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Debt ceiling fight: Is it Norquist's fault?

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WASHINGTON (AP) - Without a bipartisan agreement this summer to reduce the federal deficit and raise the debt limit, the economy could suffer a horrendous blow, leaders of both parties say. If that happens, some will point fingers at a bearded, slightly disheveled man who's barely known outside political circles in Washington.

(Photo: Associated Press)

For two decades, Grover Norquist has been the driving force in pushing the Republican Party toward an ever-more rigid position of opposing any tax increase, of any kind, at any time. He has been so successful that some GOP officials fear they've let Norquist squeeze them into a corner where they'll be unable to declare victory even if they win the great majority of their budget demands in negotiations with congressional Democrats and President Barack Obama.

Democrats, meanwhile, use Norquist to paint the GOP as an unreasonable party that kowtows to billionaires at the expense of middle-class Americans.

Obama is insisting that even if a deficit-reduction accord relies overwhelmingly on spending cuts, it also must have some revenue increases. Democrats say they should start with eliminating some not-so-popular tax breaks that Norquist and his allies stoutly defend.

Senate Republican leader Mitch McConnell "has decided to walk out on the same limb as Grover Norquist," Sen. Chuck Schumer, D-N.Y., told reporters last week. "It seems leader McConnell is willing to tank the economy for the sake of protecting tax breaks for oil companies and corporate jets."

Republicans’ no-tax-cuts stance extends to breaks for corporate jets

Obama didn't name Norquist in his feisty news conference Wednesday, but he cited the same tax breaks.

"I've said to some of the Republican leaders: You go talk to your constituents, the Republican constituents, and ask them, are they willing to compromise their kids' safety so that some corporate-jet owner continues to get a tax break?" Obama said.

Republican lawmakers scoff at the notion that killing a $3 billion tax break for small jets would make a dent in the $14 trillion debt. But they have complicated their ability to parry the Democrats on such matters by signing the famous anti-tax "pledge" of Americans for Tax Reform, which Norquist heads.

All but a handful of House and Senate Republicans have signed it. By doing so, they vow to oppose any effort to increase marginal income tax rates and "any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates."

In other words, even a "temporary" tax cut cannot be undone. Even a tax break that seems to have lost its purpose, when economic conditions change, cannot be touched unless it is offset elsewhere.

Some Senate Republicans have grown weary of Norquist's strict interpretation of the pledge, and a mini-revolt occurred in mid-June.

Thirty-four of the Senate's 47 Republicans voted to end a tax break for ethanol production, which has come under political fire in recent years. Norquist strongly opposed the move, and denounced its leader, conservative Sen. Tom Coburn, R-Okla. Coburn, who says some revenue increases must join deep spending cuts to reduce the deficit, claimed a turning point.

"You've got 34 Republicans that say they're willing to end this, regardless of what Grover says," he told reporters. "That's 34 Republicans that say this is more important than a signed pledge" to Norquist's group.

Norquist denies suffering a setback. He said the GOP senators willing to end the ethanol subsidy have also backed a proposed end to the estate tax, a favorite Republican target. The two tax moves, if enacted, would offset each other, Norquist said, fulfilling the pledge's demand to avoid "any net reduction" of tax breaks.

Norquist: Pledge plays bigger role now

"We are pleased as punch. The pledge is defended," he said in an interview. With the 2012 presidential race gearing up, and Congress facing high-stakes decisions on spending and deficits, the anti-tax pledge "has never been more important, and it has never played a bigger role," he said.

Few elected Republicans will openly feud with Norquist. His power derives from his relentless pressure on state and federal officials to sign his pledge, and his thinly veiled threats to support primary opponents against them if they break it. His website names 41 senators, 236 House members and 1,263 state legislators who have signed the pledge.

"We list who has taken the pledge, and who has not," said Norquist.

Most Republican lawmakers, and many Democrats, innately oppose tax hikes, so Norquist's achievements are unremarkable in some respects. But the pledge's rigidity tends to squelch even modest flexibility. Die-hard conservatives such as tea party activists see that as an asset. Others, however, say the inflexibility hampers

GOP efforts to negotiate tough agreements with Democrats. "It's a disservice to our nation for someone to be allowed to set a standard which really could threaten our economy," said Democratic Sen. Dick Durbin of Illinois. "I've grown up in life with bullies, and there's a point that you just have to say, `I'm not going to be frightened by them anymore."'

Norquist focuses less on the deficit than on his relentless campaign against federal spending, which is fed by taxes. This troubles some lawmakers, who note that both parties historically have been willing to cut taxes while doing little or nothing to reduce spending, causing the deficit to soar.

Federal tax collections at lowest level since 1950s

Partly because of this, federal tax collections, as a proportion of the overall economy, are the lowest since 1950, at 14.9 percent. Yet Congress's Republican leaders say tax increases of any type cannot be part of a deal to resolve the debt-ceiling showdown this summer.

It's the type of scenario the Harvard-educated Norquist had in mind when he founded Americans for Tax Reform in 1985. He says the pledge helps "brand" Republicans as the anti-tax party, clarifying voters' choices.

The image ignores the fact that Republican presidents including Richard Nixon, Ronald Reagan and George H.W. Bush raised taxes at times as economic conditions changed. It was Bush's 1990 reversal of his "read my lips" vow not to raise taxes that outraged many conservatives.

Several factors contributed to Bush's 1992 loss to Bill Clinton, but Norquist pins it almost entirely on the tax decision. Since then, he said, the anti-tax pledge "has become a powerful tool for any candidate."

Norquist is delighted that the pledge is making it harder for Republicans and Democrats to reach a spending accord that might include small tax hikes along with larger spending cuts. "The Democrats have run into a brick wall," he said, "and the pledge is there."

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