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Anti-Tax Crusader Grover Norquist Compares Balanced Approach to ‘Pink Unicorns’

Since 1986, the Taxpayer Protection Pledge has been signed by politicians promising to oppose increases to the marginal income tax rate. But some Republicans say they may be willing to break the pledge to avoid the fiscal cliff. Judy Woodruff talks to pledge creator Grover Norquist, president of Americans for Tax Reform.

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    Negotiators in Washington signaled publicly today that there had been little progress in reaching a deal to avert the fiscal cliff with 19 days to go until a year-end deadline.


    I remain the most optimistic person in this town. But we have got some serious differences.


    That downbeat assessment from House Speaker John Boehner came after he and President Obama traded fresh offers this week.


    We spoke honestly and openly about the differences that we face. But the president's called for $1.4 trillion worth of revenue. That cannot pass the House or the Senate.


    The president originally sought $1.6 trillion in revenue over 10 years, before lowering his target to $1.4 trillion. The money would come from raising rates on the top 2 percent of wage earners and curbing loopholes.

    Boehner's counter was little changed, $800 billion in revenues from closing loopholes and capping deductions, but no rate hikes.

    Republicans have also demanded entitlement reform, and in a Tuesday interview, the president wouldn't rule out raising the Medicare eligibility age by two years, to 67.

    Today, his White House spokesman, Jay Carney, summed up.

  • JAY CARNEY, White House:

    He is willing to make tough choices. And he has made clear and specified the spending cuts that he is willing to make. And he has said that he is willing to go further as part of a broader deficit reduction plan. But he will not extend the tax cuts for the wealthiest Americans.


    Despite the apparent stalemate, House Republicans pledged to keep at it.


    We're going to stay here right up until Christmas Eve, throughout the time and period before the new year, because we want to make sure that we resolve this in an acceptable way for the American people.


    But House Minority Leader Nancy Pelosi fired back that Republicans are the ones holding everything up.

  • REP. NANCY PELOSI, D-Calif.:

    If we were waiting for something, you could say it's well worth the wait. But we're just — the Republicans are just delaying.


    And Federal Reserve Chairman Ben Bernanke warned again that delay is dangerous.

    BEN BERNANKE, Federal Reserve chairman: Even though we're not yet even reached the point of the fiscal cliff potentially kicking in, it's already affecting business investment and hiring decisions by creating uncertainty or creating pessimism.


    All of which threatened to cast a pall over the holidays, at the Capitol, and just about everywhere else.

    And that brings us to our continuing series of conversations on this topic — tonight, one of the more outspoken voices against raising taxes.

    Grover Norquist is a conservative lobbyist and the president of Americans for Tax Reform. Most famously, he's known for getting many elected Republicans to sign a pledge not to raise taxes. But now some lawmakers are suggesting they may be willing to change their position.

    Grover Norquist, welcome to the program.

    GROVER NORQUIST, Americans for Tax Reform: Good to be with you.


    And, in fact, there are a growing number of Republicans who are saying either they have renounced that pledge or they may be prepared to renounce it in order to deal with the serious fiscal problem facing the country.


    Well, interestingly, the problem we have is too much spending. And so the only solution to spending too much is spending less.

    We don't have a problem with not enough in terms of tax revenue coming in. The problem is government spends too much. So raising taxes is what politicians do, instead of reducing spending. That's the argument Boehner's having with the president of the United States. The president wants higher taxes. Boehner would like less spending.


    Well, I'm sure you know a number of economists talk about the importance of a balanced approach. It was what was in the Bowles-Simpson commission report.

    But let me ask you about not only the exit polls on Election Day, but poll after poll since the election shows distinct majority — of elections — say they believe that it's the right thing to raise taxes on income over $250,000 a year if that's what it takes to deal with the deficit. Why are those people wrong?


    Well, the actual exit poll, the question of should we raise taxes to reduce the deficit on Election Day, was 63 percent no.

    So people said no to raising taxes to reduce the deficit. Why? Well, if you look at other polls over the course of years, 75 percent of the American people understand that if you start a conversation with we're going to raise taxes on the rich, it ends with raising taxes on everyone, like the AMT, the Alternative Minimum Tax. Supposed to hit 150 people in January. It hits 30 million American families.

    So — and then the other part of that is, if you raise taxes to reduce the deficit, will they spend the money or will they reduce the deficit? Over 60 percent of Americans point out they will just spend the money. So the argument for raising taxes, the American people see through that.

    It's not a tax on the rich. It will hit everyone. The income tax was only supposed to hit people who made $11 million or more when they put it in. Now half of Americans get hit by it.


    Well, the polls I'm seeing do show that a majority of Americans say they're prepared to go along with higher taxes for people making over $250,000 a year.

    But let me ask you, Grover Norquist, about what happened in the past when tax rates went up under President Clinton and under previous eras. Tax rates went up, and there was still strong economic growth.


    Well, you can go to the Clinton years. The first two years of the Clinton administration had slow growth and not much job creation. And he raised taxes and he planned to spend every dollar that came in, in terms of a tax revenue, plus $200 billion.

    His five-year plan was $200 billion every year out because he was going to spend every penny that the tax increases brought in, plus $200 billion.

    However, he lost the House and the Senate because the American people objected to his tax increase. For six years, you had a Republican House and Senate. They didn't let him spend the money he wanted to spend. So the budget went into balance. They cut the capital gains tax, which gave you growth.

    So, the last six years, there were pro-growth tax cuts, and they didn't spend the money he wanted to. So it is true that, if you elect a Republican House and Senate as a result of tax increases, it helps with growth.


    Well, we can debate that at another time.

    But let me come back to what we talked about at the outset. And that is Republicans — more and more Republicans now saying they believe, OK, President Obama won reelection. In order to get a balanced plan to reduce the deficit, each side is going to have to give.

    For example, you have Sen. Tom Coburn, strong conservative from the state of Oklahoma, saying — quote — "I don't care which way we do it. I would rather see rates go up than do it the other way, because it gives us greater chance to reform the tax code and broaden the base in the future."


    Well, you have always had some Republicans who say maybe we could raise taxes as part of a deal. Coburn did two years ago.

    But, as I argued to Senator Coburn then, that if you put taxes on the table , you never get spending restraint. And in point of fact, the only time we actually got spending restraint out of one of these deals was two years ago, when we had the Budget Control Act for the debt ceiling. We cut spending $2.5 trillion, not a dollar of tax increase. Coburn was wrong that you had to raise taxes to get the agreement.


    But there are other Republicans that are talking about this now who have not said this in the past.


    Well, not too many. Actually, there have been a number that come out each time who say, maybe we could do this.

    But, in point of fact, if you raise taxes, you don't get the spending restraint just historically. It happened in '82, happened in '90.


    Well, let me ask you about cutting spending. You keep saying that you don't get the spending restraint. But if there were a guarantee, a commitment from the administration, from Democrats in the Congress they are going to vote and support reductions in spending, would you then favor a balanced plan that would include higher taxes?


    If there were such things as pink unicorns, what would I trade for them?

    The challenge is that the administration has been there for four years and done none of this. Every time they have entered into a negotiation, they have only wanted to talk about tax increases. Is it possible that the president changes his mind? That would be a good idea. We just haven't seen it before.


    The administration — the president has already talked about changes in Medicare. Just yesterday, he left open the possibility of raising the retirement age, which would lower the cost for Medicare — I'm sorry — not the retirement age, but the eligibility age for Medicare. That would cut the costs of Medicare, a significant entitlement.


    The spending restraint in his budget, what he put forward and every Democrat voted against in the House and the Senate, was to save a trillion dollars by not occupying Iraq for the next decade. That's not a serious effort. The Iraqis kicked us out of the country.

    It's not a real budget cut. He also wants to save a trillion dollars by counting tax cuts that have already — spending cuts that have already been put into law as part of the previous agreement.

    That's selling the same horse again. So that's $2 trillion of what he called spending cuts. One's phony. The other's already in law. He hasn't yet gotten serious about spending restraint.


    So are you prepared to see — to have the Congress go over the fiscal cliff, in other words? I mean…


    That's the question people asked when the president threatened to default two years ago. And people said, would the Republicans cause the default? No, only the president can cause the default, because only the president decides whether or not to pay interest bills.

    The president, I think, has decided to go over the fiscal cliff for a number of reasons, because he thinks he can blame other people for it. I hope he doesn't do that. But it's up to him. Two years ago, he extended all the Bush tax cuts without all this drama for two years. He could do it again tomorrow. He may decide to push us over a cliff.


    And, finally, Grover Norquist, will there be a political price to pay for Republicans who vote to raise taxes, if that is what it comes down to?


    Well, I think Republicans will take a look. Most Republicans have committed, not to me, but to their constituents, that they won't raise taxes and they will fight against tax increases.

    They have to — whatever they vote for, they have to go to their constituents and say, this wasn't a tax increase or let me explain to you what I did. But they have to talk to their constituents. Most Republicans have made it very clear they're not interested in raising taxes. They want to reform government.


    Grover Norquist, thank you very much for talking with us.


    Thank you.


    Online, we profile two lawmakers who oppose Norquist's pledge. Plus, you can watch other interview from our series.

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