Until now, the Republican mantra has been no tax increases under any circumstances as part of a deficit-reduction package. But that wall of resolve may be cracking a little. With mounting concern that defense spending will take a severe hit as part of the Super Committee’s budget-slashing proposals, a prominent Republican is signaling the unthinkable: raising tax revenues to spare the Pentagon deeper cuts. Rep. Howard “Buck” McKeon, R-Calif., chair of the House Armed Services Committee, said on Thursday that while he opposed tax increases, he was open to boosting revenue if there was no alternative to protect against hundreds of billions of dollars of additional defense cuts.
"We're going to have to stop repeating ideological talking points and address our budget problems comprehensively, through smarter spending and increased revenue," McKeon said at a hearing on Capitol Hill about the future of the Pentagon’s budget.
This isn’t the first time McKeon has used the T-word in trying to stave off defense cuts beyond the reductions already agreed to by Congress and the Obama administration. In early September, McKeon gave a speech at the American Enterprise Institute, a conservative think tank, declaring that the drive for defense cuts has been “coming at us in a rapid-fire, escalating effect.”
“I have never voted for a tax increase,” McKeon said, but if forced to choose between a hike and deeper defense cuts, “I would go to strengthen defense.” With the U.S. still locked into two shooting wars in Iraq and Afghanistan, the Middle East in turmoil and Iran-U.S. relations terribly strained, the Obama administration and defense hawks on Capitol Hill are worried about the risks of a hollow military if the cuts continue.
Taxes have been a sticking point in budget talks for months. House Speaker John Boehner, R-Ohio, and other Republican leaders insist tax increases are off the table and instead favor trimming entitlement programs like Medicare and Medicaid. President Obama and Democrats insist on raising tax revenues on high-income individuals and corporations.
These sharp ideological differences have added pressure on the bipartisan 12-member Super Committee—tasked with finding an additional $1.2 trillion in deficit reduction savings by Thanksgiving—to forge a compromise plan. Both Democrat and Republican members on the committee said everything is on the table and even the Pentagon’s budget could face the chopping block. If the panel deadlocks or Congress rejects their proposal, automatic across-the-board spending cuts kick in, including $600 billion to the Pentagon’s budget.
The Pentagon’s budget has nearly doubled to $700 billion over the last decade since the 9/11 attacks and with lawmakers eager to seek spending cuts, it too has become a target. That has defense hawks and Defense Secretary Leon Panetta fearing the worst.
McKeon, a champion of the Defense Department has been on a crusade to save the Pentagon’s budget from the Super Committee. POLITICO reported that he has met with senior lobbyists for defense contractors like Lockheed Martin, General Dynamics and Boeing to help coordinate the industry’s lobbying strategy. And he has even launched a PR campaign in the conservative think tank world.
On Tuesday he said he met with Super Committee co-chairman Jeb Hensarling, R-Tex., and then with Boehner on Wednesday. After his meeting with Hensarling, McKeon said the co-chair told him he would “do all he can to make sure they come out with a solution”.
“We’ve gone past cutting the fat,” McKeon said at a press conference on Capitol Hill Thursday. “We’ve gone past cutting the muscle. If the Super Committee is not able to do their work and sequestration [automatic spending reductions] cuts in, it’s all over. The Buck stops here. No more cuts to defense.”
One day ahead of the deadline for all major committees of Congress to submit advice to the Super Committee, McKeon and nearly a dozen Republican members of the House Armed Services Committee submitted a memo urging the panel to refrain from further cuts that would “break the back of our Armed Forces while slowing our economic recovery, and do little to resolve our debt crisis,” they wrote.
Earlier on Thursday, Panetta said the military can’t be hollowed and cutting more than roughly $450 billion from defense spending over the next 10 years would devastate the military. "I don't say it as a scare tactic, don't say it as a threat," Panetta told the House Armed Services Committee. "It's a reality."
Panetta said that these cuts, part of the debt-reduction package passed in August to slice about $1 trillion from agency budgets over 10 years, are already proving difficult. He said a second round of cuts to the Pentagon’s budget would be “disastrous” and urged the Super Committee to find a compromise on a deficit reduction package.
"I have promised that we do not have to choose between national security and fiscal security," Panetta said in his first policy speech since taking office in July. "To that end, we are adjusting our strategy and rebalancing our military to better confront the most pressing security needs. As a Department, we have to seize this moment as an opportunity to think hard about the future security environment and the military we will need to face it."