“Politics is the art of the possible.” The quote is attributed to Otto von Bismarck, a man not known for warm and fuzzy relations with political opponents. First as a Prussian general and later as Germany’s first Chancellor, he dominated European affairs for much of the second half of the 19th Century. He provoked wars that made Prussia dominant over France and Austria, and lined up smaller German states to unify the German Empire in 1871. Bismarck was a formidable figure who understood the necessity of interpersonal relations, even with those with whom he disagreed. Like Presidents Lincoln, Roosevelt, Johnson and Reagan, he learned to accomplish his agenda without abandoning his principles.
Washington today is awash with leaders with principles, but who are unable to negotiate in a bipartisan manner. The President negotiates by giving telepromptered speeches to friendly audiences, knowing they will be shown by mainstream TV stations at prime time. He then relies on Tweets and e-mails to get his message back to recalcitrant Congressional Republicans. Grover Norquist has become an expert at persuading individual Congressmen and women behind closed doors of the imperativeness of not raising taxes. Mr. Obama should borrow some of Grover’s methods – negotiate in private – while Grover should learn from the President how to better ingratiate himself with the press.
But who is this Peck’s bad boy that everyone knows by his first name? He was born in 1956 and grew up in Weston, MA. He graduated from his local high school and then received his BA and MBA at Harvard. In contrast to the standard caricature of conservative Republicans, Grover married Samah Alrayyes, a Palestinian Muslim who grew up in Kuwait and who now has her own consulting firm. They have two small daughters. Following graduate school, he moved to Washington and in 1985 President Reagan asked him to form the Americans for Tax Reform. The mission of the firm is to oppose tax increases as a matter of principal. He has been unusually successful. Even after the recent election, 218 House Republicans have signed the “Pledge,” as have 39 Senators.
Grover is almost always described as a gregarious optimist, one who views the glass as half full. He is seen as intelligent, commonsensical and persuasive. And, he is adamantly opposed to higher taxes; he authored the infamous no-new-taxes pledge twenty-seven years ago that most Republicans have since signed, along with three Democrats.
Mainstream media and the Democratic Party despise Grover Norquist. He has made a career of illuminating the wastrel ways of government and his pledges threaten the lifestyle of those we send to Washington. He is portrayed as a Rasputin hypnotizing dupable Republicans. The great irony is that he has the voice of reason on his side – that it is spending which is the principal culprit that has the country in trouble, not tax rates that are too low.
Spending, as a percent of GDP, has soared from 20%, where it had been for the past four decades, to 25% under Mr. Obama. Is it sustainable? Only if we are willing to pay for it. And who knows what the economic costs will be? Certainly the U.S. will lose some of its dynamism, and it seems probable that longer term growth will come to resemble Europe.
Since the dollar acts as the world’s reserve currency, no one knows how long the game can be played. Washington has operated for four years with trillion dollar-plus deficits, yet the trains are running, stores are still open, Thanksgiving came and went and my television and i-Phone still work. Our debt and deficit positions are worse than much of Mediterranean Europe and, while unemployment and under employment are far too high, schools and towns continue to function. Nevertheless, this will end, and probably not nicely. The Federal Reserve has been complicit in keeping the price of debt at extraordinarily low levels for four years. This ostrich approach to a pending financial Tsunami has worked for two decades. Might it last two more? Who’s to say? But for anyone who believes that there will be no day of reckoning is, as R. Emmett Tyrrell so diplomatically put it, an ignoramus.
It is true that revenues over the past four years have been low (16% in 2011), as measured as a percent of GDP. That can be attributed to abnormally low economic growth, but it may also be a function of an increasingly complex tax code filled with credits, deductions and exemptions that is a boon to lawyers, accountants and their wealthy individual and corporate clients; but the code is a bane to the rest of us. To get revenues to match current government spending would require an annual increase in taxes of $1 trillion, which would surely send the economy reeling into a severe recession, if not depression. The problem is spending, and all the talk of the “rich” not paying their “fair share” and efforts to trivialize Mr. Norquist are red herrings designed to divert attention from a government that keeps expanding. It has been for these reasons that Grover has been portrayed as a malevolent Svengali who has a stranglehold over Republicans. Democrats see the problem as being one of too little revenue, not one of excess spending. Both sides express some truths and a lot of untruths; though, again, the real problem is spending. When cuts are offered, they are not real “cuts.” All federal spending is assumed to grow at some predetermined rate. So when they discuss “cuts” they are speaking of cuts in the rate of growth, not what we homeowners and taxpayers mean when we speak of cuts.
To hear the talking heads on TV and their “expert” guests, one would conclude that if only the Republicans agreed to raise taxes on the “wealthy,” everything would be hunky-dory. As one Congressman pointed out, such increased income would cover eight days of operating the government. We have problems – spending and future obligations that a welfare state produces – that the President avoids like the Plague and which I suspect neither Harry Reid nor Nancy Pelosi even realize exist. I single them out because they are such extreme examples of idiocy, adamancy and partisanship that wallow in Washington. Republicans don’t fare much better. Does Mitch McConnell really understand the speed with which we are running out of gas? The one politician who has been on the forefront of attempting to address entitlements, and the $60 to $80 trillion unfunded obligations those programs entail, has been Paul Ryan, and he was muzzled on the campaign trail last fall.
Sometimes one must settle for half a loaf, and that is Grover Norquist’s biggest problem. Adamancy is fine for an advocate (which he is), but doesn’t work as well as compromise and flexibility, something Bismarck and Lincoln instinctively understood. (Lincoln knew where he wanted to go, but was flexible as to which route to take.) Grover favors reform, but only if it is accompanied by tax cuts, so that the net is no increase in revenues. I do have a problem with that. In my opinion, the goal should be growing the economy more rapidly. Tax reform should spurt economic growth. Properly done, the economy would speed up and revenues would increase. That should be the desired outcome. History tells us that a lower, flatter and broader tax provides the best inducements for growth. But keep in mind that Grover’s indomitable opinions are equally matched by a President noted for contumacious views toward those who disagree with him. Following Harry Reid’s announcement last week – “I am not going to be a part of having Social Security as part of these talks relating to this deficit” – the White House concurred with Mr. Reid. Mules pulling in opposite directions don’t get much work done.
But make no mistake. The problem facing the country, as we march blindly toward the cliff, is not Grover’s obstinacy, or even his presumed Svengali-like control over credulous Republicans. The problem is too much spending and a dogmatic refusal on the part of the President and his cohorts in Congress to acknowledge that past and current promises – be they Social Security, Medicare or Obamacare – cannot be paid for, unless we dramatically recalibrate our government. No one knows how long is the road down which we are kicking the pail. It could go on for four more years, or perhaps twenty. Faster economic recovery will mask the problem for a few years, but it will not postpone the eventual day of reckoning. Grover Norquist’s approach is obviously distasteful to some and unhelpful in its pigheadedness, but at least he illuminates the problem. In the end, it is the Republicans who signed the pledge, not Grover Norquist, who look foolishly recalcitrant.
What would be best for the country would be to extend for a few months the current tax system and to postpone sequestration, giving both sides time to work out real tax and entitlement reform. After all, politics should be the art of the possible. In current day Washington, that is probably a phantom hope. I am not sure Grover Norquist is a help in that regard, but neither do I believe are the President and the Congressional leadership.