Hatch will oppose any deficit-reduction deal that includes raising taxes

Sen. Orrin Hatch (R-Utah) poses a significant obstacle to any bipartisan deficit reduction deal in the Senate that would raise taxes, according to Senate aides and activists. 

Hatch would have significant say over any deficit-reduction as ranking Republican on the Senate Finance panel, which has jurisdiction over taxes, Social Security, Medicare and Medicaid.

He told conservative activists shortly before the April recess that he would oppose any deficit-reduction package that raises taxes, period.

{mosads}“He has stressed no tax increases,” said Grover Norquist, president of Americans for Tax Reform, a prominent anti-tax group, speaking of assurances Hatch made at a recent Tax Day event with conservatives. “That’s what he told me when he was at the April 14 press conference. Hatch was there and stressed no tax increases. Period.”

Senate sources say Hatch has taken an equally hard line in discussions within the Senate.

“Hatch has been insistent on no new taxes,” said a Senate aide.

In a Senate floor speech last week, Hatch delivered a strong rebuttal to President Obama’s call for a multi-pronged strategy to reduce the deficit.

“He called for tax reform, but not to make our overly-burdensome code more efficient, but to spend more of the American people’s money,” Hatch said of the president’s speech.

“Raising taxes has never and will never solve our deficit crisis,” he added. “When taxes are hiked in the name of tackling our debt, they’ve been used for more spending.”

Hatch controls only one vote out of a hundred in the upper chamber, but as the senior Republican on Finance, he wields considerable influence in the GOP caucus.

He could imperil any bipartisan deal that emerged from the Gang of Six next month that would raise revenue by eliminating narrow tax breaks.

And he will make it more difficult for Senate Finance Committee Chairman Max Baucus (D-Mont.) to move any legislation that raises taxes through the panel.

This may force Baucus to reach out to his long-time negotiating partner, Sen. Chuck Grassley (R-Iowa), instead.

Hatch has little room to maneuver on tax reform. He faces a potentially tough reelection race in the Utah Republican primary next year, and conservative activists say supporting legislation that increases taxes could doom his bid.

Andrew Roth, vice president of government affairs at the conservative Club for Growth, said Hatch would prompt a strong backlash if he supported a deficit-reduction package that raised taxes through tax reform. 

“I think it would make the chances against his reelection probably insurmountable,” said Roth. “Conservatives in Utah already have a high standard for their representatives in Congress. They don’t suffer transgressions lightly.”

Club for Growth spent $211,000 to defeat former Sen. Robert Bennett in the 2010 Utah Republican primary and help elect Sen. Mike Lee (R-Utah), a founding member of the Senate Tea Party Caucus.

Conservatives have pressed Hatch to take a strong stance against tax increases since last year, as he prepared to take over the senior GOP post on the powerful committee.

They wanted him to stake out a clear position against tax increases in hopes of steering Obama’s fiscal commission away from endorsing them.

“Everybody knows I’m a tax cutter and not a tax increaser, so the odds are that I probably couldn’t support something that would increase taxes, especially given the amount of spending going on,” Hatch told The Hill in May.

The jockeying, however, did not stop the fiscal commission from proposing tax reforms that would raise taxes by at least $785 billion over 10 years.

Three Republicans on the panel, Sens. Tom Coburn (Okla.) and Mike Crapo (Idaho) and former Sen. Judd Gregg (N.H.), voted for the proposal.

Two of those men are now members of the Gang of Six, the bipartisan Senate negotiating group that is trying to craft a legislative package reflecting the proposals of the deficit commission.

Coburn said in a radio interview Thursday that the group could call for tax increases on some people but that taxes would not be raised by a significant amount.

“There’s no plan to have a significant tax hike on anyone,” Coburn said on Laura Ingraham’s radio show.

But Coburn has not ruled out tax increases altogether.

“Will some people pay increased taxes? I’m sure they will,” Coburn said.

The prospect has alarmed conservatives.

Norquist says Coburn’s pledge to spare taxpayers from a “significant tax hike” is not sufficient. 

“What does he mean by saying it’s not significant? That’s a description, not a number,” said Norquist. “He didn’t really tell us anything.”

Hatch’s staunch opposition to tax increases adds to the pressure on Coburn and Crapo not to agree to higher tax rates within the panel’s eventual proposal. Both lawmakers sit with Hatch on the Finance Committee.

Hatch’s spokeswoman, Julia Lawless, said her boss firmly believes the budget crisis can be solved without tax increases.

“The fact is, keeping current tax policy in place will yield revenue at the historic average — roughly 18 percent — of the economy,” she said.

She said Hatch supports “smart fiscal policy that will hold down spending and provide hard-working American families with responsible tax relief.”