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Clarifying The GOP Debt Hostage Stance

The New York Times this weekend published what seems like a straightforwardly wrong report about Republican willingness to consider higher revenue in a budget deal:

“I think it’s clear that the Republicans are opposed to any tax hikes, particularly during a fragile economic recovery,” Mr. Cornyn said on “Fox News Sunday.” “Now, do we believe tax reform is necessary? I would say absolutely.”
But he insisted that any changes in taxes be “revenue neutral,” meaning that the government would not take in any more money from individuals or businesses than it does now. ...
Mr. Kyl said last week that he would be willing to consider some revenue increases to help bring down the deficit.
“We’re perfectly willing to consider those kinds of issues in the context of tax reform, which we would very much like to do,” Mr. Kyl said a week ago on “Fox News Sunday.” “But we’re not going to have the time to do it or be able to do it in order just to raise revenue as part of the exercise which should be about reducing spending.”

A couple points. First, the headline -- "2 Republicans Open Door To Increase In Revenue" -- pretty much gets this backward. What the Republicans are saying here is that they're willing to close certain tax expenditures, but they insist that the revenue be used to reduce tax rates. When you say it has to be "revenue neutral," you're saying it can't raise revenue. That's closing the door to higher revenue, not opening it.

Second, it's worth exploring the policy implications of this position. Last week, President Obama cited a handful of completely indefensible subsidies through the tax code. Conservatives have made no real effort to defend these. Rather than stand behind these regressive and economically inefficient tax subsidies, they're instead saying they'll close them but only if the revenue is plowed back into lower tax rates. The demand for lowering corporate tax rates is the main philosophical point of difference, in a negotiation supposedly triggered by the imperative of reducing the national debt.

To pull back, then, the Republican position is this. They agree with Obama on spending cuts. They agree on closing indefensible corporate tax loopholes. But they're willing to risk financial catastrophe if Obama does not agree to cut corporate tax rates.