Revenues or no revenues; that is the question

As the bipartisan debt-reduction talks continue, participants are starting to realize they need to pick up the pace. As the Washington Post reported, “Over the next six weeks, negotiators must strike a bipartisan compromise to slice more than $2 trillion from the federal budget by 2021, reduce the complex plan to writing and persuade a bitterly divided Congress to support it.”

With another recess coming up on the Hill, this appears rather daunting.

But the ticking clock is still secondary to the problem of Democrats paying a ransom Republicans will find acceptable.

Remember, to reduce the debt, officials can have more money coming in, less money going out, or some combination of the two. Yesterday, Minority Whip Jon Kyl (R-Ariz.), the chief Senate Republican negotiator in the talks, reiterated his belief that he doesn’t want any additional revenue coming in at all. Why? Because his far-right ideology says so.

In an unexpected twist, it appears House Republicans, usually the more extreme bunch, have a more constructive attitude.

Last week’s resounding votes on ethanol subsidies were just the start. Republicans are now starting to eye all sorts of tax breaks and special-interest loopholes once considered sacred cows as they seek ways to increase government revenue without actually raising tax rates.

The targeting of long-protected tax breaks — for ethanol, research and development, manufacturing and foreign company income — is a sign that key House Republicans are ready to break with the orthodoxy of past tax debates while ditching special interests that have long held sway in tax reform discussions.

“We are not opposed to revenues,” House Majority Leader Eric Cantor (R-Va.) told reporters. “We are just opposed to tax increases.”

Now, it’s important to note that, in context, the House GOP’s willingness to consider additional revenue is happening outside the debt-reduction talks. Instead, Republicans are expressing this openness as part of possible tax-reform efforts, not the Biden-led discussions.

That said, the fact that Eric Cantor, of all people, is willing to say his caucus is “not opposed to revenues” is the sort of thing that could affect the debt-reduction negotiations — and remind Kyl and his cohorts that their line looks even more ridiculous when it’s to the right of their House colleagues.

I’d also note the obligatory reference to the moving goalposts and, to mix metaphors, the absurd new center of gravity. For years, the assumption was that debt-reduction talks would always involve a combination of less spending and more revenue, with the parties arguing over the ratio. With the radicalization of the Republican Party, it’s considered a minor miracle when Dems can get the GOP to even consider both sides of the budget ledger, and in the case of Jon Kyl, it’s still not even a possibility.