[UPDATE and CORRECTION (strikeouts shown and inserts noted with italics), 2:15 pm Thursday. Regarding the vote tally, I got it backwards! The 40-59 vote was 40 votes in favor, 59 opposed. More on what seems like the irony that most Democrats actually voted against this idea they supposedly support (of raising revenue by reducing tax expenditures or "loopholes"), later.]
Tuesday’s vote in the Senate on Tom Coburn’s proposal to end the ethanol tax credit was significant even though it failed to get the filibuster-proof 60 votes. It just barely fell short, receiving 59 votes. And as the Washington Post’s Lori Montgomery explains, what’s significant is the fact that it got 59 votes means that at least some Republicans supported the revenue-gaining measure:
The measure, offered by Sen. Tom Coburn (R-Okla.), fell short of the 60 votes needed to overcome a filibuster threat. But it had the support of 34 of 47 Republicans, most of whom have signed an anti-tax pledge that specifically prohibits raising taxes by any means but economic growth.
Coburn has argued forcefully that Republicans must abandon that pledge if they are serious about tackling the spiraling national debt. Though the Senate turned back his measure, he said the vote nonetheless marks the beginning of the end of GOP tolerance for wasteful giveaways through the tax code.
“You’ve got 34 Republicans that say they’re willing to end this, regardless of what Grover says,” Coburn said, referring to pledge creator Grover G. Norquist, the founder of Americans for Tax Reform. “That’s 34 Republicans that say this is more important than a signed pledge to ATR.”
Lori suggests that cutting the ethanol tax credit–along with other tax expenditures, perhaps–might actually become part of the bipartisan deficit-reduction deal that would come out of the “Biden talks.” But some key Republican leaders still seem to be “hypnotized and mesmerized” by the Norquist mindset (emphasis added):
It was unclear Tuesday whether the ethanol vote has any direct implications for the Biden talks. Though he was among the 34 Republicans who voted to advance the measure, Senate Minority Leader Mitch McConnell (R-Ky.) told reporters that ending tax breaks is “the kind of thing you would typically do in a broad tax reform bill,” not in debt-reduction talks.
For his part, Norquist claimed victory, saying he had prevented Coburn from tricking his colleagues into voting for a tax increase. At a Capitol Hill meeting Tuesday morning with more than 100 GOP staffers, Norquist said he authorized senators to advance the Coburn measure so long as they also supported a bill by Sen. Jim DeMint (R-S.C.) to cut the estate tax.
This strategy, Norquist said, “robbed” Coburn of the opportunity to persuade his Senate colleagues to vote for higher taxes.
“We won, he lost; he can try again, but he’s not going to get his tax increase,” Norquist said. “Because the House won’t let him have his tax increase, even if he thinks he can get it through the Senate.”
McConnell actually has it backwards, by the way. Ending tax breaks in a way that raises revenue is not typically what you’d do in a pure “tax reform” bill with a primary goal of simply improving the efficiency and fairness of the tax system; you’d typically look at reforming the tax system to collect the same amount of revenue more efficiently and fairly. It’s precisely because we are in fact trying to reduce the deficit by cutting spending and/or raising revenue that policymakers like Coburn are proposing to cut tax expenditures and actually raise revenue. It’s precisely what makes cutting tax expenditures such the perfect policy for deficit reduction–because it actually reduces spending and raises revenue at the same time.
[***UPDATE, 11 pm Thursday: This evening the Senate passed the proposal to end the ethanol tax credit, 73-27, apparently having fixed any "procedural" concerns of the Democrats. Here's the AP story. I do think this is major progress in terms of Republicans being open to deficit-reducing revenue increases if they come from base-broadening rather than from increases in tax rates.]