Opinion: Debt ceiling gives GOP leverage in deficit negotiations

Should Republicans agree to raise taxes in exchange for spending cuts?

On Jan. 1, 2013, two very different things happen. First, the series of tax cuts that has been extended over the years will — once again — lapse. If they are not continued, total taxes on the American people will increase by $500 billion next year alone. This is bad.

ADVERTISEMENT
The second part of the “fiscal cliff” is sequestration that will automatically cut about $100 billion each year for 10 years. This is part of the promised spending restraint — a reduction from President Obama’s planned increases. This is good (one can argue about the shape of the savings, but the amount is progress).

Had Republicans elected Mitt Romney and won the House and Senate, they would have extended all the George W. Bush-era tax cuts, accepted the lower spending levels of the sequester and passed Wisconsin Rep. Paul Ryan’s plan: tax reform and entitlement reform.

But Nov. 6, 2012, continued the status quo of the 2010 election: divided government. Now what?

Obama argues that his win in November, with a 3-point margin, gave him a mandate to raise taxes by $1.6 trillion. His 2013 budget has no significant savings that were not already mandated in law — the savings from the Budget Control Act — or reality: We were never going to spend $800 billion occupying Iraq. They threw us out.

Republicans note that Obama won by spending 86 percent of his TV ad buys trashing Romney as a man. He won a mandate to “not be Romney.” Obama won fewer votes in getting reelected than he won the first time — unlike the Reagan, Clinton or Bush reelections — with his margin falling from 7 points to 3 points. Republicans also note that they won control of the House sitting in new districts that will stand unchanged for the next 10 years. And, unlike Obama, the Republican House has twice voted for a real budget: the Ryan plan that brings the budget to balance, reforms the tax code and does not raise taxes. One does not need to raise taxes — one must “simply” bring the runaway spending to heel.

Obama would like to have Republicans repeat the history of 1982 and 1990, when first Ronald Reagan and then George H.W. Bush were promised $3 and then $2 of spending cuts for every dollar of tax hikes. The tax hikes were real, permanent and still with us. 

More than 90 percent of Republicans in the House and Senate have run for office promising voters in writing that they will oppose any and all efforts to increase taxes. Almost every Republican made that commitment verbally. 

Two years ago we faced an identical situation. All the tax cuts that are set to lapse in January 2013 were scheduled to lapse in 2011. A Democratic president, a Democratic Senate and an incoming Republican House chose to extend all the tax cuts for two years. Obama said he didn’t want to damage the weak economy. We still have a weak economy. 

Will Obama force the nation over the fiscal cliff to “prove” his mandate? Maybe. He threw away his 70 percent approval rating in a matter of months by overstating his “mandate” in 2008 when he at least beat a war hero. The Tea Party was a reaction to “spend too much.” And the backdrop to the next four years is that all the unpleasant bits of Obama’s Affordable Care Act that were deliberately delayed until after 2012 will now hit. Ditto the thousands of regulations held back — in the belief they were popular? — until after the November election. All the stuff Obama’s team knew would be painful for average Americans now comes tumbling out onto the field.

Raising taxes harms the economy. See George H.W. Bush’s second term. Raising taxes is what politicians do instead of reforming government and spending less: see 1982, 1990, 1993. Raising taxes is not part of solving the problem of spending too much. 

Taxpayers are best protected if the “negotiations” are on CSPAN so they cannot be misrepresented by “spokesmen.” The debt ceiling that Obama’s plans bump into every month or so for the next four years provides plenty of “leverage” for the GOP to trade for spending cuts — as done in 2011 — or continuing the lower rates. The debt ceiling and continuing resolutions to fund the government are more secure tools than a hope that Obama has become Bill Clinton.

Norquist is president of Americans for Tax Reform, and his Twitter handle is @GroverNorquist.