Grover Norquist’s Last Laugh

When President Obama got Republicans to raise taxes on the top one percent of income earners as part of the January deal that ended the threat of the fiscal cliff, some Democrats gloated that Republicans had been made to go back on the famous Grover Norquist pledge never to raise taxes. It appeared that Obama, fresh from his November victory and taking advantage of Republicans’ divisions, had won big.

Well, think again.

If you compare the leverage that Obama had in that set of bargaining with the leverage he has now in the post-sequester budget negotiations, it is like night and day. Had Obama hung tough and demanded a lot more in the way of tax increases on the wealthy, Republicans were just stuck—because no action would have caused taxes to increase on everyone. Obama had begun the bargaining requesting a reversion to the pre-Bush tax levels on the top two percent, targeting revenue increases of at least $1.6 trillion over a decade. Instead, he settled for just $620 billion—meaning that another trillion has to be taken out of the spending side. Senate Majority Leader Harry Reid was holding out for the higher number, correctly calculating that Republicans would have to give ground, when Obama undercut Reid by shifting the leadership to Joe Biden with instructions to make more concessions, without even the courtesy of informing Reid. The White House also disastrously miscalculated that the threat of defense cuts in the sequester would bring Republicans back to the table on taxes. Oops. Republicans realize that Afghanistan is winding down, and what’s most interesting about the Paul Ryan budget is that its proposed defense spending over the next decade is scarcely different from the Democrats’ proposal.

I happened to be speaking at The Atlantic’s Economy Summit conference this week, where Norquist was also a speaker, and I had a chance to discuss the January and March budget negotiations with him afterward. According to Norquist, when House Republican negotiators were told that Obama would settle for as little as reverting to the pre-Bush tax rates only on the top one percent, they were astonished at their good fortune. Obama’s cave-in was almost too good to be true. As Norquist sees it, the White House was so fixated on the symbolism of getting Republicans to say “uncle” on some form of tax increases on the rich that Obama lost track of both the substance and the larger tactical situation. In late December, when the automatic tax increase of the fiscal cliff was the threat, Democrats held all the cards. Now, with the automatic spending cuts of the sequester in play, the Republicans hold the cards. Why, Norquist wondered, didn’t Obama hold out for only a one-year deal on tax cuts, so that the Democrats would have the leverage of automatic tax increases to hold over the Republicans in the sequester negotiations and next year?

Great idea! I’d never heard anyone propose that gambit. 

"Who came up with that?" I asked. "I did," said Norquist. He was worried that the Democrats would think of it. The White House should hire this man.

But what about Norquist’s famous pledge? Didn’t the New Year's deal on the fiscal cliff force Republicans to violate it? Not exactly. The New Year's vote was to allow taxes to stay at Bush levels for the bottom 99 percent and to revert to pre-Bush levels for the top one percent. Tactically, it allowed Republicans to say tax hikes were now off the table. As Chairman Mao might have said, one step backward, six steps forward. It’s the kind of pledge violation Norquist can take to the bank.

Norquist told me he was about to go on television to say what a great bargain it was, and prudently decided to keep his mouth shut until the deal was inked. Who is advising Obama on this stuff? Norquist kept asking me. Damned if I know.

A couple of months ago, Washington was filled with talk of Republican humiliation and division. Romney had cratered. House Speaker John Boehner and Majority Leader Eric Cantor were barely on speaking terms. Social issues were sorely dividing the Republican Party. The GOP’s spokesmen were either goofy or plumb ugly and mean, like the Kentucky Turtle who serves as their senate leader. Today, at least on the budget issues, Republicans are showing that if they hang tough on no-tax-increases, Obama will come to them. The latest talk is that Obama is persuading liberals like Nancy Pelosi to walk back her opposition to no disguised cuts in Social Security via a change on the cost-of-living formula. Democrats are evidently willing to discuss a ten-year budget deal that includes two or three dollars of spending cuts for every dollar of tax increase. Even Senator Patty Murray’s relatively liberal Senate budget is about a dollar in spending cuts per dollar of tax hikes. All signs point to a grand bargain in which Republicans, starting in the Senate, very reluctantly agree to close some loopholes, and Democrats throw Social Security and Medicare into the pot to get cuts that are “back-loaded” (bite more heavily in later years) so as not to depress the recovery. House Republicans then kick and scream—and take the deal. And once again, Norquist will decide that this deal did not really violate the sacred pledge.

Democrats, can’t you see how you are getting rolled? The only sensible budget on the table in Washington is the Back to Work Budget proposed by the Congressional Progressive Caucus, which includes more deficit spending and more public investment now, faster growth and job-creation, more progressive taxes on the rich, and eventual deficit reduction at a higher level of GDP. This is the only budget that is both smart economics, socially just, and good politics for Democrats. If Obama were the president we thought we were voting for, he’d be leading the charge for it. At least the eventual compromise would be far more progressive than what we’ll likely get.

Back in 2008, the word was that Obama was playing chess several moves ahead while everyone else was playing checkers. I prefer a poker metaphor. This is a president capable of folding a royal flush.

Comments

Somebody should sit on president Obama's head when he bargains with the Republicans. He's no good at it. So much for Jack Lew being a tough negotiator.

I certainly go along with your story, sad though it may be; but from the beginning Mr Obama has been too clever by half. He went out of his way to vote more than once against the things he was running on, e.g., the FISA bill, which told me he could not be trusted and that there would be no surprises if he were to be elected then work to enact the socially moderate but illiberal corporate desires of the DLC. (Tellingly, he insisted he was not a member like the Clintons.) Both he and Hillary are that part of the Democratic Party which deceitfully want what their corporate masters want, not what Democrats at large want. The writers that keep explaining how it is the darn Republicans who stop him from being a Democrat help keep up the facade. They're mostly liars for hire.*
Obama is extremely clever at getting what his backers want while shifting blame to the other side.
He is not as stupid as he acts. He just wants to get what he wants while getting his supporters to blame the other side. So far he has been a smashing success!

It's a masterful act. Yes, the Democrats are being rolled alright--but by their own president.

*I trust you're not one of these.

I absolutely agree with you. Obama has been saying since January 2009 that he wants to "reform" [cut] entitlements [benefits that we worked for, paid for, and deserve to receive]." The people getting rolled mostly are the Democratic base, and especially older voters, who think Obama is working to protect them, when in fact he's the one who put benefit cuts on the table, and keeps bringing them back to the table every time the Teatards save us from his plans. He's a total believer in Chicago School neoliberalism.

Of course this is what he would say. Saving face and all of that after having his pet project rejected after so many years. Just like a five year old, or any Cantservative, he can't recognize that Republicants actually lost and he lost his autocratic, senseless hold over them.

I think you give Norquist far too much credit- historically, he's always done this sort of pompous self-flattery. Obama is walking a thin line between short-term (the economy) and long-term (taxes and spending) issues; he can't adhere to liberal spending and taxation priorities at the expense of causing a double-dip recession (which would also be very bad for liberal spending and taxation priorities, if it costs the Dems politically). I don't know how you can write an entire column on the fiscal negotiations without even noting the economic situation in passing- checking liberal checkboxes is not the only priority here.
"If Obama were the president we thought we were voting for, he’d be leading the charge for it." After the 2008 election there was much whining that Obama was governing as a center-left democrat (which is what he ran as, IMO- if you listened to the specific policy proposals and didn't read one's own preferences into the grand rhetoric). But that at least made some sense in 2008, since we didn't know exactly what we were getting- in 2012, this is nonsense. Obama has been president for four years, and you are still claiming to not know who you were voting for?

If you do not understand Obama's strategy here, I shall spell it out for you: the GOP has put a lot of face on the line that they will hold fast on taxes. Due to Obama's clear and repeated desire to make a deal, the public is prepared to blame the GOP if no deal is made. Thus, the GOP is stuck between their base and the middle- they either strike a deal and enrage their base, or fall on their swords and have the majority of Americans blame them for intentionally tanking the economy.

"The only sensible budget on the table in Washington is the Back to Work Budget"
This can pass neither the Senate (under the new filibuster regime) or the House. What would be really great is if the White House sent me a pony- can we go back to talking about stuff that could actually happen now?

"I prefer a poker metaphor. This is a president capable of folding a royal flush."
Political neophytes often imagine that their policy preferences could bloodlessly be made law via some combination of steely resolve and straight talk. One rarely encounters this level of political naivete in actual columnists though. At least, outside of WorldNetDaily etc.

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