Why the GOP Might Accept New Revenue

     First of all, Lindsay Graham's comments yesterday could suggest a breakthrough on raising taxes on the rich:

     “I hope we’ll talk about this. Now is the time to grow up. Both parties need to grow up. We need to find a chance to do the big deal,” he said.

    He added: “I’ll challenge the president, ‘Mr. President let’s do things that will straighten out the long-term indebtedness in this country… I’ll raise revenue, you reform entitlements and both together we’ll set aside sequestration in a way that won’t disrupt the economy and hurt the Defense Department.”

    Read more: http://www.politico.com/story/2013/02/lindsey-graham-sequester-going-to-happen-88058.html#ixzz2M1PEFfqK

    That can't but be seen as in some way muddling the GOP message as they've been insisting that revenue is off the table. Graham seems to be offering new revenue for entitlement reform-yet another "big deal."

    This then is potentially big news. Again, it at least shows a breach in the GOP line. The Virginia GOP is another very large breach. You have Bob McDonnell sounding the alarm. Now you have some GOP Reps from Virginia also doing so. 

     "Most Republican congressmen are resigned to the fact that the sequester will take effect Friday.

But a trio of Virginia Republicans is fighting back, using their home turf as a backdrop for the pain they believe the massive spending cuts will wreak."

     "On Monday, Reps. Scott Rigell, Randy Forbes and Rob Wittman lashed the sequester at a forum in a packed downtown hotel ballroom. The 300-person crowd had little appetite for placing blame. To this military community, the sequester is personal."

     "Virginia Beach and nearby Newport News, represented by Rigell in the 2nd Congressional District, is now at the center of the sequester debate as it’s home to a large population of active and retired servicemen and women, military interests and the Newport News shipyard. President Barack Obama will use the shipyard as a backdrop on Tuesday to call on Congress to stop the sequester."

     "All three Republican congressmen said they’ve been sounding the alarm over sequestration for a year, and they agreed that there isn’t much use in pointing fingers three days before the cuts are set to be implemented. They are just ready to work on a way to fix it."

    "At this point, Rigell, Forbes and Wittman represent a small minority of Republicans who are actively trying to stop the sequester before its implementation. Those Republicans are mostly from congressional districts with large military populations or bases that could see a huge impact from the large cuts to the Pentagon budget expected as part of the budget tightening."

    "Many in the Republican Conference believe that the sequester should be allowed to take hold even if that means some pain in their communities. They think that’s the only way Washington will ever tighten its belt. And they are completely unwilling to swallow any hint of tax hikes Obama insists on as part of a deal to avoid or replace the sequester."

     "But even among the three Virginia congressmen, there are divisions on how to approach the cuts. Wittman said there are smarter ways to address deficit reduction that don’t hurt the military. Rigell said there are ways to cut defense spending that wouldn’t be as harmful as the sequester. Forbes said he introduced a bill that would take national defense spending out of the sequester altogether and not cut spending elsewhere."

     Read more: http://www.politico.com/story/2013/02/virginia-republicans-stop-sequester-88063.html#ixzz2M1SJY4k2

     Rigell goes the furthest even suggesting an openness to raise new revenue:

      Rigell even has expressed openness to new revenues as part of the mix to avoid the sequester and get the budget back on track.

“We too, as Republicans, have contributed to some of this gridlock,” he said, referencing the Americans for Tax Reform pledge to not raise taxes. “We need a comprehensive agreement.”

       Should the Senate pass a bill, Rigell said, he plans to write to his leadership to at least consider it.

“What I do not want to happen [is] for the House go into lockdown and reject the Senate bill but not offer an alternative — that’s unacceptable to me. At that point, I’ll call our leadership out and say, ‘No, we’ve got to produce a bill,’” Rigell said after the forum.

       Wow. He admits that the GOP has some fault, is willing to consider revenue, and most doesn't want to see the House go in lockdown. Be still my beating heart. 

        Realistically, this shouldn't be so surprising. You have to understand the psychology of Red State, Republican voters. A Republican voter-unlike a Republican politician-is someone who is very opposed to the idea of government spending in the abstract however is just as opposed in reality to cuts in government spending that benefits them. They hate the spending the government does for the other guy. 

        P.S. Alan Blinder makes the point that we may not need a "Grand Bargain" anymore. There has been little attention to the fact that we've seen a major cut in the medical cost curve the last few years. We also have already had $2.6 trillion in cuts-the sequester, which we don't want to do-would get us close the original "Grand Bargain" of $4 trillion set up in 2011. 

       http://online.wsj.com/article/SB10001424127887323495104578313982084633620.html?mod=WSJ_hp_mostpop_read