Norquist on Now or Later

http://www.futureofcapitalism.com/2011/05/norquist-on-now-or-later

In a Bloomberg News column, Jonathan Alter notices the president of American Tax Reform, Grover Norquist, urging Republicans to postpone a grand deficit-reduction deal until after the 2012 election:

"Why would you cut a deal between now and 2012 when you're going to get a Republican Senate?" Norquist asks.

Mr. Norquist is both smart and savvy, so I hesitate to second-guess him, but since he is asking, here are a few reasons:

1. Even if the Republicans win the Senate in 2012, they are unlikely to win a 60-seat majority, so the practical effect under Senate rules won't be that different from their current more-than-40-seat minority status.

2. Even if the Republicans win the Senate in 2012, President Obama might get re-elected, which much of the press will interpret as a mandate for his policy proposal of raising taxes on the "rich" (even if in fact such a result could in fact be a validation of his agreement not to raise taxes on the rich, his extension of the Bush tax cuts for two years.)

3. If the House Republicans elected in 2010 fail to make meaningful progress on cutting government and reducing the debt and deficit problems, they may lose in 2012.

4. Never mind the partisan politics of it — think about what's better for the country, a debt-deficit reduction deal now, or another year, 2012, and as a practical matter, also 2013 (because spending and taxing levels for 2013 will be largely set pre-election, so make that two years), of out-of-control spending adding to the debt and raising fear of either inflation or job-killing tax increases down the road?

It makes sense to warn Republicans not to agree to a bad deal now just for the sake of getting a deal pre-election. But it's also worth remembering that if Republicans do get an acceptable deal now, they always have the option of going back and renegotiating that deal after 2012 if they come out after the election in a stronger position.

by Ira Stoll  |  May 6, 2011 at 7:28 am Related Topics:  Government Spending, Taxes receive the latest by email: subscribe to the free futureofcapitalism.com mailing list