Democrats are unanimous in charging that the debt-reduction supercommittee collapsed because Republicans refused to raise taxes. Apparently, Republicans are in the thrall of one Grover Norquist, the anti-tax campaigner, whom Sen. John Kerry called “the 13th member of this committee without being there.” Senate Majority Leader Harry Reid helpfully suggested “maybe they should impeach Grover Norquist.”
With that, Norquist officially replaces the Koch brothers as the great malevolent manipulator that controls the republic by pulling unseen strings on behalf of the plutocracy.
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Nice theory. Except for the following facts:
Sen. Tom Coburn last year signed on to the Simpson-Bowles tax reform that would have increased tax revenues by $1 trillion over a decade.
During the debt-ceiling talks, Speaker John Boehner agreed to an $800 billion revenue increase as part of a Grand Bargain.
Supercommittee member Pat Toomey, a Club for Growth Republican, proposed increasing tax revenues by $300 billion as part of $1.2 trillion in debt reduction.
Leading, very conservative Republicans proposing tax increases. So why does the myth of the Norquist-controlled anti-tax monolith persist? You might suggest cynicism and perversity. Let me offer a more benign explanation: thickheadedness. Democrats simply can’t tell the difference between tax revenues and tax rates.
In deficit reduction, all that matters is tax revenues. The holders of our national debt care not a whit what tax rates yield the money to pay them back. They care about the sum.
The Republican proposals raise revenues, despite lowering rates, by opening a gusher of new income for the Treasury in the form of loophole elimination. For example, the Toomey plan eliminates deductions by $300 billion more than the reduction in tax rates “cost.” Result: $300 billion in new revenues.
The Simpson-Bowles commission — appointed by President Obama and endorsed by Coburn — used the same formula. Its tax reform would lower tax rates at a “cost” of $1 trillion a year while eliminating loopholes that deprive the Treasury of $1.1 trillion a year. This would leave the Treasury with an excess — i.e., new tax revenues — of $100 billion a year, or $1 trillion over a decade.
Raising revenues through tax reform is better than simply raising rates, which Democrats insist upon with near religious fervor. It is more economically efficient because it eliminates credits, carve-outs, and deductions that grossly misallocate capital. And it is more fair because it is the rich who can afford not only the sharp lawyers and accountants who exploit loopholes but the lobbyists who create them in the first place.
Yet the Democrats, who flatter themselves as the party of fairness, are instead obsessed with raising tax rates on the rich as a sign of civic virtue. This is perverse in three ways:
(1) Raising rates gratuitously slows economic growth, i.e., expansion of the economic pie for everyone, by penalizing work and by retaining inefficiency-inducing loopholes.
(2) We’re talking pennies on the dollar. Obama’s coveted Bush-tax-cut repeal would yield the Treasury, at the very most, $80 billion a year — offsetting 2 cents on the dollar of government spending ($3.6 trillion).
(3) Hiking tax rates ignores the real drivers of debt, which, as Obama himself has acknowledged, are entitlements.
The fiasco also known as the super committee (a committee which had no chance of success), was created due to Obama walking away from the Simpson-Bowles plan (a bipartisan solution to the debt crisis).
Bowles was appointed in 2010 to co-chair Obama's National Commission on Fiscal Responsibility and Reform with Alan Simpson.
The talking point now is that Simpson-Bowles is nearly identical to the super committee Democratic plan.
If that is the case, then why did Obama walk away from Simpson-Bowles?
It appears that there is someting in Simpson-Bowles that isn't politically advantageous to Obama, and 2012 is right around the corner...
This was a good column by the K-man, but he forgot to mentiont that a lot of Republican poli sci pundits seem to hate Grover Norquist more than Obama and Democrats.
Norquist doesn't force these Republican to sign his pledge, and Norquist and others are right that we are not undertaxed. I find it curious that so many Republican pundits are happy to demonize Norquist for simply calling out the politicians who violate the pledge they chose to sign on to when they wanted to get elected.
Dr. K does a good job of exposing the Admin's failures, but not of the Gop's in regard of Norquist. The latter man has way too much influence on the right. It is time for elected representives and candidates to stop signing stupid, shackling pledges to inside the beltway lobbyists and fufill their oaths to the people they represent. This is the same G.H.W.B, "read my lips" bravado that has cost on the right for a generation. Please just stop.
These are all very good points, Mr. Krauthammer, but the real problem is that however AWOL Obama was in budgeting policy, Republicans were just as AWOL in budgeting messaging. They should have their own talking points ready to reel off every time they are interviewed, every time a camera is fixed on them, to make the points you make here. They need to make these points in speeches and ads. Political success is about perception, and Republicans are unforgivably timid and unwilling when it comes to doing what it takes to be Democrat and media mythbusters. Actions are not enough, because they will not simply speak for themselves; they need to be backed up by lots and lots of words.
You are right about the Republicans lack of follow-through and messaging. Sadly the American electorate need to be led with pictures and simple language, repeatedly.
If they can't find the words, let them quote Charles verbatim.
Everybody else is fighting to take my money. I love the one guy who's actually trying to give me some back under the (widely ridiculed) belief that I might actually spend it better than a Washington fat cat would!
Republicans had two opportunities to stop the spending. But they were too scared of even a short-term partial government shut-down. So, instead, they voted for these phony deals that maintain or even increase Obama-level spending. The Ryan plan, and cut, cap & balance were both pretty good plans, but the Republicans not only were unwilling the fight for them, but they signalled their weakness from the very beginning. One thing is clear, Congress will not lead on this issue. Gingrich led on similar issues in 1995-1996, yielding balanced budgets and badly-needed welfare reform, but the only thing the weasel political class remember from those years is that the Republicans lost a handful of seats as the price of progress (as if nominating Dole and pursuing impeachment had nothing to do with Republican losses in that timeframe). Perhaps a President Gingrich would lead, but the smart money is on hoarding canned food before the bus predictably goes over the cliff.
Surely the point is that the Democrats want real tax increases now in return for "reductions in the rate of spending increases" that will never take place.
There is nothing to compromise here only capitulation. The cycle of taxing and spending only goes one way and that is up.
Grover Norquist - the left's latest bogeyman. They may already be looking past him to focus on a certain prominent athlete who - as of late - has been getting the Palin treatment ... External Link
It's not just that Democrats are fixated on raising tax rates. They are positively opposed to eliminating deductions (loopholes), although they'll never admit it. Deductions, exemptions and other gimmicks represent power. They are the manifestations of Congress' power to grant favors to select constituencies. With Congress swearing off earmarks (at least publicly and at least for now) tax loopholes are one of the few means left to court donors and interest groups.
Dr. K misunderstands the Democrats rhetoric. They are calling the GOP do-nothings because they have nothing else and are hoping for a replay of 1948. I encourage the GOP to allow the Dems to continue on this road because it leads to ruin for the Dems. The economy is as bad as it has ever been since 1941, the electorate is blaming Obama and the Dems, and the GOP does not need to be tied down with specifics in order to win a landslide election in 2012.
The Democrats would love nothing more than the GOP collectively voting for the most radical of the three Simpson-Bowles alternatives. They would immediately describe the GOP as heartless and reckless with the federal government. There would be no vote in the Senate anyway.
Mr. Scott, I wish you were right, but I'm not so confident of a landslide (for either party) in 2012.
The Democrats (and their media supporters) already
"describe the GOP as heartless and reckless with the federal government." Republicans need to state solid conservative principles, over and over. Only about a tenth of what we say gets reported in the Democrat media, so we need to increase the volume and restatement of our message tenfold.
I'll go with Mr. Cor's prescription here.
Problem remains spending, spending and spending. Talking about tax reform, tax cuts, flat taxes or tax rates is a glorious academic waste of time unless and until we address spending. Departments and programs have to be cut, curtailed and eliminated. The unfunded entitlements have to be dealt with. And it becomes more infuriating to see this kind of idocy about taxes as the deficit grows for $15 to 18 trillion between now and 1/1/2012.
Further Norquist has embraces some rather , interesting...Islamic people.
And why WON'T Boehner and the House Republicans pass the Simpson Bowles framework? Because it makes way too much political sense and they very foolishly think the Senate might actually act on it.
Mr. Krauthammer is right, of course. I saw that human toothache SJ Lee on TV Wednesday; when her time was running out, she made sure shoehorn in the "Grover Norquist" point in her last three seconds. Ugh.
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Sen. Tom Coburn last year signed on to the Simpson-Bowles tax reform that would have increased tax revenues by $1 trillion over a decade.
