TOPICS > Politics

Cracks Emerge in Republican Opposition to Raising Taxes to Curb Deficit

June 24, 2011 at 12:00 AM EDT
Bipartisan budget deficit talks led by Vice President Joe Biden reached an impasse Thursday over Republican objections to raising taxes. Judy Woodruff reports on the debate within the Republican Party over how to curb the deficit.
LISTEN SEE PODCASTS

TRANSCRIPT

JEFFREY BROWN: Next, grappling with the nation’s deficit and debt.

The talks led by Vice President Biden reached an impasse yesterday over Republican objections to raising taxes. GOP leaders have put forward a united front in opposing tax hikes as part of any deal to raise the debt ceiling. But there are some in the party willing to consider revenue increases.

Judy Woodruff reports on a debate within the Republican Party.

JUDY WOODRUFF: It’s fair to say, in the Republican Party, poison ivy is more popular than taxes.

REP. MICHELE BACHMANN, R-Minn. presidential candidate: And we have got to bring that tax rate down substantially.

MITT ROMNEY, (R) presidential candidate: We didn’t raise taxes in Massachusetts.

HERMAN CAIN, (R) presidential candidate: Lower taxes.

TIM PAWLENTY, (R) presidential candidate: Taxes are too high.

JUDY WOODRUFF: But after years of support for an almost sacred pledge not to raise taxes, lately, there appear to be cracks in the GOP’s solid wall of opposition.

Just last week, 33 Senate Republicans joined in what many observers saw as a symbolic vote in favor of ending $6 billion a year in controversial tax credits for the U.S. ethanol industry, meaning its taxes would go up.

SEN. TOM COBURN, R-Okla.: Look, this isn’t the good old days in America. We’re at risk.

JUDY WOODRUFF: Oklahoma Republican Tom Coburn, one of the sponsors of the ethanol amendment, sees that vote as evidence many in his party are shifting their thinking, something he believes both parties must do in order to reverse the dire fiscal course the country is on.

SEN. TOM COBURN: Do you think we can — we can actually solve this problem without compromising on some of the things that are important? And that doesn’t mean you compromise your principle. It means, how do we fix a very real problem that is imminently going to change everybody’s outcome for the future in this country if we fail to do it? It’s a big challenge, and it’s much bigger than most people know. And it’s much more dangerous than most people know.

JUDY WOODRUFF: Die-hard GOP anti-taxers insist there is no shift, and charge, Coburn overstates the meaning of the ethanol vote.

GROVER NORQUIST, Americans for Tax Reform: No Republican voted for a tax increase, and Coburn’s effort failed.

JUDY WOODRUFF: Americans for Tax Reform’s Grover Norquist, who has led the crusade to get Republicans to sign a no-tax pledge, says cutting spending is the only solution to the deficit.

GROVER NORQUIST: There is no interest, apart from Coburn, in voting for tax increases. That’s what the Democrats want to do. That’s not what the Republicans want to do. And it’s certainly not what anyone who has taken a pledge to their voters should be doing.

JUDY WOODRUFF: But longtime Republican insider Vin Weber, a former Minnesota congressman, says the ethanol vote sent an important signal.

VIN WEBER (R): I think it does amount to a sea change. And I think, if they’re allowed to define, on their own terms, what constitutes a tax increase that opens the door to a broad tax reform that might broaden the base by closing loopholes and eliminating deductions and credits and exemptions, probably coupled with a reduction in top rates to spur economic growth, but resulting in a net tax increase.

JUDY WOODRUFF: Hardly anyone believes such an overhaul of the tax code will be part of any deal to emerge from current talks between the White House and congressional leaders to win votes for a hike in the debt ceiling.

But if they do produce an agreement in the near term, with savings in the range of several trillion dollars, Weber and others believe another bipartisan Senate group could pick up the ball. The so-called gang of six, which Coburn recently left, but says he still may rejoin, could provide the basis for a larger package to address a looming debt catastrophe.

That group’s co-founder, Georgia Republican Sen. Saxby Chambliss, reiterated at a recent forum that, for them, everything is on the table, both spending cuts and taxes.

SEN. SAXBY CHAMBLISS, R-Ga.: While we’re reducing tax rates, a la Ronald Reagan, we’re going to increase revenues, a la Ronald Reagan. It’s exactly the same sort of approach that was taken back then. We know it worked then, and we know it can work again, without raising tax rates.

JUDY WOODRUFF: Under President Reagan, along with spending cuts, a number of tax breaks were reduced and loopholes were eliminated. More people and more companies saw their taxes go up. But Norquist says history has shown that was the wrong approach.

GROVER NORQUIST: So, we know that, let’s cut a deal, cut spending maybe, raise taxes really, never works, doesn’t work, bad idea.

JUDY WOODRUFF: Coburn insists his tax efforts do not deviate from the core values of the Republican Party, as Norquist charges.

SEN. TOM COBURN: And his fear is, is, to get that compromise, we might abandon what he sees as the ultimate principle of the Republican Party.

The ultimate principle of the Republican Party should be, do what is best interest of the country and the future of the free enterprise system in this country. That ought to be the number-one principle. And will there some time be that we might have to raise rates, if we can’t get out? If we don’t, guess what’s going to happen? We’re going to be treated just like Greece. Greece is going to — Greece is going to be our model if we don’t control our own destiny.

JUDY WOODRUFF: The Greek government is working feverishly now to avoid default on its debt.

Even with increasing fears about the debt crisis here at home, Norquist beats the no-tax drum, and has a warning for any Republicans thinking of straying.

GROVER NORQUIST: They get elected promising not to raise taxes, promising, committing to their voters in their states that they won’t raise taxes. If they want to go back to their state and say, you know what, Obama spent so much money, I think I want to take more of your money and give it to Obama, they’re free to do so. I tend to think it might be difficult to get reelected.

JUDY WOODRUFF: But Vin Weber, who remains close to many in the GOP, says, if both parties give in on some of their core beliefs, a solution involving taxes is possible, even as an election year draws close.

VIN WEBER: Well, this is difficult. I’m not — I’m not suggesting any of this is going to be easy, just as it’s not going to be easy for Democrats to vote for reforms of Medicare and Social Security, which they consider the crown jewels in their social compact, if you will.

But if you get — if one side starts to give in on something that is really critically important to them, it makes it a little easier for at least the prospect of the other side to give. And that’s what we’re talking about here.

JUDY WOODRUFF: Which creates the image of two enemies holding hands and jumping off a cliff at the same time.

JEFFREY BROWN: President Obama is stepping into the stalled debt talks. He’s invited Senate Majority Leader Harry Reid and Republican Leader Mitch McConnell to separate meetings at the White House on Monday.