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Stakes high in debt talks for moderate GOP senators

Face political risk in backing tax increases

By Theo Emery
Globe Staff / July 16, 2011

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WASHINGTON - For moderate Republican senators such as Scott Brown of Massachusetts and Olympia J. Snowe of Maine, the debt default stakes could be particularly high.

From the right, conservatives demand that they stand firm against any compromise containing tax increases, even if it would potentially prevent an economic maelstrom. Constituents are concerned that an impasse could decimate markets - and their retirement savings plans - or that a deal packed with only spending cuts would slice such benefits as Medicare and Social Security.

Brown, Snowe, and the other moderate Republican senator from Maine, Susan M. Collins, have been steadfast: Congress and the president must not allow the government to go into default over its loan obligations. On the matter of whether tax increases could be part of a comprehensive long-term plan to slow the growth of the deficit, however, Brown has not committed.

“It’s difficult to get into hypotheticals without seeing what they’re actually moving forward with,’’ Brown said, commenting on which pieces he could accept in any such deal.

Asked for further elaboration about Brown’s stance on any tax increases, a spokesman declined to comment.

Centrist Republicans such as Brown and Snowe, who are up for reelection next year, would probably pay a steeper political price if they opposed a deal with tax increases and the resulting impasse delivered the country into default, rather than if they supported such a plan, said Linda J. Bilmes, senior public policy lecturer at the Kennedy School of Government at Harvard University.

“There is more risk for them - significantly more risk for them - in leading the country into a default situation,’’ she said.

Brown, Snowe, and Collins say that constituents have been clamoring for a resolution to the issue, with many particularly concerned about whether Social Security checks will go out if the sides are unable to broker a deal.

“I return home to Maine nearly every weekend, and people are telling me that they are frustrated with the lack of progress in Washington. They understand that this is a very serious situation, and they want this current impasse to end and an agreement to be reached,’’ Collins said.

After months of talks over crafting a long-term plan to stanch the government’s red ink, the pivotal issue continues to be whether it would include tax increases.

President Obama has called for ending some corporate tax loopholes and the tax cuts passed under President George W. Bush for the richest 2 percent of Americans to raise $1 trillion over a decade.

That would be combined with $3 trillion in spending cuts, including from such entitlement programs as Social Security and Medicare.

Republicans have publicly said they will only support a package of spending cuts.

If such a deal cannot be cobbled together, they would refuse to vote to raise the nation’s debt limit, which Congress has increased regularly and unconditionally since the 1980s.

With the debt ceiling now approaching $14.3 trillion, many House Republicans elected with support from the Tea Party movement have dug in their heels.

A few have insisted that failing to raise the debt limit would not be as catastrophic as Obama has asserted.

House Republicans, meanwhile, revealed yesterday that they will vote next week on a proposal that includes a push to amend the Constitution to require a balanced annual budget.

Although the package, which also includes limiting federal spending to a designated percentage of the overall economy, is expected to win passage in the GOP-controlled House, it stands little chance of advancing in the Senate, which the Democrats control.

A Brown spokesman said the senator supports the balanced budget amendment.

Snowe, a three-term senator who has long been a key moderate, could be particularly vulnerable to attacks from conservatives over the debt limit imbroglio. Tea Party activists have vowed to wage a battle against her in the primary.

Like Brown, she has been clear that the debt limit must be lifted. But she has also been clear that raising taxes should not be part of the equation, though she supports closing tax loopholes and ending subsidies.

“Higher taxes won’t result in job creation. I would tell the president what I told him in February 2009: we need an overhaul of the tax system, not more complexity and higher rates,’’ she said yesterday in an e-mailed statement.

While any debt limit deal would likely face a House vote first, scenarios under consideration would have the Senate take the initial vote to give the measure momentum before it reaches the House.

In such a case, the negotiators would need support from such centrists as Brown, Snowe, and Collins, said Sarah A. Binder, a senior fellow at the Brookings Institution.

“I don’t know if they have any leverage over the shape of the deal, but their votes become critical to making it happen,’’ she said.

Theo Emery can be reached at temery@globe.com. Follow him on Twitter @temery.

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