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Why Republicans Are Abandoning the No-Tax Pledge

Rick Newman

It sounds like capitulation. But as a few prominent Republicans begin to say they're open to tax increases, they may only be doing what has been inevitable all along.

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The famous no-tax pledge promulgated by conservative activist Grover Norquist dates to 1986, and 258 members of the current Congress--virtually all of them Republicans--have signed the oath never to raise taxes in any form. But a few pledge-signers now seem to be repudiating that commitment, including South Carolina Sen. Lindsey Graham, Tennessee Sen. Bob Corker and New York Rep. Peter King.

No Republican is eager to raise taxes, but those drifting away from the pledge say they'll consider tax hikes as part of a deficit-cutting package that also includes deep spending cuts. This is an important development in the "fiscal cliff" negotiations, since most budget experts say it will take a combination of tax hikes and spending cuts to truly fix Washington's finances and strike a deal to prevent an abrupt set of austerity measures from going into effect on Jan. 1.

Republicans coming to terms with the need for tax hikes are arriving late to a belief many Americans have held for a while. Polls show that Americans strongly favor tax hikes on the wealthy as the best way to narrow Washington's huge annual budget deficits. In a Pew Research Center poll from October, 64 percent of respondents approved of raising taxes on households earning more than $250,000--the highest level of support for any of 12 deficit-reduction measures. Even 41 percent of those who planned to vote for Republican presidential candidate Mitt Romney said they favored higher taxes on the wealthy.

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Republicans may have been holding out to see if the November elections disproved such poll results, but obviously that didn't happen. The tax policies of Obama and Romney were one of the clearest contrasts between the two candidates, with Obama proposing tax hikes on the wealthy and Romney pushing tax cuts for everybody. Political analysts often assume that voters are easy to woo with promised giveaways such as tax cuts, even if those promises are unrealistic. But if so, voters in 2012 didn't take the bait--another sign that many Americans have resigned themselves to tax increases, at least on their fellow citizens.

Another problem with the tax-hike holdouts is that there is no credible plan for paying down the national debt with spending cuts alone. When paying down the debt is a mere theoretical problem or campaign talking point, it's easy to say we should do it all with spending cuts. But when you dig into the details, that would require massive cuts in popular programs like Social Security, Medicare and defense, because those gobble up the majority of taxpayer dollars.

Most blueprints for fiscal reform--including the 2010 Simpson-Bowles report, which is enjoying a second life as Congress begins to ramp up efforts on tackling the national debt--call for a ratio of spending cuts to tax hikes ranging from 2-to-1 to 4-to-1. The Simpson-Bowles report called for $3 in spending cuts for every $1 in new taxes, including measures such as stricter limits on deductions and a 15-cent-per-gallon hike in the federal gasoline tax.

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With voters deeply concerned about the debt and apparently comfortable with some tax increases, repudiating the pledge may be a shrewd political move for Republicans--especially as they look ahead to the 2014 midterm elections. The GOP lost two seats in the Senate this year, despite Democratic vulnerabilities that were expected to produce a net gain for Republicans and maybe even give them control of the Senate. Staunch anti-tax positions by most Republican candidates clearly didn't help, so it may make sense to recalibrate.

There are still dozens of Congressional Republicans likely to oppose any tax increases at all. But it won't take all of them to pass compromised legislation that reduces the debt through a mix of tax hikes and spending cuts. Republicans with relatively safe seats--such as Corker and Graham--may be able to sway just enough of their colleagues to get a deal, while the most strident tax opposers remain a vocal, but less powerful, minority.

Rick Newman is the author of Rebounders: How Winners Pivot From Setback to Success. Follow him on Twitter: @rickjnewman.

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