A brief history of the Coburn-Norquist tax spat, and why it matters 

The growing dispute between Sen. Tom Coburn, R-Okla., and Americans for Tax Reform President Grover Norquist boiled over on national television on Sunday, with Coburn dismissing ATR as a “special interest” on NBC's “Meet the Press” and Norquist later firing back that Coburn “lied his way into office.” While it's easy to dismiss the back and forth as insider squabbling, in reality the spat has implications for the broader debate over tax policy and the national debt.

For those unacquainted, Norquist's ATR asks candidates to sign a “taxpayer protection pledge” aimed at preventing tax increases. For U.S Senators, it reads (PDF):

I, _________, pledge to the taxpayers of the state of _________, 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.

When he ran for Senate, Coburn signed the pledge as do most Republicans, but over the past several years has been clashing with Norquist over policies that would conflict with the second part of the pledge. As Ryan Ellis, the director of tax policy at ATR, explained to me today, this rift started in 2007 when Coburn offered a health care reform proposal that got rid of the tax exemption for employer-based health insurance without matching it on a dollar for dollar basis with cuts or credits elsewhere. This dispute exploded when Coburn backed President Obama's fiscal commission's deficit reduction plan. Though the plan simplified the tax code by going after various tax deductions and credits and it lowered rates, it still had the government pocket additional money to pay for government spending, meaning a net trillion dollar increase in tax revenues that ATR opposed.

Last month, Coburn lit into Norquist for opposing his efforts to get rid of ethanol tax breaks, while Norquist insisted that his opposition arose not because he was an ethanol fan but because Coburn didn't find offsetting tax cuts as the pledge requires.

With this as the backdrop, Coburn appeared on “Meet the Press” yesterday to talk about his negotiations as part of the “Gang of Six” U.S. Senators working on a bipartisan compromise on the debt. Coburn said he would be willing to support a compromise on taxes along the lines of the fiscal commission.

“I think if you go back and look at the commission's report, what we were talking about is getting significant dynamic effects by taking away tax credits, lowering the tax rate and having an economic increase that will actually increase the revenues to the federal government,” Coburn said. When asked by host David Gregory about how this conflicted with the tax ATR tax pledge, Coburn responded: “I think which pledge is most important, David, is the pledge to, to uphold your oath to the Constitution of the United States or a pledge from a special interest group who, who claims to speak for all of American conservatives when, when in fact they really don't. The fact is, is we have enormous urgent problems in front of us that have to be addressed, and they have to be addressed in a way that will get 60 votes in the Senate, a majority vote in the House, and something that the president will sign.”

Norquist quickly fired back in the Politico. “Coburn said on national TV today that he lied his way into office and will vote to raise taxes if he damn well feels like it, never mind what he promised the citizens of Oklahoma,” Norquist said. “Sen. Coburn knows perfectly well that the pledge is not to any organization but to the citizens of his state. He lied to them, not to Americans for Tax Reform.”

The ongoing dispute probably wouldn't be that big of a deal if it were between Norquist and, say, Sen. Olympia Snowe, R-Maine. But the fact that it's coming from Coburn, somebody with generally unimpeachable conservative credentials makes it more interesting. If Coburn defies the taxpayer protection pledge and grassroots conservatives still embrace him, it may provide cover for other Republicans to follow suit. Though, as Ellis noted to me, few have joined him thus far.

It's also important because it raises the question of what conservatives are willing to give up to get some agreement on the debt and tax reform. One problem with the Coburn approach is that if the opening bid is something along the lines of the fiscal commission proposal, then it moves the debate to the left of where it is under the Ryan proposal. And as Norquist has pointed out, when Republicans have agreed to increase taxes in exchange for spending cuts in the past, we get the higher taxes, but the spending reductions don't materialize.

Coburn has been one of the most reliable voices for small government conservatives in the Senate, and has been that way since well before the Tea Party movement was born. His fervor to tackle the nation's debt crisis and to get rid of junk and special interest subsidies in the tax code is admirable and earnest. At the same time, agreeing to increase taxes – even in the name of a simplified system – sets up a troubling precedent. If Coburn is going to argue that it absolutely has to be done to avert the debt crisis, it should only be done in exchange for serious (and binding) entitlement reform and spending cuts.

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