Market Collapse 2011: Grover Norquist Defends GOP Debt-Ceiling Politics

Grover Norquist helped keep GOP troops in line on the debt-ceiling vote. He talks to Lloyd Grove about why the meltdown isn’t his fault.

Andrew Harrer / Bloomberg via Getty Images

Here’s one possible narrative of how and why Monday’s Dow Jones industrial average went on a harrowing toboggan ride into a tree: The market was still freaked out over Friday’s S&P downgrade, which in turn was influenced by the refusal of congressional Republicans to consider even the teensiest of tax hikes in the debt-ceiling sweepstakes—which in turn was the absolute edict of a powerful yet unelected Washington operative who chirpily answers his cell phone: “Grover G. Norquist!”

Given the wallop-packing authority of the founder of Americans for Tax Reform (ATR)—after 26 years in existence, the country’s preeminent lobbying organization against tax increases of any kind—it’s probably fair to label the slide in the U.S. government’s credit rating the "Norquist downgrade.”

Isn’t it?

“No!” Norquist (the “G” is for Glenn) insisted over his cell phone the morning after Standard & Poor’s rendered its controversial verdict and lowered America’s triple-A rating to double-A-plus. “All of Obama’s problems are ones he created. And my role is to help fix it by forcing the focus on spending, and not allowing it to be distracted onto tax increases.”

In case anyone in Washington doubted his supremacy, the Aug. 2 passage of the debt-ceiling extension, without a dime of new taxes for corporations or the wealthy (never mind the blustery demands of the Obama White House and Treasury Secretary Tim Geithner) certified Norquist’s oracular status, especially among Republican officeholders. This, after a season in policymaking purgatory during which President Obama and the stimulus-packaging Democratic Congress briefly shoved Norquist off the power grid.

In recent weeks, the 54-year-old suburban Boston native and Harvard grad, the son of a Polaroid executive, has reestablished himself as judge, jury, and executioner of all efforts to raise revenue in the service of fiscal discipline.

“He is the arbiter of what is and what is not a tax increase,” said four-term North Carolina Republican congressman Patrick McHenry, minutes after voting for the Budget Control Act of 2011, which raises the federal government’s ability to borrow by $2.4 trillion but mandates an equal amount in spending cuts over the next decade. “His presence was strongly felt in this deal.”

Like 235 other House Republicans and 41 Senate Republicans—as well as two House Democrats, 13 governors and 1,263 state legislators—McHenry is a signatory to Norquist’s inviolable Taxpayer Protection Pledge, which must be co-signed by two witnesses and is kept, along with the other signed pledges, locked in a safe in an undisclosed location somewhere in the nation’s capital.

The ATR pledge allows zero wiggle room. It commits members of the House and Senate to “ONE, oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses; and TWO, oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.” State legislators promise to “oppose and vote against any and all efforts to increase taxes.” Governors, meanwhile, pledge to “oppose and veto any and all efforts to increase taxes.”

Pennsylvania Sen. Pat Toomey, who last year left his perch as president of the conservative Club for Growth to defeat five-term incumbent Arlen Specter, is a believer. “Grover has played a very constructive role in helping the Republican Party establish its brand—especially the part that opposes higher taxes,” he says.

Molding the GOP’s message has been central to Norquist’s strategy. “We have branded the modern Republican Party as the party that will not raise your taxes, and just like Coca-Cola, it has a brand, a trademark, and quality control,” Norquist told a group of conservative activists in Arlington, Va., the day after the president grudgingly signed the debt-ceiling deal into law. “But if you get home and two thirds of the way through your bottle of Coke you look down at what’s left and there’s a rat head, you do not say to yourself, ‘I’m thinking I may not finish this particular bottle of Coke tonight.’ You in fact wonder if you will ever buy Coke in the future. You call your friends and tell them about it, you go on local TV and show them the cool rat head. And Coke has a big problem because it damages the brand for everyone else.”

Norquist hammered home his message: “Republican elected officials who vote for a tax increase are rat heads in a Coke bottle!” (Rats enjoy a special place in Norquist’s ideological imagery: Back during Bill Clinton’s presidency in the mid-1990s, ATR’s office mascot was a pet boa constrictor named Lysander Spooner, after a 19th-century tax-hating anarchist. Every week Norquist and his employees conducted a ritual sacrifice of a live jumbo white rat; just before dropping the piteous creature into the ravenous snake’s cage, they’d name it for a prominent Democrat.)

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Not surprisingly, Norquist has enemies—not only among members of Barack Obama’s party but also among members of the Republican establishment who resent (and fear) his iron-fisted inflexibility on matters of antitax doctrine and his readiness to punish heretics, sometimes by running ads against them in Republican primaries. Oklahoma Republican Sen. Tom Coburn, a member of the bipartisan “Gang of Six” that was considering revenue increases along with entitlement reform in trying to cobble together a deficit-reduction deal, was widely praised for his “courage” in the past few months when he defied Norquist’s orthodoxy and tried to eliminate a $6 billion tax break for the ethanol industry. Coburn’s crusade won 34 of 47 Senate Republican votes, but faltered in the end after an intense ATR lobbying campaign. “We cannot allow one individual to have that kind of power over a vote that can help fix the country,” Coburn told The Washington Post last month—never mind that he, too, is a signatory to the pledge.

Ronald Reagan’s former budget director David Stockman, a proponent of tax increases who has known Norquist since he was “a bright young conservative libertarian type” in the orbit of the Reagan White House, today calls him a “fiscal-policy terrorist” and the “Taliban of Taxation.”

“Everything,” Stockman says, “is black and white with him: “ ‘If you don’t see it my way, then off with your head.’ ”

Indeed, Norquist owes much of his success to the savage simplicity of his message to officeholders: Vote to increase income taxes, or taxes of any kind, and you’re toast. Vote to eliminate a deduction or a credit, and you’re toast. Vote to close a loophole—“unless matched dollar for dollar by further reducing tax rates,” according to the ATR’s sacred text—and you’re toast.

Norquist’s most vociferous Republican detractor is former Wyoming senator Alan Simpson, the cochairman of the president’s bipartisan deficit-reduction commission that proposed tax hikes and the elimination of certain deductions as part of a plan for long-term fiscal health. The 79-year-old Simpson, who once left a rambling rant on ATR’s message machine—which Norquist gleefully released to the media—regularly appears on cable television to enumerate the evils of his exertions.

“The only thing that Grover can do to you—he can’t kill you, he can’t burn your house—the only thing he can do to you is defeat you for reelection,” Simpson said last week on Lawrence O’Donnell’s MSNBC show, The Last Word. “And if that means more to you than helping your country out of a terrible situation, you oughtn’t to be there.”

Simpson has been tangling with Norquist since 1986, when the latter opposed Simpson's immigration-reform bill because it required workers to carry a “national identity” card. He knows his enemy: “It’s time to now peel all the layers of the onion off of Grover Norquist … When a guy is this powerful, you want to dig deep in the root—and I’m not talking about salacious stuff and his personal life, I’m talking about where did he get his scratch and how does he terrify people? 'Cause he walked up to a guy and said, ‘I’m gonna defeat you’? … You must be a chicken if you fall for that crap.” (Norquist’s “salacious” personal life: he’s the doting father of two young girls.)

In the 2010 election cycle, ATR—which doesn’t disclose its donors and, thanks to the Supreme Court’s 2010 Citizens United ruling, won’t have to any time soon—spent $7.5 million. For 2012, Norquist says he hopes to raise and spend $15 million, in coordination with an additional $10 million from a super-rich donor he refuses to identify (except to say that it’s not one of the Koch brothers). Beyond the expensive electioneering, during which ATR doesn’t explicitly endorse candidates but simply makes invidious comparisons, Norquist presides over a $6 million annual budget and 30 Washington-based employees of his group’s lobbying-political arm and its nonprofit educational foundation. More than a dozen additional ATR operatives organize antitax efforts out in the states.

Every Wednesday morning, over bagels and coffee in the spacious conference room of ATR’s downtown Washington headquarters (in a vintage building that the group is hoping to buy), Norquist hosts a meeting of more than 150 organizations that Hillary Clinton might call “the vast right-wing conspiracy.” It’s an information-sharing clearinghouse for social and economic conservatives—and a required pit stop for Republican officeholders and presidential candidates (and even Al Gore, who came as an invited guest a few years ago to sell the conservative coalition on the urgency of climate change). Norquist has also launched weekly “center-right meetings” in 46 states, with more to come, and boasts affiliated groups holding weekly meetings in seven Western European countries as well as Japan and Kyrgyzstan.

A longtime friend and fellow traveler of convicted lobbyist “Casino Jack” Abramoff, Norquist played a bit part in the 2005 scandal, but managed to avoid legal consequences when it was revealed that ATR had received financial support from Abramoff’s client, the Choctaw Indian tribe, and funneled $300,000 of Choctaw money in 1999 to block gambling competition in Alabama. Norquist, a Methodist who is married to a Kuwaiti-born Muslim, Samah Alrayyes, a former official at USAID and a director of the Islamic Free Market Institute, has also come under fire from some right-wing quarters for his efforts to recruit American Muslims to the conservative cause. Norquist dismisses his adversaries—who include syndicated columnist Michelle Malkin and former Reagan national-security official Frank Gaffney—as “bigots” and “explicitly racist.”

Last year he was an outspoken critic of prominent Republicans who turned the so-called Ground Zero mosque into a political issue in the weeks leading up to the 2010 midterms. “I was making two points,” Norquist says. “One: We’re the party of religious liberty. And two: We were about to win a skull-crushing election against big government, and you want to bring this shiny thing into it? What are you doing, you stupid idiots! If you believe this is an important issue, wait till after the election. Nobody’s building a skyscraper between now and November.”

Democrats, for their part, have invested Norquist with sinister dark powers of obstructionism. He does have a lot of clout,” says New York Sen. Chuck Schumer. “There are always ideologues and purists. The problem is when too many people listen to them, because our job is to balance interests, not just listen to one voice.”

Senate Budget Committee Chairman Kent Conrad, a Gang of Six member whom Norquist has worked to thwart both in Washington and in his home state of North Dakota, echoes Simpson’s call to “peel the onion” off Norquist.

“I’d like to know who supports him financially and what are their interests,” Conrad says. “I think he owes that to the American people. What interests is he protecting? Is he protecting the people that use these offshore tax havens to avoid and evade taxes that they legitimately owe to this country, or the people who benefit by abusive tax shelters that they use to evade and avoid what they legitimately owe to shove the cost on all the rest of us? I think those are questions that Grover Norquist should have to answer publicly.”

Norquist calls Conrad’s broadside “about as silly and dishonest an assertion as you can get.” He points out that ATR doesn’t defend specific tax breaks; it simply requires that if a tax break is stricken, the elimination must be revenue-neutral and matched by a decrease in the overall rate. “Kent Conrad knows that full well,” he says.

Norquist “has had a profound impact,” says Democratic Rep. Ed Markey of Massachusetts, noting that the pledge hardened the Republican negotiating position to the point where compromise was impossible. As for what makes Norquist so effective, Markey says with a shrug, “You’d have to get inside the internal workings of the cerebral mechanisms of Republicans to understand that.”