The feud between Sen. Tom Coburn (R., Okla.) and tax lobbyist Grover Norquist came to a head (again) this week as Republicans girded themselves for a potential deal on the debt ceiling. Sparks flew Tuesday when Coburn forced a cloture vote on an amendment to eliminate $6 billion in ethanol tax subsidies. Ethanol, however, was hardly the issue at stake.
GOP leaders have made it clear that Republicans will not support a deal to raise the debt ceiling if it includes tax increases. But as Tuesday’s vote showed, not all Republicans agree on what constitutes a “tax increase.” At issue is the “Taxpayer Protection Pledge” that Norquist, president of Americans for Tax Reform, urges all GOP lawmakers (and any willing Democrats) to take. All but seven Republicans in the Senate — including Coburn — and all but six in the House have signed on. Signers promise to oppose any tax increase as well as “any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.”
Coburn’s amendment eliminated tax breaks for the ethanol industry but did not include any offsetting tax cuts. The Joint Committee on Taxation estimated that his proposal would raise $2.4 billion in new tax revenue over the remainder of the year, which Coburn intended to put toward reducing the deficit. Norquist, therefore, denounced the amendment as a violation of the pledge.
The vote failed, 40 to 59, well short of the 60 needed for cloture, but the fact that 34 Republicans supported the amendment raised eyebrows on Capitol Hill as perhaps a sign that Norquist and his pledge have lost clout in the GOP conference. Coburn certainly touted it as such. “That’s 34 Republicans who are willing to say this is more important than a signed pledge to ATR,” he told reporters after the vote. “I think you all think [Norquist] has a whole lot more hold than I think he has.” Then, in a follow up statement, he added: “Taxpayers should be encouraged that Republican senators overwhelmingly rejected the ludicrous argument that eliminating tax earmarks is a tax increase.”
Norquist vociferously denies this charge, pointing out that ATR gave senators the go ahead to vote yes on Coburn’s measure provided they also agreed to support an amendment by Sen. Jim DeMint (R., S.C.) that would have made up for the lost tax credit by eliminating the inheritance tax. There has been no vote on that measure yet, and it’s not clear when or if a vote will happen, but most Republicans have voiced support. “No one violated the pledge,” Norquist said. “Nobody followed Coburn over the cliff.”
Norquist accuses Coburn of trying to trick colleagues into supporting a tax increase in order to undermine the Republican position in the ongoing debt negotiations. “He’s trying to screw the rest of the Republican party because he is so mad at the world,” Norquist tells NRO. “He didn’t want to get rid of the ethanol tax credit without raising taxes. The important thing in his life was raising taxes.”
In fact, Norquist has been at odds with Coburn ever since the senator voted in support of the Bowles-Simpson deficit commission’s final report, which Norquist describes as “a massive $2 trillion tax hike” and a blatant violation of the ATR pledge. He has constantly criticized Coburn’s involvement in the “Gang of Six” talks, as well as his stated willingness to negotiate when it comes to taxes. Norquist says Coburn’s statements after the vote make it clear that his amendment had nothing to do with ethanol subsidies and everything to do with forcing Republicans to go on record supporting a tax increase — essentially a gateway drug that would inevitably lead to additional increases down the road. “He said, ‘Ha ha, popped your cherry, lost your virginity. Now give me $2 trillion in tax increases,’” Norquist says. “As soon as they voted, he turned around and called them sluts. Guys like that didn’t get second dates in high school.”
And even worse, Norquist argues, the vote played right into the Democrats’ hands by letting them cast Republicans as amenable to tax increases. Indeed, a number of Democrats put out statements to that effect, some spinning it as good for the country and others alleging Republican hypocrisy. “[Coburn’s] willingness to cut special-interest tax breaks for the purpose of deficit reduction is encouraging,” said Rep. Chris Van Hollen (D., Md.), ranking member on the House Budget Committee. Democrats in Massachusetts wasted no time attacking Sen. Scott Brown (R., Mass.) — up for reelection in 2012 — for “breaking promises” by violating the ATR pledge.Sen. Chuck Schumer (D., N.Y.) jumped at the opportunity to exploit this apparent rift on the right, touting headlines such as “Ethanol vote may signal GOP tax shift” and holding a press call heralding the change. “The mass Republican vote to end ethanol subsidies was a watershed moment that means tax expenditures are fair game in the now ongoing deficit-reduction talks,” he told reporters on the call Wednesday. “The dam is officially broken, the knee-jerk right-wing opposition to get rid of any subsidies is subsiding.”
That said, Coburn had his fair share of supporters who, with varying degrees of subtlety, appeared to split from the Norquist position despite having signed the pledge. “Cutting out special subsidies hardly is the same thing as raising taxes,” said Sen. John Cornyn (R., Texas), who heads GOP campaign operations. Sen. Richard Burr (R., N.C.) added: “Grover Norquist can say what he wants, but I would disagree with him on this.”
“I voted for lower food prices and less federal debt. I’d do that again if I could,” said Sen. Lamar Alexander (R., Tenn.) when asked about his vote on Wednesday. Even freshman fiscal hawk Sen. Pat Toomey (R., Pa.), who called the pledge “a useful tool in uniting Republicans,” acknowledged having “subtle” differences with the ATR president. “I am not interested in raising taxes,” he said. “But I am interested in ending ethanol subsidies.” Toomey added that he also supported DeMint’s amendment.
The Club for Growth, the conservative group that Toomey founded, announced key votes on both amendments, but made clear that its support for Coburn’s amendment was not contingent on any other factors. “Our position is that bad economic policy should be eliminated, regardless of other changes in the tax code,” Club for Growth spokesman Barney Keller writes in an e-mail. “Ethanol subsidies are a travesty and we’re looking forward to seeing their abolition.”
Norquist and his supporters, however, claim that tax issues aside, Coburn’s amendment was a “phony baloney” effort to undo the distortions in the market caused by ethanol production because it fails to eliminate the federal ethanol mandate, which requires that the United States consume 36 billion gallons of “renewable fuels” per year by 2022 — nearly half of which will consist of ethanol. DeMint’s amendment, meanwhile, would strike the mandate. “He deliberately did not fix the ethanol problem,” Norquist said. “This was a pure tax-increase vote.”
According to Senate sources, tensions are running high, particularly as debt negotiations led by Vice President Biden have assumed a greater urgency. GOP leaders have repeatedly insisted that no tax increases will be included in a final deal. However, when pressed by reporters to clarify their definition of “tax increase,” they are conspicuously vague, which could frame this week’s vote in a revealing light. Some Senate aides speculate that a final deal could involve a Democratic compromise on Medicare if Republicans agree to eliminate certain tax loopholes. Others, however, don’t think a deal will include any loophole closings, pointing to Republican statements that such changes should be made only in the context of comprehensive tax reform.
Depending on whom you ask, Senate Republicans have either had enough of Norquist’s ideological rigidity, or are losing patience with Coburn’s quest for bipartisanship. Either way, it seems clear to most observers that the feud has become increasingly personal. “Grover is embarrassed that 34 Republicans essentially told him to take a hike and rejected his narrow and ridiculous interpretation of what the pledge means,” one aide says. “He’s made a calculation that this is an existential threat to his lobbying livelihood. That’s what this is about, one desperate lobbyist.”
Another aide laments Coburn’s newfound willingness to cut a deal with Democrats: “What happened to the old Tom Coburn who said no to everyone?”
Senate Majority Leader Harry Reid (D., Nev.) has scheduled Thursday-afternoon votes on two additional amendments that go after ethanol subsidies, including one from Sen. Diane Feinstein (D., Calif.) that is nearly identical to Coburn’s (in fact, he is a cosponsor). Expect a lot more Democratic votes this time around; party leaders whipped against Coburn’s measure not out of disagreement, but to protest the procedural maneuvering he used to force a vote on Tuesday. Republicans, meanwhile, will presumably vote the same. As for the Norquist–Coburn feud, it’s apparently just getting started.