Fiscal Cliff

11.16.12

Grover Norquist Sees the Fiscal Cliff and Guns It

With the fiscal cliff in sight, Washington’s most visible anti-tax lobbyist sees no reason to compromise. He talks to Lloyd Grove.

The fiscal cliff is rushing headlong into view, and Grover Norquist is at the wheel of his convertible, flooring the gas and steering toward the abyss—Thelma, figuratively speaking, to Mitch McConnell’s Louise.

That, anyhow, is the nightmare scenario concerning Washington’s preeminent anti-tax lobbyist and the Senate’s diehard Republican minority leader, who, along with Speaker of the House John Boehner, seems determined to play chicken with the U.S. economy in order to thwart President Obama’s scheme to raise taxes on the top 2 percent.

Norquist—whose 27-year-old advocacy group, Americans for Tax Reform (ATR), famously pressures office holders to sign its pledge never ever to raise taxes for any reason whatsoever—is once again playing enforcer as the negotiations get underway. As usual, he’s publicly making his case in attention-getting, often-outrageous terms, and privately cautioning his signatories against doctrinal deviations, lest ATR run ads at election time pointing out their apostasy.

Norquist’s latest ploy, which he must know but won’t admit is a publicity stunt, is to demand that the negotiations be conducted on C-SPAN, the better to keep them honest. “No quiet rooms,” he says, a reference to a notorious Romney quote about where Washington controversies should be resolved. “They can be smoke-filled rooms, with Boehner smoking as much as he wants—and it has to be on C-SPAN so children can pick up bad habits.” Facetiously, Norquist adds, “That would raise revenue if we could get more of those 12-year-olds paying cigarette taxes.”

The defeated Republican presidential candidate, meanwhile, eagerly signed the ATR pledge, but Norquist—whose relationship with politicians seems entirely transactional—has little use for him now. “I don’t think we take political advice from a guy who kicked away the presidency,” he says in response to Romney’s recent musings that Obama owes his victory to the generous dispensing of “gifts” to various interest groups in the Democratic base.

As for flying off the fiscal cliff, Norquist sounds untroubled. “I would rather that the sequester take effect than it be delayed or eliminated,” he tells me, referring to the harsh 8 percent across-the-board reductions in the discretionary budget, including a 9 percent cut in defense spending, which by law are scheduled to occur Jan. 1 if Congress and the White House can’t agree on a fiscal plan.

“I’m for the spending cuts,” Norquist says. “Just let them take effect. My first preference, like most Republicans in the House, is the Ryan budget [the draconian handiwork of Romney’s running-mate, House Budget Committee Chairman Paul Ryan, which passed the Republican-led House in March and quickly died in the Democrat-led Senate] … It lowers the tax rate, saves the same amount of money, and doesn’t hit the defense budget as hard. The only thing worse than the sequester would be not reducing spending.”

Norquist dismisses as ‘bombast’ the president’s repeated vows to soak (or, rather, spritz) the rich.

In other words: if Obama insists on his obnoxious tax hikes (from the current 35 percent top marginal rate to the previous 39.6 percent for income over $250,000)—while postponing the grubby business of entitlement reform and spending restraint—it’s time to hold hands, push the pedal to the metal, and launch!

Along with next year’s automatic expiration of the decade-old Bush tax cuts for everybody, picking the pockets of the middle class, that outcome could result in another steep recession, a further downgrade of the government’s credit rating (which Standard & Poors dropped last year from Triple-A to double-A-plus, citing political dysfunction during the 2011 debt ceiling dispute), a plunge in the stock market, and worldwide economic turmoil.

Norquist, however, is betting that won’t happen.

“I don’t believe the president is so self-centered that he will run the country into a $500 billion tax increase next year because he misunderstands that when the American people reelected him and a Republican House, they did it by mistake—because he’s the king,” he says.

“I don’t believe the threat that Obama will do that much damage to the American economy,” Norquist continues, “because it will destroy his capacity to govern, given what it will do to the Democrats in the House and Senate in 2014. They’re going to have a very bad 2014 anyway, because there are too many Democrats running and the economy sucks and will continue to suck.”

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On a recent episode of The Number, global business editor Daniel Gross and the Wall Street Journal's Justin Lahart sort out the economic truth.

Norquist rejects the much-quoted exit poll results from the Nov. 6 election suggesting that 60 percent of the voters agree with the president that taxes must be raised on the rich. Instead, he argues that the more relevant statistic is the 63 percent who said taxes shouldn’t be increased to help reduce the deficit. “Am I concerned that the American people want their taxes raised?” he asks himself. “No, I’m not concerned about that.”

But why not take Obama’s suggestion to extend the tax cuts for the 98 percent ASAP and haggle over the remaining 2 percent afterward?

“Counteroffer: why don’t we extend them for everybody and then haggle over taking them away from the top 2 percent?” Norquist parries. If Republicans accepted Obama’s proposal, he adds, “the Democrats would stop the negotiations and leave it at that. I don’t trust them. But it’s not a question of me not trusting them. If you went to Boehner and McConnell, they’d laugh at the suggestion: ‘If you give me what I want, then later I’ll think about giving you want you want—OK?’ This is not their first rodeo.”

Norquist dismisses as “bombast” the president’s repeated vows to soak (or, rather, spritz) the rich.

“In 2011, he said the same thing over and over,” Norquist argues. “He said, ‘I’m not gonna continue the tax cuts.’ Except he did.”

This time, Norquist says, “the economy is so bad, the regulations that are coming are going to make the economy worse, Obamacare is going to make the economy worse [and impose a 4 percent surtax, he claims], and his guys are all running for office. In two years he is a lame-duck president. He hasn’t yet figured out how a lame-duck president watches his power drain away every day, never mind Benghazi and all that other stuff.”

So Norquist is predicting that having won a second term, President Obama will simply cave to the party he just beat like a drum?

“Not cave,” Norquist answers. “He’ll do the right thing.”

Speaking of watching power drain away, the conventional wisdom since the election is that Norquist himself is a diminished force, having lost pledge-signers to defeat in both the House and Senate. Indeed, with just 217 signatories in the House, he can’t even claim a majority, and his 39 signers in the Senate is an all-time low. A small but increasing number of Republican office holders appear emboldened to think of tax hikes as a necessary evil, and several GOP candidates resisted commiting themselves to the ATR orthodoxy.

Republican pundit William Kristol—a neoconservative who was Vice President Dan Quayle’s chief of staff in the first Bush White House—is among those who’ve argued that protecting tax breaks for the wealthy is not a hill worth dying on.

“Neoconservatives are people who can’t stand the Democratic Party but don’t understand economics,” Norquist sniffs. “I am sure he’s kind to his kids and pets. However, a strategic thinker he’s not.”

Still, a story this week in Salon was headlined: Is it game over for Grover Norquist?”

The subject of these obituaries scoffs: “All those articles were also written in 2011, right up until the point that the Obama White House agreed to $2.5 trillion in spending reductions rather than any tax increases … They alternate between ‘pledge is fading’ and ‘Grover Norquist runs the universe’ and then back again. Same old same old.”

Norquist adds: “The tax issue is as powerful as it has always been—the tax issue, not me. I’m a humble messenger.”

CLARIFICATION: When Grover Norquist used the term "poopy-head" on television in reference to Mitt Romney, he was not himself calling Romney "a poopy-head," but rather burlesquing the Obama campaign's personal attacks on the GOP presidential nominee, saying the president was in essence calling his opponent "a poopy-head." The original reference to the comment has been removed.