Lindsey Graham Backtracks on Taxes to Avoid Defense Cuts

Senator's pivot on taxes is the latest move in Washington's high-stakes, election-year game of chicken.

By + More
Graham
Sen. Lindsey Graham, R-S.C. speaks to reporters following a Republican policy meeting on Capitol Hill in Washington.

After raising eyebrows by initially voicing support for federal tax hikes to stave off more national defense cuts, a key pro-military senator now says he favors raising the needed revenue "without raising taxes."

South Carolina Republican Sen. Lindsey Graham is "in favor of increased revenue, but there are ways to do that without raising tax rates," says a senior Graham aide. "Closing loopholes and deductions in the tax code will bring in revenue, and that is what Senator Graham was talking about."

 Graham caused a stir across Washington by telling the New York Times he has "crossed the Rubicon" on his party's long-held opposition to higher federal taxes.

The Republican's comments, however, were met with a cool collective response on both ends of Pennsylvania Avenue. "We don't need to be raising taxes for defense or for any other reason," says GOP Rep. John Campbell of California, a House Budget Committee member. "What we need is to reform the tax system." White House press secretary Jay Carney told reporters Monday that President Obama and his administration would not "cheer" individual Republican defections on tax hikes aimed at solely paying to stave off more national defense cuts.

The Defense Department faces cutting planned spending by $450 billion over the next decade, and could be forced to cut $500 billion more over the same period if Congress fails to pass a $1.2 trillion debt-paring deal this year. Graham and other hawkish congressional Republicans--joined by President Obama's Pentagon leaders--worry a second batch of deep cuts will erode America's military power.

After U.S. News & World Report--and other media outlets--reported on White House and Republican reaction to Graham's comments, his office moved to walk them back.

[Check out our collection of political cartoons on defense spending.]

The Graham aide paints the South Carolina Republican as in lockstep with conservative House budget watchdogs like Campbell. "What Congressman Campbell said ... is actually what Graham is talking about," the senior aide tells U.S. News & World Report.

Former officials and aides described Graham's trial balloon as akin to a NASCAR race on a fast track. Sometimes in the early or middle stages of a race, a driver will suddenly break from the pack, testing the waters to see if other drivers will help him draft to the front of the field.

"That's what it appears Graham was up to," says Larry Korb, a former Pentagon official now with the Center for American Progress. "But no one went with him. So the fallback is to say you were talking about closing loopholes. That's how you get around the pledge."

Korb was referring to the anti-tax increase pledge that Grover Nordquist, head of Americans for Tax Reform, has strong-armed nearly 300 GOP members of Congress and the entire field of the 2012 party's presidential candidates to sign.

Graham had to walk back his Rubicon-crossing remark, Korb says, because it moved a senior Republican senator out of line with the party's presidential nominee, Mitt Romney. "Otherwise, he's doing to Romney what [Bill] Clinton and [Ed] Rendell did to Obama," Korb quipped, referring to the former president and former Pennsylvania governor's criticism of the sitting commander in chief.

"Everyone knows revenue is what this will come down to," says Gordon Adams, who oversaw national defense budgeting for the Clinton administration. "The problem with what Graham said is you can't say this now. You can't show your cards at this stage.

"What this shows is this is an election year. Deep in the cloakrooms of the Republican caucus, they are talking about a deal. And they know defense and revenues will have to be on the table," says Adams. "But you just can't show your cards until you know who wins the White House and the Congress in November."

John T. Bennett covers national security and foreign policy for U.S. News & World Report. You can contact him at jbennett@usnews.com or follow him on Twitter.

  • Think Tank Calls Budget Cuts an Opportunity to Reform Military
  • GOP's Graham on an Island With OK on Taxes to Limit Military Cuts
  • Check out U.S. News Weekly: an insider's guide to politics and policy