Exciting buzz about Grover Norquist’s admission that letting the Bush tax cuts expire would not technically violate the “No New Taxes” pledge (which surprised me)–followed by his quick walk-back on it (which didn’t surprise me). I think Time magazine’s Michael Scherer has it right with his interpretation:
Grover’s admission that such a course would not violate the pledge is a big deal, and he is all over the place today trying to walk it back. But if you read his clarifications closely, he is not denying what he told the Washington Post. He is simply adding another fact: While such a course would not violate the pledge, he says, it would violate the position of Americans of Tax Reform. Here is Norquist today on MSNBC:
“There are certain things you can do technically and not violate the pledge, but that the general public would clearly understand as a tax increase. So I can be clear: Americans for Tax Reform would oppose any effort to weaken, reduce, or not continue the 2001, 2003 Bush tax cuts.”
So there is a huge difference between what the “No New Taxes” pledge literally says (that they can’t raise taxes with new legislation) versus the more aggressive version that’s what Grover and the other Republicans probably wish the pledge said (and in practice, how they have loosely interpreted the pledge): the “position” that revenues not go above those consistent with permanently extending and deficit-financing all of the Bush tax cuts.
It would thus be a true compromise on the GOP’s part if they were to agree to push the literal NNT pledge to its literal limits and agree to either:
1. reform the tax system in a way that sticks to a strict version of PAYGO, where any portion of the Bush tax cuts that policymakers want to extend (such as some or all of the marginal tax rate structure) be offset by additional revenues (such as through broadening the tax base/reducing tax expenditures); OR
2. let all of the Bush tax cuts expire as scheduled at the end of 2012.
In either case, the level of revenues achieved would be consistent with CBO’s current-law revenue baseline, which happens to be a level of revenues consistent with economically-sustainable deficits (for the next couple decades at least, while we need the time to get entitlement programs reformed), as well as a level of revenues that’s actually far higher than what any of the Democrats (in Congress or the White House) have been proposing. It would be a “compromise” for both sides of the aisle regarding deficit reduction, but would (surprisingly) increase the revenue-side portion of the solution for both, and yet would (ironically) not require the GOP to (officially) violate their No New Taxes pledge.
And speaking of the Democrats’ role in all this, I completely agree with what Ezra Klein says here.
I keep dreaming.
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