Super committee Republicans proposed a deal last week that includes only $300 billion in revenue increases, all in the form of deduction eliminations, a paltry concession that was vastly outweighed by the massive tax cut for the rich the plan also included. While the proposal was an attempt to make Republicans look like they were actually considering revenue increases as part of a deal, it was quickly dismissed by Democrats. Even anti-tax advocate Grover Norquist saw through the plan, dismissing it as nothing more than a “negotiating position.”

Super committee co-chair Rep. Jeb Hensarling (R-TX) made that clear yesterday, suggesting to CNBC’s Larry Kudlow that “any penny” in revenue increases would be a deal-breaker for the committee’s Republican members. “But listen, any penny of increased static revenue is a step in the wrong direction,” Hensarling said.

Now, however, with Democrats rebuking Hensarling’s comments as “unhelpful,” and even some Republicans agreeing that the party may need to concede on taxes, Hensarling has walked back those comments, suggesting the GOP would consider new revenues in exchange for deeper concessions — in the form of entitlement cuts — from Democrats, the Hill reports:

Republicans on Wednesday signaled they would consider higher tax revenues to win a supercommittee deal if Democrats offer deeper cuts to entitlement spending. [...]

Briefing reporters on Wednesday, Hensarling said Republicans would be “more than happy to negotiate” around a new offer from Democrats, pointedly declining to say whether $250 billion was the maximum in new revenue the GOP could accept.

“I’m waiting for the Democrats to put fundamental reform on the table,” Hensarling said.

According to the Washington Post, the GOP is beginning to undergo an “identity crisis” when it comes to taxes, as members have realized that reaching a super committee deal and balancing the country’s budget is impossible without raising new revenue.

But while Hensarling’s new position may seem reasonable on its face, it’s unfortunate that he and his party continue to hold vital entitlement programs like Medicare, Medicaid, and Social Security hostage while supporting massive tax cuts for the rich, even as a growing number of millionaires are begging the GOP to raise their taxes to help address the nation’s debt. Those actions are particularly troubling in the face of recent reports from economists who warned that such austerity measures will only push the country closer to the brink of another recession.

Rep. Jeb Hensarling (R-TX) next to Rep. Spencer Bachus (R-AL)

Rep. Jeb Hensarling (R-TX), a co-chair of the congressional supercommittee tasked with crafting a $1.5 trillion deficit reduction package, suggested that he would reject “any penny” of further tax increases in the deal currently being negotiated. Republicans on the committee so far have only offered $300 billion in revenue-increases in the form of eliminating tax deductions. Even with revenues at a 60 year low, Hensarling, who was speaking with CNBC’s Larry Kudlow, bristled at increasing static revenues (meaning he only wants revenue increases that come due to economic expansion):

HENSARLING: But listen, any penny of increased static revenue is a step in the wrong direction. We can only balance that with pro-growth reforms, and frankly the Democrats have never agreed to that. So I don’t know how many times I can tell you, that agreement’s not going to happen.

KUDLOW: I appreciate the honesty.

Watch it:

Despite new reports showing how the government subsidizes the rich, Hensarling makes clear that he would oppose efforts to close loopholes in the tax code or raise tax rates on billionaires as part of a deficit reduction package. Bloomberg News reported today that Democrats on the committee are already scaling back their revenue demands.

Rep. Jeb Hensarling (R-TX), the co-chair of the joint supercommittee that will attempt to negotiate a debt deal this fall, told the Dallas Chamber of Commerce today that he will not take any policy options off the table before the committee begins negotiating. That includes new taxes, even though Hensarling personally opposes them, the Dallas Morning News reports:

“If I start to take something off the table, then maybe Senator [Patty] Murray takes something off the table and the talks fail before they even get started,” Hensarling said, referring to the Washington state senator who co-chairs the panel. [...]

“I have an open mind, but it is not an empty mind,” Hensarling said before addressing the Dallas Regional Chamber.”

In prior negotiations, the GOP held steadfast to its no taxes pledge, a stance that is not only opposed by a majority of Americans but also played a significant role in the downgrade of the nation’s credit rating earlier this month. Republican representatives who stonewalled every attempt to raise revenue, even as corporations and the wealthy pay low taxes and oil companies continue to benefit from huge government subsidies, have come under fire during the August recess as voters slam them for signing nonsensical tax pledges instead of listening to their constituents.

The fact that Hensarling isn’t immediately discarding the possibility of new revenues is progress, but the chance that he or the GOP have had a major change of heart on revenues is likely slim. House Majority Leader Eric Cantor (R-MD) has urged his colleagues to ignore the implications of Standard & Poor’s downgrade report, falsely claiming that it did not smack Republicans for refusing any and all forms of revenue. More likely, Hensarling, who supports the GOP’s radical Balanced Budget Amendment and wants the supercommittee to revise the Affordable Care Act, is just positioning himself at the bargaining table before the supercommittee convenes for the first time.

Tax cuts have become the panacea of conservative economic thinking, but curiously, the AP reports Republicans are now lining up to raise taxes on nearly half of all Americans. In his radio address this weekend, President Obama called for an extension to the payroll tax holiday he signed into law last year, which benefits every working American, lowering the 6.2 percent tax that funds Social Security to 4.2 percent. The tax cut will expire in January, and many of the same Republican lawmakers who fought tooth and nail to preserve the Bush tax cuts for the wealthy are now coming out against an extension of the payroll tax holiday.

Why? Social Security payroll taxes mainly benefit middle- and working-class Americans, as the tax only applies to the first $106,800 of a worker’s wages. Thus, no matter how much money someone makes, they will see a maximum benefit of $2,136 from the holiday — a pittance compared to the savings for the wealthy from the Bush income tax cuts. Republicans claim these cuts for lower-income earners will do less to stimulate the economy than cuts for the wealthy or employers:

“It’s always a net positive to let taxpayers keep more of what they earn,” says Rep. Jeb Hensarling (R-TX), “but not all tax relief is created equal for the purposes of helping to get the economy moving again.”

Hensarling, the House’ fourth-ranking Republican, is right — some tax cuts do more than others to “get the economy moving again.” He just has it backwards about which cuts do that. Tax cuts for wealthy, such as those in the Bush tax cuts, are the single “least effective way to spur the economy and reduce unemployment,” according to the non-partisan Congressional Budget Office, because wealthy Americans were more likely to save their money than spend it.

Conversely, payroll tax cuts are one of the most efficient ways to stimulate economic growth, because low- and middle-income earners are more likely to spend their extra cash right away. But this analysis and similar ones from Moody’s and other experts has not disuaded Republicans from their myopic focus on tax cuts for the the wealthy only.

GOP budget guru Rep. Paul Ryan (R-WI) dismissed a payroll tax holiday in June as nothing but “sugar-high economics.” Meanwhile, presidential candidate Mitt Romney said he “would prefer to see the payroll tax cut on the employer side,” instead of for the employee. Both sides pay an equal amount for a total contribution of 12.4 percent per worker.

Indeed, the conservative dogma on taxes seems to flip for low-income earners, as many conservatives have explicitly called for the poor and middle-class to pay more in taxes.

Rep. Jeb Hensarling (R-TX)

This week, the Republican leadership named its six members of the fiscal super committee; as we detailed, the GOP’s choices are not-so-super. All six Republicans have taken the Americans for Tax Reform anti-tax pledge and support a constitutional balanced budget amendment (though Sen. Rob Portman (R-OH) and Rep. Dave Camp (R-MI) may be wavering as to whether or not they’re willing to raise revenue through tax reform).

Rep. Jeb Hensarling (R-TX) — who the GOP decided to tap as the super committee’s co-chair — has left little doubt as to where he stands on budget matters, calling Social Security, Medicare, and Medicaid “cruel Ponzi schemes.” He constantly repeats false claims about the deficit and debt and “falsely characterized the debt limit fight as a consequence of spending policies enacted by President Obama and past Democratic congresses.” There’s little reason to believe that he is willing to cut the sort of deal that would reduce deficits over the long-term in a balanced way, ensuring that the rich and corporations pay their fair share.

Yesterday, the Public Campaign Action Fund provided one more reason to be pessimistic about Hensarling’s role on the committee, noting that his number one campaign donor makes its money aiding and abetting tax dodging and outsourcing:

Hensarling’s number one career donor, for instance, are the employees and PAC of accounting giant KPMG, according to the Center for Responsive Politics. His campaign committee has received $62,250 from company donors.

A few years ago, “KPMG — one of the ‘Big Four’ that dominate global accounting work — admitted it helped wealthy individuals in the US evade tax on billions of dollars of income between 1996 and 2002.” The company agreed to pay “$456 million in fines, restitution and penalties as part of an agreement to defer prosecution of the firm, the Justice Department and the Internal Revenue Service announced today.”

In 2011, KPMG was rated second place in the “World’s Best Outsourcing Advisors,” by the International Association of Outsourcing Professionals, “the leading professional association for organizations and individuals involved in transforming the world of business through outsourcing, offshoring, and shared services.”

Corporate tax revenue has plunged to historic lows, and corporate tax reform would be a fantastic way to raise additional government revenue, if the committee found the will to do so. But it actually makes sense that a tax dodger would be Hensarling’s top donor as, in his view, corporate tax avoidance is a good reason to cut the corporate tax rate.

House Speaker John Boehner (R-OH) and Senate Minority Leader Mitch McConnell (R-KY) announced today their picks for the fiscal super committee created by the debt ceiling deal, naming Sens. Jon Kyl (AZ), Pat Toomey (PA), Rob Portman (OH), and Reps. Jeb Hensarling (TX), Dave Camp (MI), and Fred Upton (MI) to the body. The committee is tasked with finding $1.5 trillion in deficit reduction by November, and one of the key issues will be whether revenue increases are included. Basic economics and the American people call for increasing revenues, with a new CNN poll showing 63 percent of Americans want the committee to raise taxes on the wealthy, but several of the GOP picks are hard-right conservatives who likely oppose such a “balanced approach.” Other critical issue will be entitlement programs like Social Security and Medicare, and whether the committee makes cuts to military spending.

Here’s what you need to know about each of the GOP super committee members: Read more