Trouble in tax-cut paradise — redux

I’m still not prepared to believe Republicans in Congress, or the White House, would accept some semblance of fiscal sanity, but there are signs that the unthinkable is suddenly not outside the realm of possibility.

Cracks are appearing in Republicans’ once-solid opposition to tax increases, as the White House and Congress confront budget pressures from President Bush’s proposed Social Security overhaul and deficit-reduction goals.

Mr. Bush’s refusal last week to rule out lifting the cap on income subject to Social Security taxes reflects the shifting tenor of debate within his party. In the Senate, where Republicans aim to gain enough Democratic votes to advance Mr. Bush’s plan for private Social Security accounts, Budget Committee Chairman Judd Gregg of New Hampshire says that “You are going to have to generate some revenues” to achieve that goal.

House Republicans’ continued opposition to talk of tax increases was evident in their barbs about Mr. Bush’s trial balloon last week. But former Speaker Newt Gingrich says the administration’s commitment to shoring up Social Security’s solvency means that, “at the end of the fight, there will be a tax increase on the core Republican base.”

Keep the context in mind. Bush has argued on countless occasions that the nation actually needs more tax cuts in the form of making his old cuts permanent. Now, as Bush’s fiscal policies have become a startling embarrassment, the ground has shifted dramatically — there’s less talk about permanent cuts and more talk about new tax increases.

Something to keep an eye on in the coming months.