In the debt-limit debate, we’ve been hearing a lot about how a “grand bargain”-style solution with tax increases can’t pass the GOP-controlled House. That’s true. But here’s the issue that’s being neglected: Can a tax increase pass the Democratic majority Senate? Without a realistic possibility of Senate support for tax hikes, the whole revenue side of the discussion ceaselessly promoted by the White House dissolves into meaninglessness.
The problem is electoral politics. Democrats have 23 Senate seats up in 2012, counting the two independents who caucus with them. The GOP has 10. Of the 23, as of now six are retiring. That leaves 17 who will be facing the voters in bids for re-election.
How many of them are really willing to vote for a tax increase? Of the 23 total seats, the Cook Political Report rates only eight incumbent seats plus the open seat in Hawaii as “solid” Democrat. That leaves 14 Democratic seats (with nine incumbents) that are “Likely” Democrat, “Lean” Democrat or worse. Those are going to be tough reelection campaigns probably in all cases. Most of these incumbents would see nothing but major political risk in supporting, say, a trillion-dollar tax increase as part of a deficit reduction/debt limit package.
Are Bill Nelson of Florida and Sherrod Brown of Ohio, in two “Lean” Democrat races, keen to explain to voters their support for a massive tax increase? “Toss-Up” state incumbents Claire McCaskill of Missouri, Jon Tester of Montana, Ben Nelson of Nebraska, and Joe Manchin of West Virginia will be even less enthusiastic.
But doesn’t the bipartisan “Gang of Six” proposal, which includes a revenue increase of $2.3 trillion over 10 years compared to current policy, prove some Senate Republicans would vote for a tax increase? And wouldn’t that provide bipartisan cover for hesitant Democrats?
Not so much. In the first place, the “Gang of Six” proposal is distinctly unforthright about its policy implications on the revenue side: It misleadingly sells itself as $1.5 trillion in tax relief, but that’s against a baseline scheduled to swell when the Bush tax cuts expire at the end of 2012. Also, it’s interesting that the only “Gang of Six” Senate seat up in 2012 is that of Democrat Kent Conrad of North Dakota, and he’s retiring. The other two Democrats don’t face the voters until 2014. Of the Republican gang members, one has already announced he isn’t running again in 2016, one is up in 2014, and one in 2016. Given the potency of the tax issue among Republicans, any rational GOP senator thinking of voting for a large tax increase ought also to be thinking about the prospect of fending off a primary challenger, whether from the Tea Party or the conservative party mainstream. And any Democrat from a red state has ample reason to worry about handing a major issue to an opponent.
So no, I don’t think a deal that includes a large tax increase could pass the Senate under any realistic circumstances. I think Senate Majority Leader Harry Reid knows it. Perhaps President Obama thought he could charm some alternate reality into being, or perhaps he just wanted to be seen fighting for his principles before the inevitable: that he signs what the House and Senate can actually pass, which is legislation that will lift the debt limit, cut some spending – and not increase taxes.