Will Republicans Cave On Taxes If Obama Wins?
Republicans will have some choices to make if President Obama is re-elected.
According to The Washington Post, some senior Republicans seem to be hinting that they will likely have to throw in the towel on resistance to any tax increases if the President wins re-election in November:
Senior Republicans say they will be forced to retreat on taxes if President Obama wins a second term in November, clearing the biggest obstacle to a deal with Democrats to defuse a year-end budget bombthat threatens to rock the U.S. economy.
Republicans have long resisted tax increases of any kind. But taxes are a major battleground in the campaign between Obama and Republican Mitt Romney, Capitol Hill veterans say, and the victor will be able to claim a mandate for his policies.
“This is a referendum on taxes,” said Rep. Tom Cole (R-Okla.), a senior member of the House Budget Committee. “If the president wins reelection, taxes are going up” for the nation’s wealthiest households, and “there’s not a lot we can do about that.”
With Election Day still more than six weeks away and the president holding a thin lead in national polls, Republicans say they are not conceding that an Obama victory is the likely outcome. But they are beginning to plan for that possibility.
Lawmakers expect to leave town Friday and will not return until mid-November, when they will have little time to head off $500 billion in automatic tax increases and spending cuts set to take effect Jan. 2.
If Romney wins the White House, Republicans say, their strategy is clear: They would push to maintain current tax rates through 2013, giving the new president time to draft a blueprint for overhauling the tax code and taming the $16 trillion national debt.
But if Obama wins, the GOP would have no leverage — political or procedural — to force him to abandon his pledge to raise taxes on family income over $250,000, according to senior Republicans in the House and the Senate.
So they are beginning to contemplate a compromise that would let taxes go up in exchange for Democratic concessions on GOP priorities.
At the very least, that would mean protecting the Pentagon from the budget ax, which is set to whack $55 billion out of national security accounts next year. But it could also mean major changes to Medicare, which many Republicans said could quickly become the new front in the partisan battle over the budget.
“I hope, obviously, the status quo doesn’t prevail” on Nov. 6. “But if things stay as they are, and all the players are generally the same . . . finding a responsible reform for Medicare is the secret to unleashing very productive talks that would put in place a balanced solution to our fiscal problems,” said Sen. Bob Corker (R-Tenn.). “If you deal with the Medicare issue, then Republicans are far more open to looking at revenues.”
Difficult details would have to be hammered out. And any compromise would face head winds in the House, where a large bloc of GOP freshmen opposed new taxes during a messy fight to raise the federal debt limit last summer.
Many say they that are still not ready to agree to higher taxes and that they will press to maintain tax rates for families at all income levels no matter who wins the White House.
“As long as we have control of the House, I’m going to be really surprised if we capitulate on what’s essentially a core fundamental of conservative orthodoxy,” said Rep. Trey Gowdy (R-S.C.).
“We were sent here to fight, and I don’t think that message changes,” added Rep. H. Morgan Griffith (R-Va.).
There’s more fertile ground in the Senate, where even some ardent conservatives say Republicans may have no choice but to throw in the towel on taxes if they want to persuade Democrats to spare the Pentagon budget.
“We’re not going to save our defense unless we go along with the president’s wishes to raise taxes on small business,” said Sen. Jim DeMint (R-S.C.), a leader of the tea party movement. “It’s not a good choice. I would never support it. . . . [But] there are enough Republicans, I think, who are so afraid of defense cuts that they would probably give in.”
So, what’s going on here? What happened to the “no tax” unity of the House GOP Caucus? And, why is Jim DeMint of all people basically admitting defeat if the election doesn’t go the GOP’s way?
One possibility is that House and Senate Republicans are simply trying to frame an issue for the elections and motivate the base by letting them know that, if the GOP loses in November, there will be no choice but to give in to the President on things like raising taxes for people earning $250,000 per year and above. I suppose this is possible, but if that’s what they’re up to, this is a really odd way to send the message. Rather than a warning this sounds for all the world like a concession, and the fact that it’s coming even from people like Jim DeMint suggests that there’s something else going on.
This leaves open the possibility that there really are Republicans on the Hill who are willing to talk tax increases if the President wins re-election and the status quo is maintained. Of course, that doesn’t mean every Republican in Congress is going to toss out the Norquist pledge in order to achieve some kind of deal to avert the “Fiscal Cliff.” The article already notes several House Freshmen who seem unwilling to back down, and I doubt you’ll see people like Michele Bachmann joining people like Congressman Cole any time soon. However, the House GOP could afford to lose some of those Freshman and still get a bill passed with Democratic support, and given that the Senate is likely to be close regardless of which party wins the majority, a handful of Republican Senators switching sides would be all that was needed to get the bill passed. You can judge for yourself how realistic this scenario is, but it’s certainly possible if the sentiments that Cole and others are shared by a sufficient number of Republicans.
Not surprisingly, there are many on the right who are already in something of an uproar about these rumors. One blogger on the right argues that there’s no reason at all for the GOP to give even an inch if the President is re-elected:
If the status quo prevails on November 6th, we’ll have basically the same makeup we had after the 2010 midterms: A Democrat President and Senate, and a Republican House. Did the Republicans capitulate then? The answer is no. They forced Obama to accept a 2-year extension of the current tax rates. Why, then, will they have less leverage to do so if Obama wins in November.
(…)
If Obama does succeed in enacting a massive tax increase on job creators in this awful economy, why would Republicans want to walk the plank with him? If Obama raises taxes as he wants to do, the economy will surely tank and, and all the blame will lie with Democrats. Any Democrat who voted for this crap will face the wrath of voters in the 2014 midterms (see 2010). Let Democrats own the tax increase. If, however, Republicans commit political hari-kari and willingly cut a deal to go along with this crap, they will not only have given Democrats immunity on what will likely be a key issue in 2014, but will have demoralized the conservative base as well.
If one wants to continue to political warfare of the past two years, then I suppose this is the strategy that one must follow. The problem is that the nation faces some serious issues long before the 2014 elections. At the end of this year, one of three things will happen, either all of the Bush tax cuts will expires, only some of them will expire, or none of them will expire. Similarly, at that same time, Congress has to decide whether to allow the sequestration cuts to start going into effect or to come up with some alternative acceptable to all sides. There is universal agreement that doing nothing, allowing all the tax cuts to expire and the sequestration cuts to go into effect at the same time, has the potential to throw the economy into a recession. Unless the GOP wins the Presidency and somehow magically manages get a majority in the Senate, which seems rather unlikely at this point, they are going to have to deal with a Democratic President and a Democratic Senate in trying to resolve these issues. And, if the President wins re-election who do you think is going to have the better bargaining position at that point? Conservatives who think that this next showdown would be a repeat of 2010, are, I think fooling themselves.
Paul Mirengoff argues that Cole’s position is without merit because taxes are not going to be an issue in the election:
[T]he election is not a referendum on taxes. There are many other issues in the election, and non-tax matters can easily explain the small lead Obama appears to hold. An Obama victory would be driven, the polls show, by his support among single women. Thus, the election could plausibly be viewed as a referendum on the alleged Republican “war on women.”
Obama also holds a clear edge when it comes to “foreign policy.” The fact that Osama bin Laden was killed on Obama’s watch, and with his approval, could explain a narrow Obama victory in November. Indeed, the best distillation of the case for Obama comes from Joe Biden (of all people): bin Laden is dead and GM is alive. The election can easily be viewed, then, as referendum on killing bin Laden and bailing out GM.
When it comes to purely economic issues, polls generally show that Obama holds no edge over Romney; if anything disapproval of Obama’s economic policies and positions are keeping Romney in the hunt. Thus, the election should not be viewed as a referendum on tax policy.
Given that the candidate’s tax plans are likely to be a central point of discussion during October 3rd’s domestic policy debate, and that the President has spent the better part of the campaign so far highlighting the differences between him and Governor Romney on tax policy, I can’t see how you can argue that taxes will not be an issue in this election. Voters are being presented with a clear choice on the question of how to proceed on tax policy. If they end up re-electing President Obama, he is going to argue that it is in part an endorsement of his position, and he’d have merit in making that argument. Furthermore, the Romney advantage on the economy that Mirengoff speaks of has largely disappeared according to all recent polling and that is likely one of the main reasons that the President has risen in the polls over the past two weeks or so. Tax policy may not be the sole issue of the election, but it’s certainly part of the respective candidate’s economic messages and, if the voters choose one candidate over the other, doesn’t that say something about where the voters stand on tax policy? I would argue that it does.
If this election plays out the way I think it will, we will likely end up with a situation in Washington rather similar to what we have now, a Democratic President, a narrowly Democratic Senate, and a Republican House. At that point, leaders in both parties are going to have to decide whether it’s more important to continue playing political games or to sit down and deal with our nations fiscal problems. For Republicans, like it or not, that is going to have to mean giving up Grover Norquist enforce tax orthodoxy that has been motivating them the last several years. We don’t have time anymore to play the “use this to our advantage in the next election” game. It’s time to get serious and actually govern. Starting in December, we’ll likely see how serious Republicans are about doing that.
A very nice article, Doug. Here’s hoping pragmatism emerges from its burrow.
Speaking of pragmatism, Michael Gerson pulls no punches with regards to the political and moral collapse of the GOP:
http://www.washingtonpost.com/opinions/michael-gerson-a-republican-mind-set-without-promise/2012/09/20/798901f8-0344-11e2-91e7-2962c74e7738_story.html
The coming Obama landslide will largely hit the reset button on many fronts. 40 days out, and the GOP is on the brink of open civil war.
Win the House
Keep the Senate
Change the rules
Govern without the f*ckers
Today’s Republicans show no interst in, or capacity for, actually governing.
I hope that will change…but see no reason it will. Maybe the adults in the party…like Tom Colburn…will come to the fore. More likely the children…like Ryan and Cantor and Paul…will continue to run the party into the ground.
Doug, if you weren’t convinced by the last two years that the Republicans weren’t serious about governing, then nothing will convince you.
The House Republicans are conservative idealogues elected by conservative idealogues. Count me in as one of those who sees continued gridlock if the Republicans retain the House. You want pragmatism? Elect a Democratic House.
I love these bold Republicans announcing they might be willing to talk about taxes as long as the Democrats allow them to destroy Medicare.
Just wondering: What leverage do they think they have? The Bush tax cuts are expiring. Period. Taxes are going up, either on the rich or on everyone. If Obama’s reelected, there’s no way he’s going to let them be extended again, and there’s no way the Rs can override his veto.
So they’re blowing smoke. They’re in danger of losing the House, and Reid’s pretty clearly going to push for a major change in Senate rules, so that sociopaths like Rand Paul can no llonger shut down all business for one of his masturbatory fantasies. Unless something major changes the trajectory of this election, the Republicans are about to spend two years reaping what they’ve sown since 2010. And it couldn’t happen to a nicer bunch of people.
“At that point, leaders in both parties are going to have to decide whether it’s more important to continue playing political games or to sit down and deal with our nations fiscal problems.”
The political game used to include compromise; in fact, it was the political game. See Tip O’neil and Reagan; Bush 2 and Kennedy on Education. On the other extreme, the Republicans under Newt shut down the government under Clinton. Voters have to punish intransigence, unless they want it. I vote for problem solving.
@Me Me Me:
But then the question is how fill the U.S. function as a one party state. Who will be the winners, who will be the losers,and what will be the long term effects. If you look at politics in current day California, being a one part state does not solve the structural problems that exist today. Of course, if the Democrats control everything, will the Democrats still be able to blame George Bush for all of the problems?
@C. Clavin:
The day that the Republicans in the House vote for a tax increase, is the day that conservative parties become extinct in the U.S.
If politics is going to be about entitlement spending, how to fund it, and who gets what goodies, then politics in the coming one party state will not be pleasant.
@superdestroyer:
California certainly is not a one party state.
Is today opposite day?
The situation:
Superduper…
Today’s Republicans are not Conservatives by any stretch of your partisan imagination.
Seems like there are two questions here – how will the current Republican congresscritters deal with post election fallout during their Nov/Dec rump session, and what happens after January, when Democrats are very likely to hold presidency and Senate, and have an increasingly good chance of flipping the House. As comprehensive as your speculations are, Doug, you haven’t really dealt with how the GOP will act if it is minority party in both sides of Congress. What do you think?
Here in California, Prop. 213 in 1978 introduced the concept that it takes 2/3rd majority to raise taxes but only a majority to spend.
So California has been charting the path that the federal government is now following, under the Republican “Spend and Borrow” philosophy.
With predictable results.
Prop 13, rather.
@john personna:
The 2/3 requirement for a state budget was eliminate two years ago. http://ballotpedia.org/wiki/index.php/California_Proposition_25,_Majority_Vote_for_Legislature_to_Pass_the_Budget_(2010)
However, California did pass Prop 26 that added a requirement of 2/3 votes to raise any taxes or fees. http://www.ballotpedia.org/wiki/index.php/California_Proposition_26,_Supermajority_Vote_to_Pass_New_Taxes_and_Fees_(2010)
Blaming Republicans for the Democrats not passing balanced budgets ended two years ago.
@C. Clavin:
But the Republicans are closer to being conservatives than the Democrats. Raising taxes and throwing money at every problem that comes along is not conservatives. When the U.S. becomes a one party state, the only restraint there will be on taxes and spending will be the the populations refusal to comply with the tax rules.
@superdestroyer: “But then the question is how fill the U.S. function as a one party state.”
AAAAAAAAAAAIIIIIIIIIIIIIIIIIIIIIEEEEEEEEEEEEEE!!!
I’ve seen estimates that had Romney not manipulated his latest tax return for PR value he would have paid a 10% effective rate. That puts the lie to Republican claims of tax rates crippling the economy. We have extremely low taxes…and an extremely large debt. To not see the casual link is just ignorance. Republicans can continue to be ignorant…and being the problem…or they can contribute to the solution. Reagan raised taxes and the world went on. Bush41 raised taxes and the world went on. Bush43 only cut taxes…and the world ended…metaphorically speaking. It’s time for Republicans to grow up. Can they?
@ Super…
Republicans are not even close to Conservative.
Obama is the only Conservative in this race.
Cut taxes on 95% of the country.
Flattened Government spending.
Reduced the size of Government.
Killed OBL.
You want Conservative…there’s only one choice open to you.
@superdestroyer:
Eliminating one of the 2/3s rules got us half way there.
Leaving it on the tax side puts us just where the federal argument is. “Compromise” is defined as a spending side ONLY solution.
@C. Clavin:
The tax cuts are temporary. Everyone’s social security taxes are going up in January. I remember when Democrats used to attack Republicans for “messing” with social security. In addition, the only way to close a one trillion dollar budget deficit is to raise taxes on everyone. Since the Democrats have shown zero interest.
The spending curve has been lowered because the government has not started any new programs during President Obama’s first term. However, as the ACA begins full implementation, the full costs will come out. In addition, all of the rent seekers will begin requirements for coverage that will drive costs up.
The federal government has not decreased and state and local government will grow again if the economy ever recovers.
The idea that federal spending will stay less than 25% of GDP is laughable. Eventually taxes will have to increase to coverage all of the costs of the growing entitlement state. As the U.S. becomes a one party state, politics will about getting more benefits while sticking others with the bill. There is no need for two political parties to fill that function.
This country’s in trouble. I have an idea concerning tax reform – it is not new. It is the sales/value added tax. Eliminate income taxes. The advantage to this is that it brings everyone into the tax system. It eliminates tax brackets, loopholes, special deductions, etc. I would have a few exemptions (see list below). It eliminates the government trying to control people and their behavior through a set percentage on everything: no extra luxury, soft drink, movie, sports, jewelry and other ridiculous gimmick taxes. It also stops this nonsensical, diversionary, sideshow, worthless arguing over who pays what taxes and how much. Everyone pays the same. Most states have a sales tax and you never hear fussing over fairness. This would bring everyone into the tax system, unless there is somebody out there living in the wilderness who never buys anything.
My list of exemptions: medical, school supplies (paper, crayons, pencils – just the basics, not a $2000 laptop), and some energy saving items. There may be some other items that might qualify. Let’s do away with the current, divisive, controversial tax system.
@Tyrone:
Here’s the basic question, Tyrone. Do you think you would pay less total tax under a national sales tax? Do you think all of us here would?
If no, what’s the point? If yes, where does the money come from?
United State is in BIG Trouble and 16 Trillion is a big lump sum of money the USA families have to pay back. Obama has made it clear. He will borrow money until his second term is over if he win another 4 years. The USA will be broke. Mitt Romney is the only one that can fix this country. We have to pay down the debt and create jobs. Remember jobs are being create in India,Pakistan and China. In my view Obama has fail as “Commander-in- Chief”. Other countries are burning the USA FLAG. Which the USA Military has fought for many years? Our nation has given our Tax Dollars to so many countries that our elected people forgot about the USA people in my view. Don’t want to move Forward with Obama? “Obama has fail and has made the USA a” Laughing-stock” all over the media.
Interesting:
@NInfa Carpenter: What is worse – your math, your grammar, you formatting choices, or your logic? I can’t decide. So I’ll just make this simple observation: Romney will also “borrow money until his second term is over” if given the chance. In fact, the deficit will go up even more under him.
@NInfa Carpenter:
PolitiFact says that Romney would actually add more to the deficit.
@john personna:
But another reason that the U.S. will soon be a one party state. If neither party is willing to be responsible for spending, then the U.S. only needs one party. Chicago only needs one political party to tax the commuters and pass out the dollars to the public sector workers in Chicago. If there is no real control of spending, then the U.S. can function the same as Chicago.
@john personna:
But the current rules means that the state can spend all of the money that comes in during a boom. California can easily function as a one-party-state where the only problem to deal with is the ratchet effect.
Hold the phone
Other countries are burning the USA FLAG?
F it guys, let’s all vote Romney now.
I’m convinced.
@superdestroyer:
I really don’t get why why you miss the fundamental dynamic. Once a country has settled into a two party state, the names will remain the same as the parties change. They must if they are to maintain “the split’ and have competitive elections.
Fund raising is for the promise of winning.
Any party which wants a check in the mail (and they all do) must try to win.
Mitt Romney will continue to borrow, just as every single president has, and every single president will. Obama is not unique here. Sweet Jeebus, people.
@superdestroyer: This bogey man of yours – that the United States will become a “one-party state” if the Republicans lose the WH and majority control of the Senate and the House – is not only not scary, it is trite and boring. The unpopular party serving up nothing but failed ideas and repulsive personality becomes the minority party until it reforms – that is the way the system works. A new era of Soviet-style tyranny is not ushered in because people wise up to the facts that the Republicans are clueless twits who reside in a fantasy world.
@NInfa Carpenter:
We don’t owe a “lump sum”. Please educate yourself about Treasury Bills.
Hmmm . . . let me think about this. Congressional Republicans speaking about compromise well in advance of actually voting on that compromise . . . when have I seen this before?
Oh, yes, right. During the year-long battle to pass the ACA. When “stand-up guys” like Chuck Grassley would state on Monday that he would be open to an ACA feature, then find the same measure completely outrageous and unacceptable by Friday. It’s a ploy to capture the Mayfly Memories of the Media into thinking ‘well, now they’ll be more open to compromise’. Baloney.
Look, Barney Frank called this one very well: half the GOP is afraid of Michele Bachmann, and the other half is Michele Bachmann. Any Congressional Republican that votes in favor of a tax increase will be pilloried by the Limbaughs and primaried out of a job, whether it’s a nincompoop like Gohmert or a pillar like DeMint.
The Republicans have no leverage-taxes are going up no matter what- they are saying what they are saying precisely to get some leverage.
@john personna: Fair question. Many of the country’s leading economists have run some numbers and are of the opinion that since this would broaden the tax base some of the people who have not been paying income taxes would pay more, some who have been paying would end up paying less. It would depend a lot on buying habits and how much money you have or want to spend. Sales tax on a Honda Fit would be a lot less on a Jaguar or Lexus. Consumer’s choice. I will look for some figures on this based on studies that were done a while back. I remember Sen. Moynihan was a proponent of this. And no confusing tax forms to try and weave our way through.
I would also add that non-profits (charities, philanthropies, churches, etc) would have their yearly sales taxes refunded.
Doug wrote: “We don’t have time anymore to play the “use this to our advantage in the next election” game. It’s time to get serious and actually govern.”
True, but doesn’t this also mean you don’t have the luxury of throwing your vote away on a 3rd party candidate in a swing state? If you truly believe that these matters are as serious as you say they are, then why aren’t you supporting the candidate and the party that you believe will be better (or less worse) for the country?
Cave is where they live, not what they do.
NInfa Carpenter is a classic example of the kind of voter who sent the Tea Party morons to Congresss in 2010. Hell, she is a classic example of that Tea Party moron. How in the world can you talk about working out rational compromises with such bozos infesting Congress? Its clear that you can’t reason with folks like that-you can only replace them.
I’m hoping that everyone commits to getting out the Democratic vote in November. Talk of hoping that the Republicans will “come to their sernses” and “accept rational compromise” is sheer fantasy. If you doubt that , just re-read Ms. Carpenter’s post.
@superdestroyer:
Lowering taxes and throwing money at every problem that comes along is?
There is really no way of reasoning with people that think that Romney will succeed where Obama has failed. Especially in the areas of spending and debt reduction.
OMG THE DEBT! THINK ABOUT THE DEBT! THINK ABOUT OUR CHILDREN! AND OUR CHILDREN’S CHILDREN! AND OUR CHILDREN’S CHILDREN’S CHILDREN!
…
And what is their response to that?
We must elect a man willing to increase the already bloated defense spending in this country AND cut taxes even further so the deficit problem gets even harder to solve.
@Me Me Me:
Has the Republican Party reformed to be competitive in Chicago? In Maryland? In any of the districts represented by a Democratic member of the Congressional Black Caucus.
Chicago is a very good example of why there is nothing inherent about having two competitive party. Where do you think David Axelrod learned about politics? As taxes go very high and as spending as a percentage of the GDP increases, no group, business, or block can be seen as being on the outside. Many blocks inside the current Republican Party will soon move over to the Democratic Party but every group inside the Democratic Party would have to be a fool to leave access to all of the spending and the reins of power.
@MM:
As you recognize, the U.S. does not need two political parties is the discussion is about raising taxes, and increasing entitlements. As Mass, Chicago, Maryland, and the District of Columbia demonstrate, if there is no discussion on spending, then one party with several factions is more than enough to run the government.
@Tyrone:
That’s a pretty fair answer, and one that leads to harder questions. If, after this thing is announced, a few more people decide to buy Hondas over Cadillacs, will that be all good?
It might be good to have a higher savings rate, but mass consumption is an important driver for growth.
(I personally favor tax simplification, but that we stick with the current main divisions: property, income, sales, tariffs, etc. More uniform rates on all those would increase economic efficiency without driving wholesale Cadillac to Honda conversions.)
Does this congressman actually know how our government works? If Obama is re-elected and the House stays substantially Republican and the Senate is nearly 50/50, how is that taxes will inevitably be raised?
This sounds to me like the talking point that Obama is going to take away citizens’ guns, just because he wants to – it’s not based on any accurate assessment of reality.