Speaker\'s Overture on Taxes Raises Hope for Fiscal Deal

WASHINGTON - To Democrats, Republican resistance to raising tax rates on affluent Americans seems not only stubborn, but also befuddling and self-defeating.

Public opinion strongly favors it. President Obama just won re-election campaigning more strongly on the tax issue than on any other. Federal revenue as a share of the economy is near a 60-year low. Washington faces a $1 trillion annual deficit.

Yet even as some party leaders and intellectuals urge them to concede the point, most rank-and-file House Republicans refuse. That is why Speaker John A. Boehner has moved so gingerly, finally offering late last week to raise rates only on incomes of $1 million or more, despite calls from Senate Republicans for a deeper concession.Read More     

The reasons run deep in the structure of 21st-century American politics, and the modern Republican Party.

The national exit poll conducted by Edison Research for the November election illustrates how polarization by party and ideology has estranged the coalitions behind Mr. Obama and Mr. Boehner in their stalled negotiations.

Seven of 10 Obama voters said government should be doing more to solve problems. Eight in 10 voters said tax rates should rise. (Two-thirds said tax rates should rise for incomes over $250,000, and another 13 percent said taxes should go up for everyone.) By contrast, 8 in 10 voters who backed the Republican nominee, Mitt Romney, said government already did too much. A 54 percent majority said no one's tax rates should rise.

Those national numbers actually understate the homogeneity of constituencies that returned a Republican majority to power in the House. Because state legislatures draw most House districts to favor their own majority party, more than 80 percent of those elected to the House won with at least 55 percent of the vote.

As a result, the everyday interactions Republicans have with their constituents and colleagues reinforce a lower-tax worldview diametrically opposed to that of their Democratic counterparts - and out of step with most Americans. The biggest threat to their careers is primary challenges from opponents more conservative than they are.

“It's who they are,” said Representative Tom Cole, Republican of Oklahoma. “It's the air they breathe. It's what the Republican electorate produces.”

Mr. Cole, a former chief of staff for the Republican National Committee, has lately become Mr. Obama's unlikely ally. He has tried, fruitlessly so far, to convince his colleagues that yielding to the president on higher rates for families with incomes of more than $250,000 would spare the party political damage while allowing them to fight the administration later on spending cuts.

What Mr. Boehner has proposed is allowing the top rate to revert to 39.6 percent for income of $1 million and above, and to raise his total for new revenue over 10 years to $1 trillion from $800 billion, according to a person familiar with his latest offer. That rate increase would raise far less revenue than Mr. Obama's plan, which would affect many more taxpayers.

In return, according to the person familiar with the talks, Mr. Boehner is seeking concessions from Mr. Obama on spending cuts now, rather than waiting until next year as Senate Republicans have suggested. Contrary to some reports, Mr. Boehner would also like to have some increase in the nation's borrowing limit as part of a year-end compromise on the Bush-era tax cuts and spending to avoid another battle over a Congressional vote to raise the limit, which will be needed as soon as January.

But as grudgingly as Mr. Boehner has moved even that far, there is no guarantee that he could sell such a proposal to his caucus even if Mr. Obama were to accept it. That underscores the difficulty of bridging the chasm between the principal negotiators.

“I don't think the president has any earthly idea” of the strength of Republican opposition, Mr. Cole said. “He moves in a different political culture.”

The cultural gap between the parties once was narrower - before conservative Southern Democrats became Republicans, liberal northern Republicans became Democrats and centrists dwindled. In 1990, days before Mr. Boehner was elected to the House, a Republican president, George Bush, joined a Democratic-controlled Congress to enact tax increases as part of a deficit-reduction package.

Of the 47 House Republicans who voted “aye” in 1990, only two remain. Of the 19 Senate Republicans, only two remain. One of those senators, Richard G. Lugar of Indiana, will leave office in January after losing his seat in a Republican primary. The Tea Party challenger who defeated him then lost to a Democrat.

“The sad story of the Republican Party is that we've become the party of primaries,” said Kim Alfano, Mr. Lugar's media consultant.

The 2012 Republican presidential primaries foreshadowed the difficulty Mr. Boehner now faces. In one debate, every candidate including Mr. Romney rejected the notion of a budget deal that would include tax increases even if accompanied by spending cuts 10 times as large.

“That was a danger sign,” said Peter Wehner, a deputy to former President George W. Bush's top political strategist, Karl Rove.

Because conservative voters outnumber liberals, ideological compromise comes more easily to Democrats. Self-described conservatives (35 percent of the electorate) cast 6 in 10 votes for Mr. Romney; those identifying as liberals (25 percent) cast 4 in 10 for Mr. Obama.

Now the prospect of blame for tax increases, spending cuts and an economic downturn forces Mr. Boehner and his allies to seek a compromise. If Mr. Obama accepts deeper spending cuts, Mr. Cole said, enough Republicans would brave anger from their base and back higher tax rates to permit a deal. Mr. Boehner could abandon trying to win over most of his caucus and assemble a majority made up principally of Democrats. But that would mean gambling with his speakership.

“He'd have to persuade them he is doing them a favor by allowing them to vote ‘no' ” on tax increases, said Representative Chris Van Hollen of Maryland, the top House Democrat on budget issues. “I think he could pursue that strategy and keep his job.”

Reaction from the conservative news media poses another risk if Republicans compromise. “How does Fox play this?” asked former Representative Tom Davis, a Virginia Republican and former chairman of his party's campaign committee.

The White House hopes another powerful voice may tip the balance. Many of Republicans' traditional business backers have urged a deal including tax increases to keep the economy from tipping back into a recession.

“Their position as the party of no new taxes is unsustainable,” said Bernadette Budde, who retired this month as a strategist for the Business Industry Political Action Committee. “If you're not going to listen to the business community about economic problems, who are you going to listen to? Some talk-radio host? Some blogger? Some political operative?”