As Washington begins to digest the bipartisan deal to hike the debt limit, one thing that’s clear that it will set up an obvious intra-conservative battle between defense hawks and the anti-tax crowd.
For decades, the central difference between conservatives and liberals when it comes to fiscal policy is that liberals want to reduce the deficit through tax hikes and cuts to defense spending while conservatives want to focus on entitlements and other non-defense spending without raising taxes. Given that any deal between the two parties would have to involve Republicans giving something up, there’s always been the potential for tension between these two strands of conservatism. That underlying tension is going to rise to the surface in the coming months.
The anti-tax crusaders, led by Grover Norquist (with assistance from elements of the tea parties) have already won the first stage of this battle. Norquist urged Republicans to hold the line on taxes, but he has also argued that the conservative movement should get behind cuts to the defense budget. And the current deal includes defense cuts, but not tax increases. What’s more, it creates a joint Congressional committee to find additional savings, and if the committee cannot find enough, it triggers further defense cuts – but not any tax increases.
President Obama said during his brief remarks tonight that he would continue to push for a “balanced approach” (i.e. higher taxes). No doubt, Democrats on the Congressional committee will be insisting on raising taxes as part of deficit reduction, and Republicans will be torn in both directions. Either they agree to tax increases, or they trigger automatic defense cuts on top of the cuts that they already agreed to.
No doubt, we’ll start to see more and more opposition from conservative defense hawks to slashing the military budget, while the Norquist crowd will continue to push Republicans to accept more defense cuts to avoid any increase in taxes.
This is likely to be the opening of significant debate among conservatives that will likely continue for decades to come, given the increasing pressure posed by entitlements.