Norquist: Obama will 'deliberately drive us over' cliff
Sixteen Trillion Dollars. This is the number at the heart of so much fighting in our nation's capital. It is the amount of debt this country owes and the reason the so-called fiscal cliff has dominated conversations from Washington to Wall Street to Main Street. The fiscal cliff refers to what could happen automatically at year's end, when tax rates could go up on virtually all income levels coupled with hundreds of billions of dollars in spending cuts, which could immediately trigger layoffs and, some say, push our economy back into recession.
Lawmakers have until Dec. 31 to change the law so these automatic cuts and tax increases don't take effect. The problem is some lawmakers are holding onto so- called sacred cows — things they won't give up — such as cuts to Medicare, because it is one of our primary drivers of the debt, or tax increases because some Republican lawmakers have taken a pledge never to raise taxes. That pledge was instituted by Grover Norquist of Americans for Tax Reform. I caught up with Norquist to find out why he won't budge on taxes and to see if avoiding the fiscal cliff is possible. Our interview follows, edited for clarity and length.
Q: Do you expect we will get a compromise by year's end?
A: It could go either way. Right now I think the president may deliberately drive us over the fiscal cliff because on Jan. 1, there are five major tax increases for Obamacare, and the whole discussion of the fiscal cliff has been about the Bush tax cuts and sequestration, but a third piece of it is the trillion dollars in tax increases over the next decade to pay for Obamacare. Ninety percent of the tax increases passed for Obamacare will show up after January, so the next two and four years have a series of tax increases, independent of this fiscal cliff thing coming, that will be very damaging to the economy, especially since the president refuses to stop spending so much money, which has accounted for this debt.
Q: The president said he has laid out $600 billion in spending cuts.
A: We haven't seen what he's talking about in terms of the spending cuts. He's taken the tax increase he had been talking about during the campaign, letting the top two rates increase, that's $400 billion. He wants $1.6 trillion, four times that, in the new budget deal.
Q: You put together this pledge for Republicans to never raise taxes. How could you say taxes can never go up?
A: The federal government has been taking about 18% of GDP in taxes for the last 20, 30 years. That is more than sufficient to run a reasonably sized government. Tax increases slow economic growth. Why would you raise taxes? We need to reform spending, the tens of trillions of unfunded liabilities can never be funded by tax increases, that can only be fixed by reducing spending.
Q: Where specifically should the cuts come from?
A: The Republican House of Representatives has passed the Ryan budget. It saves $6 trillion over the next decade. It reforms Medicare. In a bill that was bipartisanly written. It takes spending down to 16% of GDP by 2040 and it reforms taxes.
Q: But you're losing support. You're seeing a number of senators walk away from this pledge. Sen. Bob Corker, R-Tenn., and others are saying, "I'm not going to be beholden to any third party."
A: No Republican has actually voted for a tax increase. And Corker's commitment is not to me. That pledge is to the people of Tennessee. If he wants to have a conversation with the people of Tennessee about raising taxes, he should probably have done so prior to the last two elections. In fact, the conversation he had with them was a commitment in writing not to raise taxes.
Q: You advocate a broadening of the tax base and changes to loopholes to raise more revenue but not touching tax rates. But can you really derive the same amount of revenue by not raising rates?
A: Sure. Because it's the spending that is the problem. The good news is that we haven't had a Republican vote for an income tax increase in 22 years, not since 1990.
That is why the Republicans have been able to win control of the House and the Senate in the past They're not going to throw away that sound policy and the sound political upper ground that they have ...
Q: What if the people vote them out because of the impact of going over the fiscal cliff?
A: The Democrats have the Senate because they didn't have votes on budgets and taxes and things like that. The Republicans have the House because they did have those things and they voted against tax increases. So if Obama wants to go into 2014, 2016 saying, "I'm the candidate of higher taxes in order to give you bigger government," ... he can do so. But one thing to keep in mind: If the president got the tax increases he said he wanted in his budget, you still have an $8 trillion debt over the next 10 years. Which means he has to come to the middle class with an energy tax. So when that happens, I think the Democrats will have a hard time explaining themselves in 2014 and '16 ... since this little tax increase — on high-income people and small businesses doesn't solve Obama's problem. He has to get the carbon tax, which is thousands of dollars per family.