Jonathan Alter for Bloomberg: Boehner Boxed In by Republican Anti-Tax Pledge

May 5th, 2011

Bloomberg

Boehner Boxed In by Republican Anti-Tax Pledge: Jonathan Alter

By Jonathan Alter – May 5, 2011 1:25 PM ET
Bloomberg Opinion
Read Full Article Here

Can the Republicans find sweet harmony?

On the deficit debate, party frontman John Boehner is boxed in.

“Why would you cut a deal before 2012?” asks one tax hard-liner.

“It’s Paul’s idea,” House Speaker Boehner, an Ohio Republican, told ABC News in an April 25 interview. “Other people have other ideas.”

If you get the sense that John is distancing himself from Paul, don’t blame Yoko. Boehner is worried that Wisconsin Representative Paul Ryan’s plan to privatize Medicare — which passed the House with all but four Republican votes on April 15 — isn’t playing so well at town hall meetings.

The speaker is in a box.

His party easily took the House last fall, but the Senate and the presidency are still in Democrats’ hands. And just when the big debate on the deficit is ripening, President Barack Obama, fresh from his skillful dispatch of Osama bin Laden, is a Beatle again.

Despite pleas from Treasury Secretary Timothy F. Geithner and emissaries from Wall Street, Republicans seem determined to play chicken with Obama on the debt ceiling, which must be raised by Aug. 2 or the U.S. will face default. They are demanding that big chunks of the Ryan plan be adopted or, at a minimum, that triggers be enacted that would impose huge spending cuts down the road.

Of course, unless Republicans approve some revenue increases, like getting hugely profitable oil companies off the public dole, they won’t get agreement from the President.
His Own Party

But Boehner’s most immediate problem is his own party. The source of his indigestion this time isn’t so much the Tea Party freshmen as a 25-year-old document that he and almost everyone else in the party has signed.

Sponsored by Grover G. Norquist’s Americans for Tax Reform, the famous anti-tax pledge requires Republicans to oppose not just garden variety tax increases but also the removal of any tax subsidy or loophole unaccompanied by reductions in marginal rates.

“I wrote the pledge this way intentionally,” Norquist says, “so there could be no net tax increases.”

Now there is a nasty squabble under way between Norquist and archconservative Senator Tom A. Coburn, an Oklahoma Republican who wants to get rid of wasteful subsidies like those for ethanol but is running up against the pledge he signed.

Norquist says Coburn “lied his way into office.”

Coburn says he owes his allegiance to the Constitution, not to “a pledge from a special interest group.”
Gang of Six

Coburn is a member of the bipartisan Gang of Six that is working hard in the Senate for a compromise, along the lines offered by the Simpson-Bowles deficit commission, that includes both entitlement cuts and an end to most tax code subsidies — the kind that keep corporate lobbyists in business.

It’s a commendable effort. But any Gang of Six agreement is dead on arrival in the Republican-controlled House.

“Why would you cut a deal between now and 2012 when you’re going to get a Republican Senate?” Norquist asks.

With neither the Ryan plan nor any Gang of Six proposal headed for passage, lawmakers are looking at alternatives. One idea, backed by Senators Claire McCaskill, a Missouri Democrat, and Bob Corker, a Tennessee Republican, is to limit federal spending to 20.6 percent of gross domestic product.

This is a classic example of hyper-political Washington thinking by senators up for re-election: Get credit for doing something without specifying what it is. If it passes, McCaskill-Corker would amount to a Ryan plan by another name: huge cuts to entitlement spending made with a hatchet, not a scalpel.
Actual Behavior

At least Ryan gets specific. The problem is the specifics have little relation to how people and companies actually behave.

For instance, Republicans propose that in 10 years seniors would go on exchanges — shades of the reviled Obama health plan — and buy their health insurance in the private market. Let’s see: Which insurance companies want to insure sick, elderly people?

That’s why Medicare was invented. The premium support Republicans would offer can’t come close to covering the cost of that insurance. The nonpartisan Congressional Budget Office estimated that under the Ryan plan, seniors would eventually pay an average of about $6,500 more a year out of pocket.
Low Estimate

Other experts say that for seniors with medical histories – – most seniors — this estimate is almost certainly low.

Ryan’s way around the issue is to make it a mañana problem. “How many of you are 55 years of age or older?” he asked the audience at a recent town meeting in Franklin, Wisconsin. “This budget does not affect your Medicare benefits.”

Pretty slick for a baby-faced policy wonk: Pander to today’s seniors, who voted 58 percent Republican in 2010, in part because of the GOP’s election ads arguing correctly that Obama’s new health-care law would eventually cut $500 billion from Medicare. Everyone younger gets the finger.

If this radical recipe actually restored the nation to fiscal health, it might be worth it. But it doesn’t. Any reading of the Ryan plan reveals that its real objective is to slash spending, especially on programs for the poor, and cut taxes. Deficit reduction runs a distant third.

The good news is that if you force Tea Party types to choose, most think deficit reduction is more important than more tax breaks for the wealthy. That gives Boehner something to work with.

But expect an exceptionally bumpy ride between now and July, as each side blames the other for driving the economy over the cliff and into default.

The bottom line: With the Ryan plan and any Gang of Six proposal dead in the water, Republicans must rally around another deficit-cutting deal.

(Jonathan Alter, author of “The Promise: President Obama, Year One,” is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: Jonathan Alter at alterjonathan@gmail.com.