A growing number of Republican lawmakers are reluctantly concluding they will have to abandon their bedrock opposition to increased tax rates to get an agreement that avoids the fiscal cliff.
No GOP leader has publicly surrendered on President Barack Obama’s demand for higher upper-bracket tax rates, but Republicans are wavering. Some have spoken in favor of extending tax cuts for all but the top two income tax brackets, and others have left the door open to accepting that idea if Democrats make concessions on spending.
Both parties are heavily engaged in positioning and arranging their political cover for momentous votes that lie ahead. “I think there’s going to be a lot of jockeying between now and the end of the period whenever it is,” Georgia Republican Sen. Saxby Chambliss said.
One of the first Republicans to cross the tax hike line was Oklahoma Rep. Tom Cole, who advocated extending lower-bracket rates now in order to remove uncertainty and put off the battle over rates for incomes above $250,000. And Sen. Tom Coburn, R-Okla., speaking on MSNBC this week, parted company with many in his party by saying he would rather increase tax rates than limit deductions because action on tax breaks now would make a future tax overhaul more difficult.
Democrats have been quick to exploit each break in GOP ranks, dispatching emails with quotes from any GOP lawmaker who indicates a willingness to accept higher rates as part of a fiscal bargain.
The White House indicated Thursday that Republican acceptance of higher tax rates remains a necessary part of any agreement. “We have seen increasing numbers of Republicans, including elected lawmakers, acknowledge that raising rates is going to have to be part of this, and we welcome that acknowledgement. That’s progress,” White House Press Secretary Jay Carney said.
Although Carney said discussions are ongoing, there was no sign of an imminent end to the standoff.
The Republican negotiating posture appeared to be evolving Thursday as the Jan. 1 cliff deadline approaches, and most in the GOP were reluctant to address the issue of tax rates, which continued to appear the largest obstacle to cutting a deal.
A bipartisan group of House lawmakers including Heath Shuler, D-N.C., Jim Cooper, D-Tenn., Mike Simpson, R-Idaho, and Steven C. LaTourette, R-Ill., are circulating a letter urging congressional leaders to put “all options for mandatory and discretionary spending and revenues” on the table. None of the letter’s authors was willing to discuss their efforts Thursday.
Some Republicans in both chambers were reacting to colleagues’ uncertainty by doubling down on their tax hike opposition.
Senate Republicans met privately Wednesday, and on Thursday many of them appeared to be as strongly opposed to higher rates as in the past. “Obviously there are a certain few and they’ve already been vocal about that,” Dean Heller, R-Nev., said of the dissenters. “But as a conference overall, raising rates, I don’t think the majority is there.”
“I just think people are beginning to look toward the end of the year and realize where everything really is and realize there may be some ways of putting leverage back onto the situation of actually getting to entitlements,” Bob Corker, R-Tenn., said.
House Ways and Means Chairman Dave Camp, R-Mich., sounded on Wednesday as if he would not rule out a tax rate increase. But Thursday, he put out a statement reaffirming his opposition to higher rates.
Chambliss, a member of the “gang of eight” who has argued that more revenue is needed to reduce the deficit, ruled out supporting a rate hike. “No,” he said. “I’ve been opposed to it all along. There are other ways to raise revenue, but [Obama] is just fixated on raising rates and that will not energize the economy.”
“I will not support anything that raises rates on individuals,” Alabama Republican Sen. Richard C. Shelby said.
But some who continued to oppose higher upper-bracket rates acknowledged that they might be part of a final package.
“I think everything’s being discussed,” said Sen. John McCain, R-Ariz.
Republicans have been stepping up their call for the Democrats to give ground on entitlements, something even Obama has suggested will likely need to happen if Republicans agree to higher rates. Sen. Olympia J. Snowe, R-Maine, a moderate who is retiring after the current term, said she is open to a tax rate increase if it is crafted not to hit small businesses and if the growth of entitlement programs is curbed.
Democrats are as reluctant to talk about cuts in domestic spending as Republicans are about taxes. But Senate Majority Whip Richard J. Durbin, D-Ill., said he could foresee a deal emerging that has Obama granting concessions to Speaker John A. Boehner, R-Ohio.
Lawmakers are hesitant to talk about any backup plan if Republicans and Democrats remain unwilling to strike a deal on rates and negotiations fall apart. But they suggest one that could come into play.
One approach pondered by several former GOP congressional aides calls for House Republicans to pass legislation to extend all current tax rates and reduce spending. Sending that bill to the Senate would give House Republicans a chance to vote on a measure without higher rates.
Although the plan would die in the Senate, Democrats there could then put up their own version of legislation. A conference committee could resolve differences between the two bills in a matter of hours or days, according to lawmakers and staff.
“Up here anything can happen,” said Shelby. “It’s getting complicated and if the president wants to get involved, he wants to meet the Republicans half way, we’d get a deal.”
David Harrison, Sam Goldfarb and Ben Weyl contributed to this report.