By Alexander Bolton - 03/22/11 10:00 AM EDT
Republican leaders in the Senate and House will not agree to tax increases in the guise of reform measures, according to a prominent conservative advocate for lower taxes.
Conservatives have grown increasingly worried that Republicans in Congress may accept a tax hike as part of a broader deal to reduce discretionary and entitlement spending.
But Senate Republican Leader Mitch McConnell (R-Ky.) and House Speaker John Boehner (R-Ohio) have pledged to Americans for Tax Reform (ATR) president Grover Norquist they will not support any deficit reduction package that increases taxes.
However, conservatives say they have been burned before by budget deals that raise taxes in exchange for promised spending cuts that fail to materialize.
Norquist says Senate and House Republican leaders have promised not to allow history to repeat itself.
“I’ve talked to the Senate leadership and House leadership. They’re not voting on tax increases and they know that,” Norquist told The Hill Friday.
Norquist said he has received the same promise from Sens. Tom Coburn (Okla.), Mike Crapo (Idaho) and Saxby Chambliss (Ga.), who are negotiating a deficit reduction package with Democrats.
“I’ve talked to the three guys in the room and they’ve promised not to vote any tax increases," Norquist said.
Michael Brumas, a spokesman for McConnell, declined to comment on the leader’s private discussions on tax reform. He noted, however, that McConnell has said tax increases are not needed to reduce the deficit.
“I don't think we have a problem in this country because we tax too little. I think it's because we spend too much. And I think it’s clear, given the election last November, we will not be raising taxes,” McConnell said recently on MSNBC’s “Morning Joe.”
Michael Steel, a spokesman for Boehner, said: “Speaker Boehner has never voted for a tax increase, and that isn’t going to change.”
A spokesman for Coburn, however, disputed Norquist’s characterization of the conversation with his boss.
"Grover hears what he wants to hear. Dr. Coburn has been arguing for many years, in word and deed, that the problem is overspending, not under-taxation. That said, he strongly disagrees with ATR's belief that every distortion and corporate welfare subsidy in the tax code, such as that for ethanol, is a 'tax cut' that needs to be preserved,” said John Hart, Coburn’s communications director.
“Trusting Washington to pick winners and losers in the tax code should be anathema to conservatives,” Hart added. “ATR's odd definition of tax purity is an argument for tax deferment, tax complexity, more spending and unsustainable borrowing."
Aides to Crapo and Chambliss referred The Hill to a letter Crapo, Chambliss and Coburn sent to Americans for Tax Reform in February.
“Like you, we believe tax hikes will hinder, not promote, economic growth,” the lawmakers wrote, defending their talks with Democrats over entitlement and tax reform.
“Proposals that simplify the tax code, broaden the base, lower all individual and corporate tax rates, and make our corporate tax code more competitive for U.S. business will create a surge in economic growth, which will not only generate more income for the American people and businesses.”
They concluded by stating: “Our pledge is to protect taxpayers, not special interests,” in reference to the various special groups that benefit from targeted tax breaks.
Thirty-two Republican senators signed a letter to President Obama this past week urging him to embrace tax reform as a part of a deficit reduction package.
“Specifically, we hope that the discussion will include discretionary spending cuts, entitlement changes and tax reform,” the lawmakers wrote.
The GOP senators endorsed a report issued last year by Obama’s fiscal commission as a basis for a deficit-reduction package. Coburn and Crapo voted for the recommendations as members of the commission.
Thirty-two Democrats also signed the letter.
“As you know, a bipartisan group of senators has been working to craft a comprehensive deficit reduction package based upon the recommendations of the fiscal commission,” they wrote. “While we may not agree with every aspect of the commission’s recommendations, we believe that its work represents an important foundation to achieve meaningful progress on our debt.”
This has sparked concern among several conservative policy experts because Obama’s commission recommended raising $785 billion in new revenue over the next 10 years through tax reform. It also called for a 15-cent per gallon increase in the gas tax to fund transportation projects.
The fiscal commission achieved its projected revenues by eliminating or dramatically reducing targeted tax breaks, otherwise known as tax expenditures.
The commission did not specifically assume any portion of the $785 billion in revenue would come from higher economic output as a result of lowering the marginal income tax rates — which is called dynamic scoring.
“Conservatives should be deeply concerned that any deal to be struck will be heavy on tax increases and low on promised spending cuts,” said Brian Darling, director of Senate relations at the conservative Heritage Foundation.
“The big-picture problem now is conservatives are going to end up agreeing to increased taxes under guise of tax reform and all they receive is promised spending cuts that may not come to fruition,” Darling said. “I think that’s why you didn’t see all the conservatives sign onto to that letter.”
Daniel J. Mitchell, an expert on tax reform at the Cato Institute, said Republicans have been burned in budget deals with the Democrats in 1982, 1987 and 1990.
Mitchell noted that former President Reagan reportedly considered the 1982 budget deal and tax increase the biggest mistake of his presidency.
After Congress failed to uphold its commitment to cut spending by $3 for every $1 it raised taxes, Reagan remarked, “I’m still waiting on those $3 of spending cuts I was promised by Congress.”
Mitchell warns that Republicans in Congress today are headed toward a similar mistake.
“Like Ronald Reagan, Tom Coburn wants to do the right thing. But good intentions are not the same as good policy,” Mitchell wrote in a blog post. “America’s fiscal challenge is too much spending. Government is too big and it is wasting too much money. Taking more money from the American people is not the way to solve that problem.”