Back when the “Gang of Six” was the fiscal flavor of the week and Sen. Tom Coburn (R-Okla.) was sparring with Grover Norquist over ethanol subsidies, I wrote that Norquist’s Taxpayer Protection Pledge is the height of fiscal irresponsibility. The pledge unconditionally rejects any net reduction in tax credits, deductions, or increase in rates unless matched dollar-for-dollar by some other tax reduction. (The pledge should have lost some of its gravitas when conservatives decided it didn’t apply to the payroll tax cut enacted last December.)
Since then, a rigid refusal to restore any revenues from levels diminished by current tax polices led Republican leadership to repeatedly walk out of debt ceiling negotiations, first with Vice President Biden and then again with President Obama. Instead of a grand bargain containing more desperately needed support for the faltering economy, our political system delivered an eleventh hour debt ceiling deal that prompted a credit rating downgrade from Standard & Poor’s, albeit on specious grounds (they made a $2 trillion baseline error but continued with the downgrade based strictly on political judgments). A stage of Republican presidential candidates unanimously declared that they would oppose a budget deal with 10 dollars in spending cuts for every dollar in new revenue.
Now, an impasse over revenue suggests that the super committee (tasked with negotiating the second phase of the debt ceiling deal) will go down in flames. This would trigger further discretionary spending cuts—the $111 billon cut slated for FY2013 would wallop GDP growth a year from now—and all but rule out more near-term fiscal support (due to limited borrowing headroom). The pledge is also hindering initiatives to put millions of Americans back to work; House Majority Leader Eric Cantor (R-Va.) recently proclaimed the American Jobs Act dead, having objected to its revenue offsets. Advantage Norquist?
Not so fast. Last Tuesday, Rep. Frank Wolf (R-Va.) excoriated Norqusit for guarding spending through the tax code, obstructing tax reform, and thwarting deficit reduction deals. “Have we really reached a point where one person’s demand for ideological purity is paralyzing Congress to the point that even a discussion of tax reform is viewed as breaking a no-tax pledge?” Wolf, who is one of only six House Republicans who have not signed Norquist’s pledge, came to Coburn’s defense a little too late, but this is nonetheless encouraging. Shortly thereafter, Taxpayer Protection Pledge signee Sen. John Thune (R-SD) said that Congress can’t be “bound by” pledges if it wants to enact comprehensive tax reform. Michael Gerson understands that pledge ideology rules out political agreement on long-term deficit reduction, and his attempt to fault the president’s emphasis on tax “fairness” as being equally unproductive is preposterous (he must have repressed all memories of the debt ceiling negotiations, and for good reason).
One by one, conservatives may be coming to the realization that the pledge is incompatible with fiscal responsibility of any form. Perhaps it helped that President Obama threatened to veto any budget deal that cuts Medicare without raising more revenue from upper-income households and businesses. Hopefully a critical mass of conservatives will stray from the herd of deficit peacocks and prioritize reducing the long-term budget deficit rather than blindly obsessing over the level of government spending.