Ignore Grover (and Learn from Him)

Lessons in Avoiding the Fiscal Cliff

Here's the first lesson from the early skirmishing over ways to avoid the fiscal cliff: Democrats and liberals have to stop elevating Grover Norquist, the anti-government crusader who wields his no-tax pledge as a nuclear weapon, into the role of a political Superman.

Pretending that Norquist is more powerful than he is allows Republicans to win acclaim they haven't earned yet. Without making a single substantive concession, they get loads of praise just for saying they are willing to ignore those old pledges to Grover. You can give him props as a PR genius. Like Ke$ha or Beyonce, he is widely known here by only one name. But kudos for an openness to compromise should be reserved for Republicans who put forward concrete proposals to raise taxes.

The corollary is that progressives should be unafraid to draw their own red lines. If you doubt this is a good idea, just look at how effective Norquist has been. Outside pressure from both sides is essential for a balanced deal.

Start by insisting that Social Security and any increase in the retirement age be kept off the table. President Obama's bargaining hand will be strengthened further if he can tell Republicans that there just aren't Democratic votes for steep cuts in Medicaid and Medicare. The president's room for maneuver expands still more if liberals refuse to look at cuts in programs unless Republicans are prepared to raise tax rates on the wealthy.

Already, there are signs that Republicans realize how much leverage the president has. If Congress doesn't act, all the Bush tax cuts expire at the end of the year. At that point, the Senate's Democratic majority has the power to block (or Obama can veto) any restoration of the upper-end Bush tax rates.

One indication that Republicans are aware they're boxed in came from Rep. Tom Cole, R-Okla., one of his party's shrewdest political minds. He suggested Republicans should take up the president's invitation to extend the Bush tax cuts for the 98 percent of Americans who earn less than $250,000 a year. Yes, this would amount to throwing in the towel on those upper-bracket levies. But Cole knows that it won't help the Republican brand if voters come to see the GOP's one and only objective as protecting wealthier Americans from tax increases.

The next lesson is not about politics or PR. It's about substance, and this is where the Washington establishment has to get serious. The simple fact is that it's bunk to claim "tax reform" alone can produce the revenue we need.

One of the great disservices of the Bowles-Simpson commission was that it fed the impression that tax reform could generate so much cash that it would permit a cut in tax rates.

Grant Erskine Bowles and Alan Simpson credit for good intentions -- they were desperate to find a way to get Republicans on their commission to acknowledge the need for new revenues. Nonetheless, their effort was more a political deal than wise policy. They sent us down the wrong path.

The only way tax reform might raise enough money to prevent a rate increase, let alone create an opportunity for rate cuts, is to reduce popular deductions (like the one on mortgage interest) so deeply that middle-class Americans would get a tax increase, too. And eliminating or sharply undercutting the deduction for state and local taxes is a bad idea. This only penalizes higher-tax states that try to solve their own social problems -- for example, by providing health insurance to their low-income residents.

And all the schemes to eliminate tax expenditures to avoid rate increases have the effect of protecting just one group: the very wealthiest Americans, people earning $1 million, $10 million or more. That's how the math works.

The right thing is to bring back Bill Clinton's tax rates on the well-off and then have a broad tax reform discussion next year. A similar logic applies to health care programs, as Jonathan Cohn suggested in The New Republic. Before making big cuts in Medicaid and Medicare, we need to see if the reforms in the Affordable Care Act can contain medical inflation.

The fiscal cliff creates an enormous opportunity to end an era in which it was never, ever permissible to raise taxes. In the pre-Grover days, conservatives believed passionately in pay-as-you-go government. A tough stand by progressives will make it easier for conservatives to return to the path of fiscal responsibility. 

(c) 2012, Washington Post Writers Group

About the Author

E. J. Dionne Jr. is a syndicated columnist, professor of government at Georgetown University, and a senior fellow at the Brookings Institution. His most recent book is Our Divided Political Heart: The Battle for the American Idea in an Age of Discontent (Bloomsbury Press).



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You are right about the unelected  Grover dominating the cliff issues.

How about Obama announcing an earlier withdrawl from Afghanistan, saving billions in defence costs compared to the GOP nickles in de-funding PBS.  How about emphasizing that the 35% tax on the first 250K will give the 2%ers the biggest tax cut of anybody. Then raise capital gains and dividends to at least 17% and carried interest to 35% like all other compensation. I just named hundreds of billions and trillions in revenue and cuts over the years to stuff in the deficit hole.  

Professor Dionne's advice to the "progressive" negotiators is to (1) take any changes to Social Security and Medicare off the table, (2) insist on rate increases for all earnings above $250K and disregard any loophole closing, etc, and (3) no change in rates (i.e., keep the Bush tax cuts) for earnings below $250K, and then (4) "have a broad tax reform discussion next year." 

Would discussion of Medicare, other entitlments, and tax rates, be off limits in the "broad tax reform discussion" next year also? If so, why would anyone agree to a short-term fix to the fiscal cliff? If those issues are part of a "broad tax reform" then why not address them now?

Consider that if the Republicans do agree to extend the Bush cuts for only those earnings below $250K, then the President will have lost his most popular negotiating point. That is a risk the Republicans might just accept, as Dionne points out. 

This article points to a major problem: BOTH the President and many Republicans in the House and Senate can claim mandates to stick to their campaign positions. Very likely, no progress will be made until a completely new approach is taken, including the very "broad tax reform discussion" that Dionne would postpone till next year. For example, by removing ALL deuctions, credits, etc., from the personal income tax calculations (Pennsylvania's tax has been that way for decades), much lower tax rates could produce more revenue, in a more transparent, credible and fair tax system. 

Only when Democrats, Republicans, and their advisors put aside the tired politcal axioms and start looking at what has worked and what as not worked will we make any progress. Let's get started now, and stop putting off the hard work until "next year", which never seems to arrive.

The Senate just passed a bill today, 11-29 ,asking to  accelearate our withdrawl before 2014 from Afghanistan.. that's a half trillion yearly savings. Your move Grover..or  GOP

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