Does taxation hold the key to reforming the government? The famous anti-tax crusader makes his case. April 4, 2013

GROVER NORQUIST, Founder, Americans for Tax Reform

 

In Washington, D.C., we have a meeting every Wednesday at ATR [Americans for Tax Reform] in a room about this size, 150 people, big circle. Thirty people present for three minutes each about what they’re doing and what they’re up to. The point is you want to make sure the broad center-right knows what everybody else is doing. It’s nonpartisan, but most of the people are Republicans, conservatives, libertarians – the Reagan Republican conservative movement. The modern Republican Party, if you’re trying to figure out what the Republicans will and won’t do.

Taxpayers: Don’t raise my taxes. Property owners: Don’t violate my property rights. Everybody is there because on the issue that moves their vote – not necessarily all issues, but the issue that moves their vote – what they want from the government is to be left alone. Businessmen and -women: Don’t tax or regulate my professional life out of existence. Second Amendment community – I serve on the board of the National Rifle Association – you don’t see gun owners knocking on your door on Saturday arguing that you should become a hunter or insisting that every fourth grade child read books in public school that has two hunters. They just wish to be left alone with their Second Amendment rights.

Around the table all the various communities of faith – people for whom the most important thing in their life is practicing faith, transmitting it to their kids – they simply wish to be left alone to do that.  Evangelical Protestants, conservative Catholics, Orthodox Jews, Muslims, Mormons – they don’t agree on who gets to heaven or why, but they do agree that they should be left alone and all those other guys around the table who completely misunderstand scripture can go straight to Hades on their own, but that’s the cost of me being able to get it right. The homeschooler movement, the people concerned about school choice, want more control over their own education for their own children.

Around the table everybody is in on their vote-moving issue. What’s important to understand if you’re trying to manage the Republican Party or argue with it or inform it, understand why they’re there in the first place, all the various groups. You can get people talking about any number of issues. We saw this with Pat Buchanan. He said polling data shows that 70 percent of Republican voters think there is too much free trade with China, 70 percent of Republican voters think there are too many immigrants – and he got 1 percent of the vote. Now, he forgot to ask the second question: “Having told me politely what your position was on those issues because I asked, I forgot to ask – do you care? Do you care enough to vote on that issue? You may talk about it – talk radio shows talked at great length about some of these issues – but do you vote on that issue?”

This is where politicians get in trouble all the time. They hear people talk about an issue, they look at polling data, and they say, “See? Everybody agrees on that issue. I will take that position and therefore I will win.” There are a couple of issues. One is, do you believe that if I run for mayor I have any say on the subject you just brought up? Or if I run for president? Two, is that the issue you vote on, or do you vote on a different issue?

It also allows you to work with your coalition. The modern Republican Party’s coalition, if you polled the religious right, evangelical Protestants, they would tell you they were for prayer in school. So the Republicans for several years [said], “Let’s have a prayer-in-school constitutional amendment,” because the court had said you can’t have it without an amendment, and 90 percent of the people in the country would say they were for it; And you’d lose votes on it because 3 to 5 percent of religious minorities were very strongly against it and worried about what the prayer would look like, and all the guys who told you they were for it didn’t vote on the subject. How do you lose when, “My pollster tells me it’s a 90 percent issue”? Ninety percent of the people go, “It looks fine,” and 5 percent of the people say “nah-ah.” The only guys who remember on Election Day what you said are the five.

What happened? That impetus became the school choice movement. You went to the same people and said, “How would you like the ability to decide where to send your kid to school, for academic reasons or for questions of religious schools?” All of a sudden religious dissenters go, “I’m in. I’d like that because I’m a religious minority and that would protect me and give me more control over helping my kids’ education.” Instead of dividing folks against you, it actually was part of outreach and the people who said they wanted prayer in school were actually sort of commenting [that] they’d like more values in their school, but school choice would give you that, too. You can take an issue that appears to divide your coalition or divide you from others and turn it into a more unifying [issue]. 

It also explains why, in the modern Republican Party, we keep on having these predictions of coming splits. I remember the 1980 campaign; Reagan was running for president and The New York Times said, “Some of the people voting for him have jobs. Some go to church. They’ll be at each other’s throats any moment.” I remember thinking, “Why would they be at each other’s throats?”

Because as we manage the meeting in D.C. – and 47 states have similar meetings in and around the conservative movement in the Republican Party – the guy who wants to make money all day looks across the table at the guy who wants to go to church all day and says, “That’s not how I spend my time, but that doesn’t get in my way.” They both look over at the guy who wants to fondle his guns all day and say, “Well, that’s not how we spend our time, but OK.”

So they’re not in conflict on a vote-moving issue. That’s not to say they all have tea together. They don’t have to agree on some 20-point plan. You just need the candidates to stand in the middle of the room and say, “I’m going to leave your kids alone, your faith alone, your money alone, your business alone, your property alone, and then let’s go do stuff.” That’s what has allowed the center-right coalition, the Reagan Republican coalition, to hold together.

Can a candidate misunderstand why somebody is in the room and speak to them on secondary and tertiary issues which they understand but which frighten, irritate and chase away others? Yes, and we’ve seen people do that. That’s why it’s important that the candidates understand why everyone’s in the room. I got a call when Hillary Clinton was running for Senate in 2000 from a New York reporter. The New York reporter said, “Hillary Clinton was just up in New York and she said what progressives need is one of those meetings like Grover has where we get everybody together. What do you think of that?” says the reporter.

I walked through how our coalition worked and I said, “I think Hillary’s coalition, the left-progressive coalition, would have more challenges.” Every once in a while they announce in D.C. that they’re going to put one of these meetings together and the challenge is, who is around the table? The modern Democratic Party: Trial lawyers, labor union leaders, big city political machines, two wings of the dependency movement, people locked into welfare dependency, guys who make $90,000 a year managing the dependency of others, making sure they don’t get jobs and become Republicans. Then you have all the coercive utopians, people who get government grants to enlighten their moral inferiors on how they should structure their lives. These are the people who mandate that cars are too small to put your entire family into, who come up and mandate that toilets don’t flush completely, and on the Sabbath you have to separate the green glass from the brown glass from the white glass for the recycling priests. They have a list of things that you have to do or you’re not allowed to do that’s slightly longer and more tedious than Leviticus. It goes on and on and on and on.

Now, the left’s coalition can work together as long as we keep putting more money in the center of the table. Then everyone can get along cheerfully like they do in the movie shortly after the bank robbery: One for you, one for you, one for you. Everybody around the table’s happy and cheerful, but if the pile of money in the center of the table begins to dwindle, then all the guys around the table begin to look at each other a little bit more like the second to the last scene in the lifeboat movies. Now we’re trying to decide who we eat or who we throw overboard, which explains, how does the Republican Party act? How does the Democratic Party act?

First thing the modern Republican Party says is, “Stop throwing money in the center of the table. Stop hiring more Democratic precinct workers.” So [number] one, no tax increases. There’s a political reason. Don’t do tax increases, the other team hires Democratic precinct workers with it. Two, the other is, until you say no to tax increases, you never reform government. This is always the second half. A lot of people focus on don’t raise taxes. Fine, good, if you get that one right it’s a very helpful step. There is a second step: Reform government so that it’s more effective and costs less. You cannot and will not ever have the second conversation until the first conversation is closed. We’re not raising taxes; end of conversation. Now we’re going to reform government.

If the door is open to tax increases, whatever you start to do – reform of government, asking whether something you’ve been doing for 50 or 20 or 100 years still makes sense – well, we’ll just raise taxes, keep doing everything we’ve been doing. You had that new idea, Fred; we’ll just get more money and do your new idea, too. We’ll put new barnacles right on top of the old barnacles and we’ll just keep going.

I would argue we just lived through the third big fight on this subject. In 1982, the Democrats went to Ronald Reagan and said, “If you raise taxes one dollar, for each dollar of taxes you raise, we will cut spending three dollars.” Since Democrats had the House and Republicans who thought like Democrats were running the Senate, and Reagan was kind of outnumbered, he agreed to this three-to-one deal and evidently believed it was going to happen. Taxes went up and spending didn’t go down; it went up. He didn’t get three dollars in cuts, he didn’t get two dollars in cuts, he didn’t get one dollar in cuts – he didn’t get any cuts. Spending went up because they took all the money and spent more.

Eight years later they went to George Herbert Walker Bush, who had not been paying attention, and said, “You give us one dollar in tax increase, we’ll give you two dollars of spending cuts.” Now, I thought that that was just insulting. It seems to me if you’re going to cheat somebody, you give them $10 in imaginary spending cuts. Instead they said, “You are a cheaper date than the last guy and you get two dollars of imaginary spending cuts.” He took the deal. Taxes went up. Spending went up more than was planned. It didn’t go down less than we were promised. Taxes went up, not down.

Having lived through those two things, and watching George Herbert Walker Bush – who managed the collapse of the Soviet Union, kicked Iraq out of Kuwait without getting stuck occupying the place for a decade, who had a fairly successful presidency – there was one problem, the tax increase, and he threw away a perfectly good presidency. That’s [why] from ’94 on, we started to get Ivory Soap percentages [“99 and 44/100 percent pure”] of the modern Republican Party making a commitment not to raise taxes. They said, “I’ve seen this Lucy-Charlie Brown football thing with tax increases and spending cuts. I’m not doing that again.”

 

Life of the party

People say, oh the Republican Party disappeared off the map in November of 2012. Thirty Republican governors, 20 Democratic governors, 25 states with complete Republican control, good for about a decade because of redistricting, not a one-off thing, and 13 states run by Democrats; twice as many Americans, the majority of Americans, live in states run by Republicans and at the national level, thanks to the marvels of redistricting, the House of Representatives, which is Republican now, will probably stay Republican for the decade, the Senate’s up in two and four years, the presidency is up in four years, so I think the Republican Party is poised to do well electorally.

But that also does depend, I think, on some reforms as we move forward in the future. To set the stage as to where we are, I think some of the guys who announced that the Republican Party disappeared in November missed something, and we can get into why I think Obama’s first term lasted two years, up until the Republicans took the House and started to say no, and his second term ended on the second of January when he signed the fiscal cliff deal and made all of the Bush tax cuts, which had been temporary, and the AMT [Alternative Minimum Tax] Patch, which had been temporary, he made 85 percent of them permanent. He had a sword, which was that every two years these tax cuts disappear. If he’d let them lapse every two years, or let them lapse every year, whenever he negotiated with the Republicans on spending, like the sequester, he would say, “If you insist on a budget cut, I will insist on not letting you keep as much of next year’s lapsing tax increase.”

How big was the sword he once held and holds no longer? It was a $500 billion tax increase on January 1st. Lasted a whole day? On January 1st taxes went up $500 billion. Bush 2001 tax cut went away, 2003 tax cut went away, and the AMT Patch, which was a huge piece of that, went away. Eighty five percent of it was restored for 98 percent of Americans. Now we go forward.

The president took his leverage and threw it away. He just walked away from it. Now when he goes into the sequester and says, “How about not having the automatic sequester? Not having the $1.2 trillion in spending cuts?” The Republicans looked at him and said, “Thank you, no.” He had no argument. He had no clout, no ability to force the Republicans to stop the spending cuts. He could have had it. He did have it. He threw it away. He set it to the side. Now there isn’t anything that the Republicans need him to do that he’s willing to do, so we’ll just manage the sequester, manage the reduction in spending, wait for a different Senate, wait for a different president and pass [Rep. Paul Ryan’s legislation].

There aren’t going to be any massive new spending programs, massive new taxes. There’s what you could do through the executive orders, but not legislative progress for his agenda.

To this day I have interesting conversations with really smart Democrats who tell me I’m right. They see that they had this leverage, they threw it away and they don’t know what they do now.

 

Question and answer session with Jonathan WEBER, West Coast Bureau Chief, Thomson Reuters

JONATHAN WEBER: In your remarks you did a good job of sort of parodying the Democratic position on things in general, but the difficulty it seems is that those are majority positions, for the most part. People like their Social Security, they like their Medicare, they like their public schools, and if you look at the election results, if you look at all the polling, the sort of no new taxes/all taxes are bad [approach] – that’s not really a majority view. How do you manage with a position which is essentially a minority position?

GROVER NORQUIST: For starters, I’d point out that the polling that Gallup and others do – “Would you like a larger government that did more things and cost more in taxes, or a smaller government that provided fewer services?” – they even use that phrase, which I think tilts things in their direction, you get 2-to-1, 3-to-2 majorities for less government that costs less and does less for you. You could have a government that could cost less and we could pass on farm subsidies, and we could pass on occupying countries we can’t pronounce, and I’m not sure we’d notice the lack of service that we lost.

WEBER: [You’ve said] that the red states will stay red for 10 years because of redistricting, and I think a lot of people feel that the kind of partisan redistricting is fundamentally anti-democratic and that is in fact why the House is the way it is. In California there is now nonpartisan redistricting. How do you respond to that view that this kind of gerrymandering is really not the way we should run our government?

NORQUIST: For about 200 years we had gerrymandering, and up until the last 15 years the Democrats controlled the process in most states and never whined about it.

WEBER: That’s not the question, though.

NORQUIST: It is the question, though. You can’t change your position on this stuff and go, “Now there’s a problem.”

WEBER: I know. I’m just asking the question, today do you think that gerrymandered redistricting is good public policy?

NORQUIST: You have to take that question apart because the Voting Rights Act requires gerrymandering on racial grounds. This was a liberal’s idea. We’re living with it. They extended the law 25 years. Why did the liberals do that and why does it damage the electoral process? Talk to liberal Democrats, why they wrote that bill, why they did it, why they like it? Don’t stick the Republicans with the Democratic legislation which in fact hurts the Democrats, but they did it. I would argue, you take a look at these states. I was talking about over the next decade that it stays like this, partly that people won elections and also, the Democrats in Illinois gerrymandered it. I don’t know who you think was running the California one, but it was run by Democrats and Democrat consultants, which is why they gave themselves the two-thirds majority that you have in California. You had to work at those districts to get it. I realize it was called nonpartisan, they called it that in New Jersey, too, and I think that’s clever, but it was a clear partisan redistricting. Talk to any Republicans.

WEBER: Yeah, well Republicans would say that. I don’t think most people think the redistricting was partisan in California.

NORQUIST: OK. Do you think your pension is fully funded? [Laughter.]

WEBER: Would it be fair to say that you kind of reject the Christian right agenda, which says that governments should enforce a set of religious based views around contraception, abortion and gay marriage in particular?

NORQUIST: Well, on contraception I think there’s an easy question there. You say the federal government ought not to be taking money from people and spending it on that issue. People should handle their own situations. If somebody finds it morally problematic as Roman Catholics can, you shouldn’t tax them and fund something that is problematic. Nobody has told you you can’t do anything. But we’re not going to force you to fund it.

WEBER: How about gay marriage?

NORQUIST: Gay marriage is the interesting one. Europeans screwed this up a long time ago when they got the state involved in marriage. Before that, it wasn’t. How do you disentangle the state’s interference in what people of faith see as a sacrament? Then the state stepped in and grabbed a hold of it and has been redescribing it for some time.

I tend to think that you’re going to see gay marriage, gun control, a number of issues be ones that the 10th Amendment and federalism help to answer. Do you need a one-size fits all, top-down effort, or do you have different states doing different things? Fears people have on gay marriage may evaporate when they look at New York do it for a while and they go, “Oh, that didn’t do what I thought it would do.”

You’re seeing the same conversation now on marijuana prohibition. Some states for some time have been having a little lighter hand on that. I actually much prefer 50 states taking 50 different approaches on difficult questions, because then you can look around and see what’s worked and see what doesn’t work, and if there’s a fear that’s real, and if you liberalize the marijuana laws in Colorado and everybody falls to pieces, then you back up. If you liberalize and that’s not what happens and it’s no worse or better than alcohol, which has its problems, you go, “OK, that’s not what we feared.”