JONATHAN CHAIT JUNE 14, 2011
A pretty surprising and important thing happened today: Senate Republicans opposed Grover Norquist en masse.
The drama was buried in a minor vote that will go nowhere, but that fact obscures the import of what happened. Norquist runs Americans For Tax Reform, the sponsor of a no-tax pledge signed by virtually all Republicans. Norquist's pledge has held absolute sway over the party for two decades -- Republicans at the national level have opposed on principle any tax hike whatsoever. Any agreement to reduce the deficit is going to require Democratic support, which in turn will require some increase in revenue. Some Republicans negotiating this deal want to get this revenue by closing tax loopholes or credits, which they (accurately) see as a form of spending through the tax code. Norquist opposes any deal as a violation of the party's anti-tax theology.
Sen. Tom Coburn has an odd role in all of this. He was involved with budget negotiations, then bizarrely jacked up his demands and then bolted the negotiations. But before he did that, he started laying a trap for Norquist. Coburn proposed to eliminate the tax subsidy for ethanol, which conservatives have long opposed. Of course, the subsidy is a tax credit, which means that eliminating it would be a tax hike. Norquist has forcefully opposed eliminating the ethanol subsidy, arguing that the ethanol subsidy may be bad, but it can be eliminated only if the revenue is used to reduce revenue. Eliminating even an unjustified tax subsidy in order to reduce the deficit is strictly forbidden. Indeed, according to Norquist's rule, a bill that cut federal spending by 50% and eliminated the ethanol credit would be forbidden if it did not cut other taxes by at least as much as the ethanol credit. Coburn's bill exposed the conceptual absurdity of the anti-tax pledge, which has become the most important impediment to a budget agreement that restrains the size of government.
Even though Coburn remains absent from the budget negotiations, he brought the issue to the Senate floor today. Democrats opposed his bill for unimportant and obscure procedural reasons. Anyway, the point was not to kill the ethanol subsidy. The point was to establish the principle that Republicans can vote to eliminate a tax credit without plowing the money back into other tax reductions. Amazingly, 43 34 Republicans voted for Coburn's bill. It's a clear signal of at least theoretical willingness to violate anti-tax orthodoxy.
This is not the end of Norquistism in the Republican Party. It's not even the beginning of the end. But it may be the end of the beginning. The House remains a strong bastion of anti-tax absolutism, and I remain skeptical than any balanced deficit deal could pass the lower chamber. And the GOP presidential campaign will reinforce the party's anti-tax absolutism, with candidates pushing the boundaries of supply-side devotion ever farther. Still, the Senate's show of dissent is deeply significant.