Opinion: Tea Party lawmakers hold key to brewing GOP revolution on taxes

Is there a real Republican revolution taking place behind the scenes on Capitol Hill?

In the run up to the election, several Senate Republicans are openly talking about agreeing to tax hikes, or some revenue increases, to get a budget deal done.

They see a political trap for the president. 

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If he does not go along with the Republican plan – which uses formulas similar to the one set down by the independent Simpson-Bowles commission – the GOP senators envision voters blaming the Obama White House for failing to act in the national interest and reduce the federal deficit.

There is just one problem with this political strategy.

The Senate Republicans first have to convince the Tea Party freshmen in the Republican-controlled House to approve of any deal that includes tax increases.

Their best hope for persuading the House GOP to join the deal is the coming fiscal cliff of severe budget cuts that threatens to derail the nation’s slow-moving recovery.

That day of doom is the year-end deadline for implementing the Budget Control Act (BCA) that Congress passed one year ago, and which is scheduled to make a merciless cut through federal spending at the end of the year.

But facing fiscal calamity has not helped to bring the House GOP to its senses in the past.

Last year, House Republicans refused to raise the debt ceiling without dramatic spending cuts to domestic social programs. Their refusal to perform this routine duty – to quite literally pay the nation’s bills – resulted in an unprecedented downgrade of America’s credit rating by Standard and Poor’s.

The Government Accountability Office (GAO) released a report last month that said lenders charged the federal government an extra $1.3 billion last year because of the debt-ceiling debacle.

So here we go again with another manufactured budget crisis – sequestration, the automatic budget cuts of $1.2 trillion to domestic and defense programs set to begin in January.

Recall that House Republicans wanted this deal as a way to make a show of their insistence on cutting the deficit.

“The root cause problem here is the refusal of Republicans to acknowledge that the top 2 percent have to pay their fair share,” Jeffrey Zients, the acting director of the Office of Management and Budget, told the House Armed Services Committee last week.

House Republicans told Zients the whole problem is the president’s, for not getting Senate Democrats to go along with a House bill to undo sequestration that does not include any new taxes or revenue – just spending cuts.

Tax increases, or “revenue enhancements,” are a non-starter with most Tea Party Republicans. They are bound by the Taxpayer Protection Pledge, set by Grover Norquist of Americans for Taxpayer Reform, which bans any hike in taxes under any circumstances.

This pledge and the Republican adherence to it has been the primary obstacle to resolving the sequestration cuts.

But faced with the prospect of these dramatic cuts, several influential Senate Republicans want to dump the pledge.

Sen. Lindsey Graham (R-S.C.) recently told The Hill that he is willing to take the political risk of pressing House Republicans to use the 3-to-1 ratio of spending cuts to tax hikes in the Simpson-Bowles plan.

That will require Republicans to agree to raise $40 billion or $50 billion in new revenues.

“It’s going to be easier to get Democrats’ help with the $60 billion or $70 billion that we’ll have to find throughout the other parts of the government.”

Similarly, Senate Minority Whip Jon Kyl (R-Ariz.) told the Fiscal Times last month that he is working with his colleagues to find a resolution to the cuts.

“There are many, many ways to do it,” Kyl said.

“Obviously Republicans don’t think it would be very good for the economy to be raising taxes at this point. But there are other revenues in the way of fees, and so on, that the government collects.”

And Sen. Pat Toomey (R-Pa.), the former president of the Club for Growth, said at a Brookings Institution forum last month that higher taxes have to be part of the discussion.

"It's not clear to me that there may be another way to do it in the future.”  

Toomey, a Tea Party favorite, called for raising revenue by capping tax deductions and closing loopholes.

In a July op-ed for the New York Times, Sen. Tom Coburn (R-Okla.) said that Norquist and the no-tax pledge are becoming “increasingly isolated politically.”

Coburn wrote that a "majority of Democrats and Republicans understand the severity of our economic challenges, they know they have to put everything on the table and make hard choices. Legislators who would rather foster political boogeymen only delay those critical reforms."

By telling House Republicans they are setting a trap to embarrass President Obama, the Senate Republicans may get some traction for their proposal to raise taxes.

But will it be enough motivation to get House Republicans to stand up to Norquist, abandon the no-tax pledge and solve the problem they helped to create?