WASHINGTON -- The outcome of the Council of Nicaea in 325 AD hung on the matter of a diphthong. The orthodox camp defended the doctrine of homoousios; Arians preferred homoiousios. Setting aside the complexities of Trinitarian theology, it is enough to say that an iota's difference sundered Christendom. "Everywhere," St. Gregory of Nyssa later recounted, "in the public squares, at crossroads, on the streets and lanes, people would stop you and discourse at random about the Trinity. If you asked something of a moneychanger, he would begin discussing the question of the Begotten and the Unbegotten. If you questioned a baker about the price of bread, he would answer that the Father is greater and the Son is subordinate to Him."
Republicans in Congress are now engaged in a theological debate of similar intensity on the nature and substance of the Taxpayer Protection Pledge. Forty-one Republican members of the Senate have signed a promise to oppose "any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates." Some now hope to amend that pledge by a consequential iota.
The current budget impasse in Washington is easier to summarize than resolve. A necessary increase in the debt ceiling will require a budget agreement. Any deal will consist mainly of spending reductions. "But if we are talking about trillions," says Donald Marron, director of the Tax Policy Center, "that is an awful lot of money to move without concessions." Democrats will insist on some revenue increases. Republicans won't accept tax increases. Yet stalemate involves unacceptable economic risk.
To resolve this conundrum, it is necessary to identify a category of government revenue increases that aren't considered tax increases. Economists call these "tax expenditures" -- credits and deductions that are actually a form of hidden government spending. Consider the example of the mortgage interest deduction for second homes. "This is a kind of upper-middle-class entitlement program run through the tax code," says Marron. The same policy goal could be accomplished by simply sending checks to qualifying taxpayers. Many conservative economists would regard the end of this deduction as a limit on government activism, even though it would make official revenues larger. But the author of the Taxpayer Protection Pledge -- Grover Norquist of Americans for Tax Reform -- does not agree.