Dems on Obama fiscal commission raise conservative hackles with talk of ‘pro-growth’ tax hikes

Two immovable facts face Democrats on President Obama’s fiscal commission: They don’t see any way to alleviate the country’s debt without raising taxes, and they know most voters hate the thought of any tax increase.

Leading Democrats on the commission tried during the first week of meetings to finesse their way toward a discussion of what they consider inevitable — by arguing that any tax hikes would be “pro-growth.”

“If we can put forward some practical proposals that control the rate of spending in the future and that raise revenues in a pro-growth way, I think we’ll get a hearing in the Congress,” said Alice Rivlin, a former White House budget director for President Jimmy Carter, who is one of 18 commission members.

If you didn’t read the word “tax” in the previous sentence, that’s because most who favor raising taxes don’t like to use the word. Instead they use “revenue,” as in the money that comes to the government from taxpayers.

Commission co-chair Erskine Bowles made clear last week that any recommendations he puts forth or supports by the Dec. 1 due date will include higher taxes. The three working groups that he set up to meet weekly over the next several months are focused on mandatory spending, discretionary spending and revenue reform.

Any solution is “going to involve revenue, and we have to face up to that,” he said. Bowles, a former White House chief of staff to President Clinton, also followed Rivlin’s tack, arguing that any tax increase would have to be good for the economy, business, job creation, etc.

“I want to make sure that any time we discuss revenues that we don’t do anything that has a negative impact on economic growth,” Bowles said.

Rivlin went so far as to say, at a summit hosted by the Peterson Foundation, “one can make a case for being a little bit conservative, especially on spending.”

Even Senate Minority Whip Dick Durbin, Illinois Democrat, got into the act, telling “bleeding heart liberals” that they should expect cuts to spending on things they value most.

However, conservative tax and budget experts were not overwhelmed

“I have no idea what they’re talking about,” said Doug Holtz-Eakin, a former director of the Congressional Budget Office who was a top economic adviser to Sen. John McCain during his presidential run.

Holtz-Eakin said the rhetorical nods to conservatives – in particular the talk of “pro-growth” tax hikes – are just words until someone takes a policy position.

“I want to see them write it down. Anyone can say that,” he said.

Ryan Ellis, policy director at Americans for Tax Reform, one of the most vigorous anti-tax groups in Washington, said “pro-growth” tax hikes don’t exist.

“They’re all anti-growth, any additional taxes on top of our existing tax burden, by definition,” said Ryan Ellis, policy director at Americans for Tax Reform, a group that is against most tax increases.

“Any time you take tax dollars out of the private economy, you’re taking away the seed corn of economic growth. You’re crowding out the private sector. It’s like taking oxygen away from a fire,” Ellis said. “To talk about doing it in a pro-growth way strikes me as absurd. You’re talking about doing the least amount of damage, not helping anything.”

Roberton Williams, a senior fellow at the Tax Policy Center, has a much different philosophical orientation on taxes than Ellis, but agreed that tax increases would not be “pro-growth.”