WASHINGTON -- Grover Norquist's grip on the Republican Party's tax policy slipped dramatically on Tuesday, a development that is likely to have significant repercussions on the debate over spending, revenue and the federal deficit.
Norquist, the head of Americans for Tax Reform and a leading party power broker for a generation, drew a hard line in the sand against repealing ethanol subsidies, arguing that ending the tax breaks is equivalent to a tax increase and therefore a violation of The Pledge -- a document nearly every Republican has signed promising never to vote to raise taxes.
Thirty-four Senate Republicans walked nonchalantly across that line on Tuesday, voting to move forward on an amendment sponsored by Sen. Tom Coburn (R-Okla.) that would repeal the subsidies.
Norquist has been vicious in his recent talks on Coburn, charging that his amendment means he "lied his way into office" and is breaking the pledge.
Coburn was unmoved. "I think you all think he has a whole lot more hold than I think he has," Coburn told reporters before the vote. "I don't disagree with him on a lot of principles. The fact is it's not a good position to put yourself in when you say, 'Here's a tax expenditure that nobody needs, and yet we have to give somebody else a tax cut to take away this.'"
Late on Friday, as it became increasingly clear the Republican conference was shifting toward Coburn, Norquist performed a bit of legislative gymnastics, releasing a statement saying that it was okay to support the Coburn amendment -- the same measure he'd savaged for weeks -- as long as Coburn also supported an amendment from Sen. Jim DeMint (R-S.C.) that would cut the estate tax and repeal ethanol subsidies. DeMint was asked whether he'd vote for the Coburn amendment regardless of whether he was able to also vote for his amendment. He said he is offering his amendment to avoid making that decision, but that he would vote down the final bill.
Despite Norquist's attempt to stick the landing, the break with him has major implications for the debt ceiling negotiations going on just off the Senate floor Tuesday with Vice President Joe Biden. Republicans are insisting that any measure that increases revenue be off the table. But ending ethanol subsidies is a way of increasing revenue, putting the entire Republican Party in the tricky position that Coburn suggested Norquist was in.
Lead Senate Republican negotiator Jon Kyl (Ariz.) said Tuesday he is supporting the Coburn amendment, but added that revenue increases remained off-limits in the debt ceiling talks.
Kyl, the number two Republican in the Senate, rejected the notion that the ethanol subsidy vote represented a break from the Republican position -- a position that will become increasingly hard to maintain. "I'm not looking at it for that reason. I'm just looking at it from the standpoint of tax policy. We shouldn't be picking winners and losers," he said.
As for Norquist: "I don't know what Norquist has to do with it or what he says about it."
Despite the Republican support, the effort to move forward on Coburn's amendment fell short of the 60 votes needed because most Democrats voted against it on procedural grounds. Majority Leader Harry Reid (D-Nev.) was angered that Coburn filed cloture, which is not against the rules but is a privilege customarily reserved to the leader. Forty-six Democrats and one Independent ultimately voted against the amendment, while five Democrats and one Independent voted in favor of it.
"Go home and explain to your constituency you didn’t vote on a bill, an amendment, because you didn’t like the way it was brought up, regardless of the substance," Coburn told HuffPost. "Rule 22 allows any senator to offer an amendment, so I didn’t do anything out of the ordinary. The only reason I used that procedure is because they don’t allow us to have any votes."
Reid, as well as Sen. Dianne Feinstein (D-Calif.), who supports repeal, pleaded with Coburn to delay his vote and go through normal procedures. Coburn declined.
Sen. Lamar Alexander (R-Tenn.), the number three Republican, also broke with Norquist. "I can only speak for my own position," he said when asked how he squared his vote with Norquist's pledge. "In my view, a good way to reduce the debt is to get rid of unwarranted tax breaks."
Is this a significant rebuke to Norquist?
"This is a vote for lower food prices and lower federal debt," Alexander responded.
Norquist has long been critical of Republicans who have focused attention on the deficit, arguing instead that the target should be spending. Norquist knows there are only two ways to close the deficit -- hiking taxes and cutting spending -- and worries that the American people will gravitate toward higher taxes once they are confronted with the reality of spending reductions.
Coburn got a boost Monday night when Koch Industries, perhaps the biggest player in GOP politics, sent a letter to him specifically backing his amendment. "We’ve got a lot of votes," Coburn told HuffPost Tuesday morning, arguing that if people who made money from the subsidies could support repeal, surely so could Republicans. "They’re refiners. They don’t want the money."
The Koch brothers are among the biggest backers of the Republican Party and conservative groups. The Koch Industries political action committee has been one of the biggest donors to GOP lawmakers and candidates, contributing over $1 million to Republicans from 2009 to 2010.
The Koch PAC has already turned on the campaign money spigot for 2012. According to campaign finance records, it gave $299,000 to GOP lawmakers, candidates and party organizations through the end of April. That total far surpasses the PAC's giving in January through April 2009, the most recent election off-year, and comes close to the more than $300,000 the PAC gave to GOP lawmakers, candidates and party committees over the same time period in 2010.
The Koch brothers' importance has only increased in the wake of the Citizens United Supreme Court ruling, which allows them to use their private company's money to secretly fund attack ads or prop up national organizations. They have given millions to conservative groups, including policy think tanks the Heritage Foundation, the Cato Institute, and the Mercatus Center and Tea Party activist groups like Americans for Prosperity.
The Kochs have already promised to raise $88 million for conservative action around the 2012 election.
The highly influential Club for Growth has also made the Coburn amendment a "key" vote -- meaning Republicans who vote against it will be scored lower and be vulnerable to a primary challenger from the right.
The group's founder, Pat Toomey, is now a senator from Pennsylvania and is backing Coburn.
"Grover's accomplished something significant in his whole pledge. The priority that it's been given has been a useful tool in uniting Republicans. But I don't know if there's any Republican more committed to low taxes and pro-growth policies than I've been, and I just see this as a very badly thought-out policy," Toomey told reporters Tuesday. "We have a tax code that's littered with all kinds of credits that amount to, in many cases, a disguise for more government spending."
Sen. John McCain (R-Ariz.), who took a beating in his 2000 presidential campaign for his opposition to ethanol subsidies, has been a longtime opponent of Norquist. "Everybody's entitled to their own opinion," McCain said, relishing his foe's defeat. "I have been against ethanol subsidies since they've been around. They're a disgrace. It's my opinion that they're a disgraceful subsidy that is unwanted and a waste of taxpayer dollars."
Freshman Sen. Kelly Ayotte (R-N.H.) broke with Norquist, too. "I don't view it as a tax increase, I think this is a subsidy that should be eliminated," she said. "It makes sense to eliminate it not only for the impact it has on our food supply, but it is also costly for our country."
Minority Leader Mitch McConnell (R-Ky.) walked past reporters without responding to questions about the vote.
Sen. John Cornyn (R-Texas), head of the Republicans' campaign arm, bucked Norquist, too. "Cutting out special subsidies hardly is the same thing as raising taxes," Cornyn said, adding that he supports ending some subsidies as part of tax reform to "broaden the base" on taxes.
Freshman Rep. Rob Portman (R-Ohio), who also supported the amendment, said eliminating subsidies should not be considered a tax increase because they can be equated with spending programs. "In this environment I think some of us would consider these more tax expenditures rather than tax preferences," Portman said.
Sens. Roy Blunt and Mike Johanns, from corn-producing Missouri and Nebraska, respectively, both opposed Coburn's amendment, but they said it was because they support the subsidies, not because of Norquist's tax pledge.
UPDATE: 3:24 p.m. -- Shortly after the vote, Norquist's group, Americans for Tax Reform, released the following statement:
Today the US Senate failed to invoke cloture on S. 782. This represents a lost opportunity for the Senate to vote on killing the government’s unfair myriad of ethanol preferences. Had cloture prevailed, through a series of amendments, the Senate could have voted to rip out ethanol, root and branch, from the federal government. Amendments offered by Senators DeMint, Thune, and Coburn, would collectively have ended the Renewable Fuel Standard (ethanol mandate), tax credit, and import tariff.
ATR alerted Taxpayer Protection Pledge signers that voting for ethanol tax credit repeal—which is a $6 billion tax increase—is consistent with their pledged commitment to their constituents provided they also supported a tax cut offset—such as the death tax repeal contained in the DeMint amendment.
There is a consensus conservative position that the government’s support for ethanol needs to end. Unfortunately, this view is not shared by Sen. Tom Coburn (R-Okla). On the Senate floor last night Sen. Coburn said the following: “I support ethanol…I support a mandated level of ethanol.” ATR and the overwhelmingly majority of the conservative movement support full repeal of the ethanol mandate, ethanol tariff, and the ethanol tax credit.
ATR looks forward to working with conservative allies on and off Capitol Hill to fully repeal the government’s buttressing of the ethanol industry.
UPDATE: 6:21 p.m. -- Republicans who broke with Norquist are already facing political consequences. The Massachusetts Democratic Party was quick to rip Sen. Scott Brown (R-Mass.) for breaking his pledge, releasing the following statement:
BOSTON – Today, U.S. Senator Scott Brown cast aside a pledge he made to a conservative anti-tax group when he voted along mostly party lines to advance a measure that would have eliminated tax breaks for corn-based ethanol without lowering taxes.
“During his campaign for U.S. Senate, Scott Brown told voters what he thought they wanted to hear and now that he’s in Washington, he’s breaking promises right and left,” said Massachusetts Democratic Party spokesman Kevin Franck.
The junior Senator voted for cloture on an amendment offered by Republican Senator Tom Coburn of Oklahoma. Coburn’s amendment, which would have ended six billion dollars in subsidies to the producers of corn-based ethanol, did not receive the necessary 60 votes needed to move forward.
“It’s starting to seem like Scott Brown’s main objective in Washington is to follow the Republican herd, not serve the best interests of the Commonwealth,” Franck added. When you claim to represent the people of Massachusetts, but you vote with DC Republicans 90 percent of the time, something doesn’t add up.”
Brown first signed on to the so-called Taxpayer Protection Pledge pushed by the right-leaning Americans for Tax Reform during his campaign for U.S. Senate in 2009. He challenged his Democratic opponent to also take the pledge.
"I, Scott Brown, pledge to the taxpayers of Massachusetts and to the American people that I will: ONE, oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses; and TWO, oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates."