomey plan is not written down, not in legislative language and not scored, so ATR doesn’t have a response to this negotiation proposal other than to notice that the Dems have announced they won’t support Toomey, so that is a dead letter,” ATR spokesman John Kartch said.
Pressed, Kartch said the hypothetical proposal “would appear to be a violation of the pledge,” and Norquist himself told National Review Online last week that the proposal probably doesn’t comply with it. Kartch said separately that continuing the Bush tax rates should not count as a tax cut.
“Some tax cuts and hikes are temporary because their proponents argued for them as temporary,” Kartch noted.
The “pledge has always been based on current policy,” he added.
Under that logic, voting against President Barack Obama’s proposal to extend and expand this year’s temporary payroll tax cut would appear to adhere to the pledge. But extending some but not all of the Bush tax cuts would violate the pledge.
Norquist surprised some earlier this year when he told the Washington Post editorial board that allowing the Bush-era tax cuts to expire would not violate the pledge. After the Post published his comments, he issued a statement saying that allowing the tax cuts to expire would indeed be a tax increase. But that statement did not say whether doing so would violate the pledge.
Instead, he said trading temporary tax cuts for permanent tax increases would violate the pledge. Republicans are proposing permanent tax changes, not temporary ones.
Liberal groups jumped on Norquist’s statement in July as a sign that his pledge has a giant loophole — one that could allow up to $4 trillion in tax increases over the next decade.
As noted by liberal blog Think Progress, Norquist himself has acknowledged that there are ways around his pledge.
“There are certain things you could do technically and not violate the pledge but that the general public would clearly understand is a tax increase,” Norquist said on MSNBC earlier this year.
Many House and Senate Republicans this year have publicly chafed under Norquist’s various interpretations of the pledge, and he has become Democrats’ favorite bogeyman as they seek to paint the GOP as beholden to the ATR front man.
If a deal is ultimately reached that raises taxes, Norquist’s final pronouncement on whether it violates the pledge could have an effect on whether any final package can pass Congress — and on Norquist’s own perceived power.
Earlier this year in the Senate, Norquist was faced with a potential mass repudiation of the pledge by Republicans led by Sen. Tom Coburn (Okla.) and backed by the Club for Growth. When Coburn forced a vote on an amendment killing an ethanol tax credit, Norquist scrambled to find a way to say pledge signers who voted for it were not violating the pledge. Norquist said that because Sen. Jim DeMint (R-S.C.) had proposed a separate amendment that cut taxes, Republicans were free to vote for the ethanol amendment, even though DeMint’s amendment never came up for a vote.
Norquist’s apparent gymnastics angered Republican ethanol backers. Coburn and many other Republican Senators, meanwhile, including Toomey — a former Club for Growth president — openly disagreed with Norquist. They contended that tax credits like the one for ethanol are merely wasteful spending programs.
Some Republican Senators, meanwhile, believe that they can increase revenue and keep their pledges at the same time.
“Revenues can be increased, no question about it,” Sen. Orrin Hatch (R-Utah) said.
“And you can do it in a variety of ways without breaking any pledges … including some of the ways they’ve come up with,” Hatch said of the Senate GOP super committee offer. Hatch said he hadn’t yet decided whether he would support the proposal.
Another conservative activist, who did not want to be named, predicted Norquist would find a way to bless a super committee deal if it looks like it will pass with majority Republican support.
“Once he says this is the line and people cross it, then that’s it,” the activist said of Norquist’s potential loss of clout.