World leaders react to a historic shift in U.S. policy toward Cuba. Pakistan buries victims of a school massacre by the Taliban. And U.S. officials say North Korea is behind the hacking of Sony Pictures. A panel of journalists joins Diane for analysis of the week's top international news stories.
Tax policy has never been easy — for politicians to agree on or for Americans who are not accounting experts to understand. Now we have the so-called fiscal cliff looming over the nation, and the Obama administration and Republican leaders are at a stalemate on how to avert it. Anti-tax crusader Grover Norquist has played an outsized role in the debate. Most Republican members of the current Congress have signed Norquist’s anti-tax pledge. But with November elections over and the fiscal cliff just weeks away, some pledge-signers have begun to waver. Grover Norquist of Americans for Tax Reform joins Diane to talk about one of life’s two certainties: taxes.
- Rep. Ted Yoho Republican congressman-elect of Florida.
- Rep. Chris Van Hollen Democrat of Maryland and ranking Democrat on the House Budget Committee.
- Grover Norquist president of Americans for Tax Reform.
Video: Inside The Studio
Grover Norquist, president of Americans for Tax Reform, talked about the so-called fiscal cliff and his no-tax pledge. Norquist said President Barack Obama’s proposal to avoid the fiscal cliff is “unserious,” and he proposed broadcasting the negotiations on C-SPAN. “I think he’s trying to take us off the cliff and blame other people,” Norquist said about Obama. About the public negotiation, Maryland Rep. Chris Van Hollen replied, “It would be good if Speaker [John] Boehner actually put his plan on paper like the president has so the public can see what it is.” Norquist also responded to a listener’s question about why he continues to refer to policies enforced under President Ronald Reagan’s administration, even though more than 30 years have since passed since Reagan was president.
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. Tax policy has never been easy. Now, we have this so-called fiscal cliff, and the Obama administration and Republican leaders are at a stalemate on how to avert it. Anti-tax crusader Grover Norquist has played an outsized role in the debate. Most Republican members of the current Congress have signed Norquist's anti-tax pledge.
MS. DIANE REHMBut some pledge signers have begun to waver. Grover Norquist of Americans for Tax Reform joins me in the studio. I invite you to be part of the program. Give us a call, 800-433-8850. Send us your email to firstname.lastname@example.org. Follow us on Facebook or Twitter. Good morning, Grover. It's good to see you.
MR. GROVER NORQUISTGood morning. Good to be with you.
REHMGrover Norquist, you seemed to go from being the most powerful man in Washington to you have gone off the cliff to, now, you're back up on the mountain. Where are you?
NORQUISTIt's same old just me. And, of course, it's not me they're referring to. It's the general opposition that the American people and the Republican leadership in the House has towards raising taxes. And that's been a constant sense, oh, back when we were paying 1 to 2 percent of our income in taxes under British colonial rule. We were paying 1 to 2 percent of GDP in taxes, and the American people at that point said, we've had it with you, guys. This is too much.
NORQUISTSo it's -- there's always been a strain in American politics which views taxation encroachment as limiting to liberty, as limiting to economic growth. That still remains the case, and Obama has made a stronger case because he's really ramped-up the tax increases and the spending increases over the last two years. Bush didn't raise taxes, but he spent too much. He certainly spent too much.
REHMBut you are seeing some of those loyal Republicans, who had signed the pledge previously not to raise taxes, begin to back away. What does that tell you?
NORQUISTOh, certainly. For listeners who may not have followed all of this, the pledge is a written commitment, short, 70 words, where somebody running for office, Congress, Senate, state legislator, governor, president, says, look, if I go to Washington, the state capital, I'm going to reform government. I'm not going to raise taxes, no net tax increase. Tax reform, absolutely.
NORQUISTI designed the pledge with President Reagan when I -- we first set up Americans for Tax Reform to help the Tax Reform Act of '86 which was rates down, broaden the base, revenue neutral under-protected, didn't want tax reform to turn into a Trojan horse for higher taxes. So we did that, and, of course, somebody's pledge is as good as long as they're in the House or the Senate. You run for a different office, you have to take the pledge again.
NORQUISTWe don't hold a state legislator's pledge as a commitment in Congress or the Senate. But we have, I don't know, about 93 percent of the Republicans in the House and Senate have made this commitment, lot of governors over 1,000, 1,200 state legislators. And sometimes when there's pressure, some people either say, we might raise taxes.
NORQUISTGeorge Herbert Walker Bush signed the pledge, made that commitment, famously said, "Read my lips: No new taxes," and yet did break his commitment to the American people, not to me, not to me. I never said on a press release, saying he raised taxes. The American people figured that out all by their lonesome, and he couldn't get himself reelected. There are some very powerful ads that Clinton ran, attacking him for the tax increase and for breaking his commitment.
NORQUISTAnd now, more recently, there had been some people who said, well, maybe if we had a lot of spending increase -- spending cuts, spending reform, we could have a small tax increase. And there was some folks saying that luckily, the Obama administration has solved all of my problems because the budget they put forward is -- got no savings in it. And South Carolina Sen. Lindsey Graham, who is one of the first people who people points, oh, he would break the pledge.
NORQUISTWell, I've talked to Lindsey Graham personally, but I've also seen his public statements. Now, he insists on serious, I mean, he was talking to me on a 10-1 ratios of entitlement reform for tax increase, and it have to be permanent, meaning you couldn't revoke him...
REHMBut you know what...
NORQUIST...and that's not what he's getting. So...
REHMAnd, you know, it's not going to happen, Grover, that...
NORQUISTWhich, the spending cuts or the tax increases?
REHMThe huge spending cuts that you are saying must be -- must go along. You're also saying you want to see President Obama negotiate this deal in public on C-SPAN. Here's something written just Friday by a man you know, Christopher Caldwell, who writes for The Weekly Standard. He says that "Mr. Norquist claims that the pledge is something politicians make to their constituents, not to him.
REHM"But one wonders who authorized him to collect politicians' signatures on those constituents' behalf. The end of the pledge, if indeed that is what we are witnessing, means progress. It's just not budgetary progress."
NORQUISTWell, Ronald Reagan, if you want to know who I was working with when we put it together, and, of course, the pledge is a simple statement of what most Republicans say when they're running. But here's the reason why the pledge was important, and that is that a lot of politicians, you go back to the Roman Empire and the Persians and so on, will always promise, let me take over your province. I won't raise your taxes. And they (word?).
NORQUISTAnd more recently, politicians in the United States would say, I won't raise your taxes if you vote for me. But they usually put in some qualifying words. I'd rather not raise taxes now. It's not the time to race taxes. It's not a good idea to raise taxes during a recession. That was Obama. But when you purse it, they haven't actually promised anything. They've told you how pained they would be when they decide to raise your taxes.
NORQUISTNot that they won't, but the pledge, because it's in writing and available -- now, if somebody thinks that the American people would like taxes raised and the government spend more money, then they should run and say, I'll vote to raise your taxes. I'll vote to doing more spending.
REHMBut, Grover, the election is over. The American people have now spoken.
REHMThey have said they preferred President Obama's vision of what he believes should happen to that of Mitt Romney and the Republicans. Doesn't that send a clear message?
NORQUISTThe American people spoke, and the number speaks very clearly. There was an election, 435 members of the House. The Republicans in the House had not only voted for entitlement reform that would save $6 trillion over the debt, they -- out of debt that Obama was going to accumulate. They called for reducing marginal tax rates to 25 percent for individuals and for businesses.
NORQUISTThey actually voted for a budget, the Ryan budget. Democrats didn't put up a budget. Obama put up a budget which is what his been negotiating for. Every single Democrat in the House voted against it. Every single Democrat in the Senate voted against it. We had a race where all the people running for the House and Senate disassociated themselves from Obama's budget.
REHMBut that was then. That was then...
NORQUISTSame budget. The same budget.
REHM...before the election.
REHMThis is now.
NORQUISTRight. My argument is politicians should say the same thing when they're asking for your vote and when they're sticking it to you. And my point is the Republicans in the House said one thing and actually voted a budget. They're still with that position. The Democrats in the Senate voted one way, will not have anything to do with Obama's budget.
NORQUISTNow, they think that it might actually be a good idea now that they're safely past the election. But as to the mandate, what you just outlined is exactly Obama's interior thinking and why we may go over the cliff. Because Obama misread his mandate in 2008, he went from 70 percent support of the country when we voted for one thing to below 50 and lost the House because he thought that his vision had been endorsed as opposed to his TV ads, which are two different things.
NORQUISTHe has a very expansive vision and a very different sales pitch. Eighty-six percent of his ads this year were trashing Mitt Romney as a person. He'll give you cancer. He'll do all this other stuff. Eighty-six percent...
REHMI don't think he said that.
NORQUISTOh, one of the ads that was paid for on his behalf said that some guy who worked at one point for one of his firms got cancer and that was somehow Romney's fault. I don't know why they put it in the ad if it wasn't Romney's fault. That said, they went after him personally, 86 percent of the ads. He won a smashing mandate, overwhelming mandate not to be Mitt Romney. He did not run ads saying I want to spend $1.6 trillion and higher taxes.
REHMSo when you hear Bill Crystal of The Weekly Standard say, come on, folks. It's time for the wealthy to pay a little more. I don't see any problem raising taxes on the wealthy.
NORQUISTOK. Bill Crystal is a nice guy and I'm sure he's kind to pets and children.
NORQUISTHe doesn't do economics. He doesn't do domestic policy. He thought Petraeus should have been the Republican -- last time he gave any advice to Republicans, it was to nominate Petraeus for the presidency. So we'll pass on his advice.
REHMSo you're dismissing what Bill Crystal said.
NORQUISTLook, the Republicans running for the House and the Senate ran on a very different vision than what Bill is articulating, whatever it is, and that is that they wanted lower taxes, entitlement reform and spending reform. And they won the House. And I would argue that our friend Romney did not actually sufficiently run on that agenda or he'd have done better.
REHMAnd if we do go over the financial cliff, who do you think is likely to be blamed for it?
NORQUISTWell, that depends on whether or not we have accurate information between now and when there is a decision to "go over or under the cliff." Right now, there are these negotiations going on. And when I talk to people involved, they say the administration sits there and says, we want to raise taxes, and we're not interested in getting any spending restraint.
NORQUISTThen they send Geithner out on TV to say, oh, we have all these plans for spending restraint but they're rather fuzzy. And if you look at them, they don't add up. But he did it on national TV. My argument and Pete Sessions -- not Pete Sessions, Jeff Sessions, the senator from Alabama has called for putting those negotiations on C-SPAN.
REHMGrover Norquist, he is president of Americans for Tax Reform. When we come back, you'll hear some additional views. Stay with us.
REHMAnd welcome back. Grover Norquist is here in the studio. He's president of Americans for Tax Reform. Some people consider him one of the most powerful men in America. It depends on the moment and your perspective. Joining us now from Gainesville, Fla., Republican Congressman-elect Ted Yoho. Good morning to you, sir. Thanks for joining us.
REP. TED YOHOThank you, Diane, for having me on.
REHMI gather you are opposed to signing Grover Norquist pledge. Tell us why.
YOHOYes, ma'am, I chose not to sign it. I made a pledge and a promise to the people that I'd go up to Washington and do the very best I could for our district and our country. And signing a pledge wasn't going to solve the problems our nation faces fiscally. You know, and I made a pledge to, you know, two things: one is to our country, I pledged allegiance. And I made a pledge to my wife to be the best husband I could be.
REHMNow, as a conservative Republican, are you somewhat fearful that your constituents won't like your not signing the pledge?
YOHOI could not hear the first part of that question.
REHMAs a conservative Republican, are you fearful that your constituents won't like your not signing the pledge?
YOHONo, ma'am. In fact, we've had more response not just from Republicans, but from Democrats saying, you know, we appreciate you taking the stand and being your own person. And, you know, we got elected on our background and the people that knew us and our credibility. And, you know, that's one of the things I've developed over the last 29 years. There's a pretty good credibility in the business community. And, you know, people know how I am and where I stand, and they have the faith in that. And, you know, we're going to -- like I said, we're going to do what's right for this country.
REHMDo you see any...
REHM...excuse me, let me just finish and then I'll give you an opportunity, Grover.
REHMDo you see some of your fellow Republicans backing away from the pledge?
YOHOYou know, I've heard talk of that. But, you know, I can't answer for them. You would need to speak to those individually.
REHMOK. And from your standpoint, which would be worse, the Republicans backing the Obama administration budget plan or going over the fiscal cliff?
YOHOI think backing the president's budget plan is a disaster. I mean, you're looking at $1.6 trillion in tax hike, plus the new stimulus spending. And, you know, the stimulus is not going to work, plus the expanded power for himself, the president, to raise the debt ceiling without congressional spending or input. I mean, that's the wrong way for this country. You know, that's why we have the three branches of government.
YOHOYou know, we don't have a revenue problem in this country. You know, our debt is going to kill us, and the biggest part of our debt is our spending. We have got to get our spending under control. And if you look back where Canada was back in the 1960s when they had a real liberal congress or parliament and they put in all the entitlement programs and, you know, tax and spend more, you know, it killed their economy. And they're at the brink of disaster.
REHMAll right. Let me ask you the same question I asked Grover. If the Congress allows the country to go over the fiscal cliff, who do you think will be blamed?
YOHOI think the whole the government will be blamed. I mean, this is not something that Ms. -- Diane, this is not something that just showed up in the last six months.
YOHOThis has been, you know, over the course of the last 15, 20 years, bad policies and people not dealing with it. It's time for us to stop talking about it and putting another Band-Aid on it. These are going to be some tough decisions that are going to be -- have to be made. And this is the year we need to do it because if we don't make these decisions, we're going to be in the same place where Greece or Spain was.
YOHOAnd then you're going to have somebody from the outside determining for us, the Americans, how we're going to deal with our debt. And I think we need to all kind of come to the table and say, this is a time to put America first, not a political party. And that's what we have to do in this Congress. And that's why you're seeing new type of people being elected to Congress.
REHMAll right. Are you open to taking a question from Grover Norquist?
YOHOI'd be honored to.
REHMOK. Go ahead, Grover.
NORQUISTHey, Congressman. I was curious when you said you reflect civil and so on whether getting rid of congressional control of the debt ceiling was something that you considered part of being flexible.
YOHONo, absolutely not. I mean, if we were to do that, we might as well send everybody home in Congress. I mean, we've got to have the three branches of government there, and they need to get back in balance. And Congress has allowed so much of the power to be usurp from them that it's time that, you know, to go in there and have these hard debates and not try to put a Band-Aid on there where, you know, it's a temporary fix like what the continuing resolution that they just passed here -- I believe it was in September -- that's got to be dealt with in March.
REHMBut that is a different issue. Go ahead, Grover.
NORQUISTNo. It's central to the whole question because, of course, the president -- you're talking about becoming Greece. Have you had chance to read the president's budget, Congressman?
YOHOI've skimmed over it. I have not looked at it in entirety.
NORQUISTYeah, 'cause I get these breathless calls from people in the press when some congressman says that he might, under certain circumstances, if you gave him, you know, kajillion-to-one spending restraint tax increases, and it was ironclad and it couldn't be undone. Everybody I have talked to since this president's budget came out said that such -- it's a spending increase together with the tax increase. There's nothing there that either reforms government or limits runaway government and, in fact, he wants endless.
NORQUISTSo everyone I've heard from -- and you certainly saw this with the senator from South Caroline, Lindsey Graham, who is one of the first people -- folks that people pointed to and said, he might break his pledge and raise taxes. Having talked to the senator, the D's aren't offering him anything that he could ever vote for. So your -- you look at this budget and you see it as something that you could raise taxes to support?
YOHOYou know, I've talked about that before. If we went through and we did everything and I knew we put in earnest effort and we took care of the waste, fraud and abuse and a duplicate of programs that we have and we went every -- and did everything and the American people, you know, we went back to our district and we talked to the people and said, listen, this is where we're at. We've done a great job at cutting expenses.
YOHOAnd if my boat is sinking and the only way to plug the hole in the boat would be to raise taxes, I would have to be hard-pushed to do that. But, you know, we're a long way off from even getting to that point. And I've talked to the business people, you know, the people that have created great companies in our district. And they said, if I had to, I would, but I don't want to. And I'm a business owner, and I don't want to -- I feel like pay plenty of money in taxes.
YOHOAnd if you look at what Mr. Obama wants, if we did everything he wanted, it would -- our debt in seven years would rise $7.7 trillion. If we didn't do what he wanted, it would rise $9.1 trillion. It's only a difference of $1.4 trillion, which granted, it's a huge money. I don't have it in my wallet. But that adds on to what we already have. At the end of this year, we're going to be at $16.2 trillion and then you add 7.7 or 9.1.
YOHOAt that point, the $1.4 trillion is insignificant. What we've got to do is deal with it now. You know, if you go back to 1989, we were $2.9 trillion in debt. When Mr. Bush got in office, it was roughly 5.4, $5.7 trillion. And when Mr. Obama got in, it was 10 point, say, 5 trillion. At the end of this year, it will be $16 trillion.
YOHOThe question is not whether you have to deal with it. When are you going to deal with it? It sure would've been a heck of a lot nice -- nicer to deal with it at $2.9 trillion, where we could've had it, you know, where we could've dealt with it in a reasonable fashion. We're into a point where it won't be reasonable and we have to deal with it now.
NORQUISTWell, we're looking at the president's trillion dollars in additional taxes to pay for Obamacare, 90 percent of which he put off until conveniently after he got himself reelected.
NORQUISTSo those tax increases are baked under the cake. He's refusing to negotiate on those. So, you know, his point is that he won't back off of the expense of Obamacare or the taxes of Obamacare.
NORQUISTHe's put such a line in the sand that if he drives you guys over the cliff because you won't do what he wants, whether we go over the cliff or not right now, we're scheduled for his trillion dollars of tax hikes on Obamacare, the tax on medical devices, wheelchairs and hospitals, the tax that will damage and maybe kill health savings accounts and flexible savings accounts that tens of millions of Americans used to have and won't be able to keep.
REHMBut let me just ask, Congressman Yoho, would you be more willing to raise taxes on upper-income Americans, more willing to do that than to allow us to go over the cliff?
NORQUISTWill you fall to the president's demand?
YOHONo, ma'am. I think that's the wrong way to go, and I'm glad Mr. Norquist brought that up. We don't talk about the tax increase we've already gotten, Mr. Obama has already gotten. It's called Obamacare. And the Supreme Court -- you know, Congress passed a bill, which I don't want to get into too much, that was mostly for tax reform...
YOHO...but the Supreme Court said it was a tax. He's got a huge tax increase. There's over 18 taxes in there. And the best thing to do is look at ways to get the economy growing, and the best way to do that, talking again to the people in my district, is 100 percent get rid of the Obama health care plan...
REHMOK. Well, that -- apparently, that's not going to happen right now. So the question becomes are you willing to go along with the tax increase, or would you rather see us go over the cliff? Yes or no?
YOHOI'd rather not see a tax increase.
REHMOK. Congressman Ted Yoho. He has just been elected from Gainesville, Fla. Thank you so much for joining us.
YOHOThank you, Ms. Diane. Appreciate it. Mr. Norquist...
NORQUISTTake care, congressman.
REHMOK. And joining us now by phone from Maryland, Democratic Congressman Chris Van Hollen. Good morning to you, sir. Thanks for joining us.
REP. CHRIS VAN HOLLENGood morning, Diane. Great to be with you.
REHMIs it a hopeful sign for a fiscal cliff deal that some key Republicans are backing away from Grover Norquist's no new taxes pledge?
HOLLENWell, I'm still hopeful we'll be able to avoid the fiscal cliff, both the sequester piece as well as the tax piece. Of course if we go over the fiscal cliff, we're talking about $5 trillion in taxes on all the taxpayers throughout the country. What the president has proposed is let's take $1.6 trillion of that $5 trillion by asking higher income individuals to contribute more to reducing the deficit. The biggest part of that plan would be providing tax relief on 100 percent of American families and small businesses on the first $250,000 of income...
HOLLEN...and returning to Clinton-era tax rates on the portion of income above $250,000. That's about a little 4 cents on the dollar. And I believe, at the end of the day, Republicans will agree that it's a really bad idea to go over the cliff simply to protect those bonus tax breaks on the amount of income over $250,000.
REHMOK. Now entitlement reform is clearly a major issue in the budget talks. Why haven't the Democrats done more to reassure Republicans on this particular issue?
HOLLENWell, a couple of points, Diane. We just came through a presidential election where Mitt Romney and Paul Ryan and the Republicans beat up on the president for significant reform he made in Medicare. We saved about $716 billion by changing the way we reimburse providers. And, of course, not only did they say that was a bad idea. They proposed adding all that money back into Medicare, which actually would have shortened the solvency of the Medicare trust fund by eight years.
HOLLENIt's also important to point out that we already agreed to over $1 trillion in cuts -- I've been listening a little bit to the conversation -- and $1 trillion that were 100 percent cuts is part of the Budget Control Act. The president's budget has an additional $600 billion in savings. They cut things like excess agricultural subsidies. And here's a little-known fact. If you look at the 10-year window coming up, the president's budget had more Medicare savings than the Republican Ryan budget in the next 10-year window.
HOLLENSo the time -- right now, it's time for Speaker Boehner to come out and flesh out what he calls his revenue proposal. Let's see the details. The president has put every detail of his proposal on the table. And let's also see what Speaker Boehner wants to do on the cut side on the Medicare side, which he's gotten silent.
REHMAll right. Now you know as well as I do that Speaker Boehner called the president's proposal ludicrous. Beyond what President Obama has already proposed, what else needs to be done and can be done to find, say, additional savings in Social Security and Medicare?
HOLLENWell, on Medicare, as I mentioned, the president has a number of proposals in his budget already. He says we should go back to reimbursing pharmaceutical companies for what are called dual-eligibles -- people on Medicare and Medicaid -- the same way that they were reimbursed before 2003. He's also proposed reforms to Medigap policies because, currently, the Medicare program ends up indirectly subsidizing Medigap policies. If you actually look at the president's budget, as I indicated, within the next 10-year window, he has more Medicare savings than the Republicans...
REHMWhat about Social Security? Might there be a raise in the income allowed on which to tax Social Security?
HOLLENThe president's been clear, and I agree that we need to deal with Social Security on its own terms. It is 100 percent solvent until the year 2033. After that time, if we do nothing, it would pay 75 cents on the dollar. Now I am of the camp that believes we should act sooner rather than later to begin to address that issue. But right now, Social Security is owed over $2.5 trillion, funds that the Social Security system has put into the general fund. So I oppose the idea of trying to reduce the deficit on the back of Social Security. We can deal with Social Security and strengthen it on its own terms.
REHMOK. Now, I think Grover Norquist would like to ask a question. Are you willing?
HOLLENSure. Hey, Grover.
NORQUISTHey, congressman. We're sort of doing the circuit. We did Meet the Press yesterday, so we'll be meeting again. You voted for or against Bush's 2001, 2003 tax cuts?
HOLLENI wasn't in the Congress at the time.
HOLLENI thought it was a bad idea.
NORQUISTOK. The vast majority of Democrats voted against it. Now they're insisting on keeping it for some people, which I consider tremendous progress on the tax part of Democrats, recognizing that the Bush tax cuts were a phenomenal boon to lower- and middle-income people, for which they don't want to take it away.
NORQUISTBut I do think if you look at the budget forward, the president wants to get credit not only for tax -- spending cuts that he agreed to earlier that are in law, and therefore he's trying to sell us the same horse twice. But getting credit for not occupying Iraq for the next decade? I'm not sure that's a real budget savings.
HOLLENAll right. Let's take these one at a time.
HOLLENFirst, with -- well, first, with respect to the Bush tax cuts. We know, Diane, that at the end of that eight-year period, those tax cuts and letting -- did not do anything to strengthen the economy. In fact, combined with, you know, with the meltdown on Wall Street, we ended up seeing jobs go down. The deficit went up. The last time we actually had lots of jobs and a balanced budget was after Bill Clinton actually increased revenue. Let me say a word about the trillion dollars.
HOLLENThose are trillion dollars that are included in the Simpson-Bowles $4 trillion. We've always said we're going to try and get $4 trillion. That was part of it. With respect to the war in Iraq, the fact is the president has made a policy decision...
REHMAnd that's it.
REHMAnd welcome back. Here in the studio: Grover Norquist. He's president of Americans for Tax Reform. On the line with us from his office in Maryland: Congressman Chris Van Hollen. He represents Maryland's 8th district, and he is the top Democrat on the House Budget Committee. I want to help our listeners understand, we invited a number of Republican pledge signers onto the program but all declined. Going to open the phones now, 800-433-8850, first to Black Mountain, N.C. Good morning, Cindy. You're on the air.
CINDYGood morning, Diane. Thank you for this show. It is a wonderful, very informative show.
CINDYI'm just -- I have a comment and then I'm going to take it off the air.
CINDYI -- the first phrase I heard when Mr. Norquist started speaking was the American people. I'm one of the American people, and I think that the American people, the majority of them spoke when they reelected President Obama. And I don't think that any congressperson should put a pledge to not raise taxes above the oath to serve our country. I'm a veteran, and I love my country. And I'll take comments off the air.
REHMAll right. Thanks for calling. Grover.
NORQUISTWell, obviously, people who make the pledge that they won't raise taxes are doing so because they want to serve the country. They're aware that when we had Reagan-style growth of 4 percent compared to Obama-style of growth of 2 percent, if you do that for a decade, the federal government nets $5 trillion additional revenue. The best thing you can do to get revenue to the government and jobs to the American people is to have pro-growth policies, and Republicans understand that means not raising taxes. So, of course, you can do both.
REHMAll right. Congressman Van Hollen, do you want to comment?
HOLLENYes, Diane. Now, look, we've had a real-world experiment on these two different theories. President Clinton decided we needed to raise revenue as part of an effort to reduce our deficit. We ended up having over 20 million jobs created, and we balanced our budget for the first time in a long time. President Bush then gave the tax break, including the ones of the folks at the very top. At the end of that eight-year period, the economy essentially crashed, and the deficit was going through the roof.
HOLLENSo this notion that small increases in the marginal tax rates for high-income individuals is going to hurt the economy has just been disproven by history. If we really want to be dealing with the economic impacts going forward, maybe Grover will join us in calling for a one-year extension to the payroll tax cut, which provides assistance to 160 million working Americans and would do far more according to the non-partisan Congressional Budget Office than a small increase in the marginal tax rate with respect to the economy. It's much bigger than that.
REHMWhere are you on that, Grover?
NORQUISTI have no objection to continuing the -- that tax cut in that former or another one. That'd be fine. I'm not a Keynesian. I don't think that it has the same effect as marginal tax rates supply side. But it doesn't hurt.
REHMAll right. To Pittsburgh, Penn. Good morning, Paul.
REHMGo right ahead, sir.
PAULMy comment is, first of all, I don't recall ever seeing Grover Norquist on any ballots for election that I've ever noticed before. And I think that, you know, the Congress and Senate in the last four years has been the worst in history. And I think a lot of it, particularly the last two years, goes back to these Republican congressmen and senators, their pledge to Grover Norquist. I think...
NORQUISTHold on. Hold on. Sir, please, don't misspeak. That pledge is to the American people. If you want to read it, it's on our website, atr.org. I am very tired of Harry Reid misstating that, and I'm sorry if he confuses people. But do not repeat that error. It is a pledge to the American people and no one else. Read it.
REHMCongressman Van Hollen, do you want to comment?
HOLLENWell, look. You've heard a lot of Republican members of Congress come forward in the last couple of days, saying that when it comes right down to it, they think they've got to put the country first and that means resolving these budget issues. And if that means taking a balanced approach which has been called for by every bipartisan commission -- Simpson-Bowles, Rivlin-Domenici -- meaning that combination of cuts in revenue, that they're going to -- they're prepared to put that decision first.
HOLLENLook, Grover Norquist obviously has every right to go out and try and get people to sign this pledge. I really don't fault Grover, but people who signed that pledge should recognize that they are tying their hands in a way that could, I believe, hurt the country as we're seeing right now.
NORQUISTI support the framework of -- the bipartisan framework of groups like Simpson-Bowles. It says in order to tackle this issue, you need a mix. Grover strongly opposes the Simpson-Bowles formula. That's his right. But it's important to understand what a bipartisan group has recommended with respect to that mix of revenue in Congress.
REHMAll right. To Rochester, N.Y. Good morning, Bruce.
BRUCEGood morning. It's kind of said. The Republican congressman has kind of made my points for him. And if he keeps talking like that, I might vote Republican. The Republicans would do well to listen to him. We had these tax cuts that -- at the time of war that have increased our deficit, and nobody saying, you know, that we got to pay this off first before we can look at these other things. Certainly, we have to look at what the government is spending, but we can't pay for these wars on the back of the poor and disenfranchised.
BRUCEAlso, when you look at the job rates, the jobless rates going through Bush's era, they either went up or were negligible change. And it's certainly not the kind of scene, though, that we would expect from the kind of tax cuts that was taken out of our country. So -- and third and perhaps to Mr. Norquist, they are lies, damn lies in the statistics to try and equate Ronald Reagan's 4 percent to Obama's 2 percent when the type of things Obama came in was handed to him by the Republican Congress and president is an embarrassment...
REHMAll right. Grover.
NORQUISTOh, glad you brought it up. If you got a pencil, we can go through some real statistics. Government statistics.
REHMNot too detailed, please.
NORQUISTOK. No. Look, Ronald Reagan came in. He had double-digit inflation, 10 percent, 11 percent. He had a declining standard of living. And he had an unemployment problem. He had a recession deeper in terms of unemployment than Obama. So let's treat them the same. From the day that Reagan's recession bottomed out, the day that Obama's recession bottomed out to today, if Obama's economy had grown -- from the bottom of the recession, from when it turned around.
NORQUISTDon't give them -- blame him for anything that Bush or the Democratic Congress did, we would, today, have 11.5 million more Americans at work. That's the difference between a real growing recovery and what we've had. Eleven and a half million Americans today are out of work because Obama went in a different direction of spending and stimulus and Solyndra, and it didn't work.
REHMCongressman Van Hollen, do you want to comment?
HOLLENYes, Diane. I think, you know, Grover knows that the economists have looked at the very different kinds of recession that were faced by President Reagan and President Obama. President Obama faced a recession driven by a financial collapse and meltdown versus one driven by high inflation rates and other factors. And it is much more comparable to what we are facing at the time of the Great Depression when the bottom was absolutely falling out.
HOLLENPeople's savings went underwater because there were holdings in their mortgages and other things, which is a very different beast. And the fact of the matter is that the recovery bill, the stimulus bill, helped end the free fall in the economy and, in fact, stabilized the economy. We have now seen well over 30 consecutive months of positive private sector job growth, more jobs created on net now over the period of the president's administration, frankly, compared to the two -- the eight years of the Bush administration where we saw a net private sector job loss.
REHMAll right. Congressman Van Hollen, explain to us what happens if we go over the cliff.
HOLLENWell, there are two major components to the cliff. One is this increase in taxes across the board, which over a 10-year period amounts to about $5 trillion in taxes. The other piece are these across-the-board indiscriminate cuts to both defense spending and non-defense spending. And...
REHMAre you in favor of seeing us go off the cliff?
HOLLENOh, I'm not in favor of seeing us go off the cliff. I think it would be a really bad thing if we went off the cliff.
REHMDo you think we are likely to go off the cliff?
HOLLENAnd we need to prevent us from going over. But we need to do it in a way that, number one, protects the fragile recovery and boost job growth and shows that we're serious about long-term deficit reduction.
REHMGrover, do you think we're going off the cliff?
NORQUISTI didn't think we necessarily were but Obama's unserious proposal, which is all tax increases, four times anything he even hinted at when he was running for office, I mean, 1.6 trillion. You only get 400 billion by raising the top two rates, quadruple that. Something he'd never talked about during the campaign, he can't even pretend he did. And then no spending -- not only no spending restraint but additional spending, more spending than had been planned.
NORQUISTSo it -- I think he's trying to take us off the cliff and blame other people. I guess, I've -- he spent the last four years, the administration, blaming Bush for everything. At some point, he's got to realized he is the president, he needs to be the president, but he's going to try and blame others for going over the cliff. That's why I want these negotiations on C-SPAN so he can't do that. If we watch, he couldn't do it.
REHMWhat about that, Congressman Van Hollen? Grover Norquist has been talking about this public negotiation. What is your thought on that?
HOLLENWell, as I said to Grover yesterday, it'd be good if Speaker Boehner actually put his plan on paper, like the president has, so the public can see exactly what it is.
REHMWhat about that, Grover?
NORQUISTThe Republicans in the Congress should not only put something down, they passed the Ryan plan, which is a real budget with real reform that actually got votes. The president's budget has won that every single Democrat voted against and every single Democrat and the Senate voted against. It's not serious.
HOLLENActually, that's a Republican talking point is not true. We had a Democratic budget alternative that mirrored the -- in many ways the president's budget (unintelligible)...
NORQUISTDid you vote against the president's budget, sir? Yes or no.
HOLLENBut listen, Diane, again, the president has now put this on paper. If what Grover is saying is that the Boehner plan for the fiscal cliff is simply the old Republican budget that Mitt Romney and others ran on, he should say that. He has not said that. He has talked about additional revenues. He has not put anything on paper as how he would achieve those revenues...
HOLLEN...partly, frankly, because that would drive this wedge within the Republicans between those who say they're going to stick with the pledge, which says you cannot raise one additional penny of revenue for the purpose of deficit reduction from closing loopholes or ending tax breaks and others. But if he finally put something on paper, as the president has, then maybe we can move forward.
REHMAll right. To Worcester, Mass. Good morning, Cynthia.
CYNTHIAOh, good morning, Diane. I love your show. Thank you so much for having us.
CYNTHIAI have two statements. The first of which is Mr. Norquist keeps on referring to the Reagan administration and how the Reagan administration asked for his analysis. The Reagan administration started in a long time ago. I was born in 1981. The Reagan administration does not represent the American people anymore. I wasn't even aware politically when the Reagan administration was in place. And I vote now. I'm 31 years old. The second statement is about the "entitlements reform" that he's asking for.
CYNTHIAWe don't discuss what "entitlements" will be cut. I seriously doubt Mr. Norquist has any concept of what it's like to decide whether he's going to purchase health insurance for his employer because whether he'll have enough take home pay to feed his children. I don't think that he knows what it's like to have the decision between prescription drugs and groceries as I've seen people do directly in front of me as a pharmacy technician.
CYNTHIAAnd I really don't think he has any idea what it's like to be unemployed at no fault of his own. A couple years ago, my fiancé, who has a master's degree, and myself had -- and we had $15 a week budget for...
REHMWow, Cynthia, thank you for calling. And you're listening to "The Diane Rehm Show." Grover, do you want to respond?
NORQUISTSure. I think it's very important that we have a government that doesn't do damage to exactly the people in the situation she was talking about. And, again, 11.5 million people are out of work today because we took the wrong path in dealing with Fannie Mae and Freddie Mac's collapse. And we need to have lower taxes, less regulations. Look, going ahead, the next four years are going to be very, very ugly. Why?
NORQUISTBecause all of the bits of Obamacare that the administration didn't want to talk about, didn't come into being until after the election, the trillion dollar tax increases, the taking away your health savings accounts, inflexible savings accounts that a lot of special needs parents have and use, and they're going to be taxed so that they can't be used in the same way anymore. These are very unpleasant parts of Obamacare, and they were delayed.
NORQUISTWe're not going to hit those. All the regulations you're hearing about, you know, pizza places will have to put all 43 -- 34 million different kinds of topping choices, the calories for each one on the walls of the pizza place. This is a new rule that just came out with...
REHMWhat's that's got to do with taxes, Grover?
NORQUISTBecause -- oh, it's not just taxes. The regulatory burdens coming down the pike in the second term, all that were delayed conveniently from the first term -- this economy is being hit with a body blow of regulatory costs as -- which is 10 percent of the earnings of pizza places is going to go into doing this nonsense stuff.
NORQUISTThat's a regulation.
REHMChris, do you want to go ahead and comment, Congress Van Hollen?
HOLLENYeah. First of all, a lot very important parts of Obamacare, the Affordable Care Act are going to be kicking in, including these exchanges, supermarkets where people can purchase affordable health insurance. And as part of that, people -- a lot of people, depending on income, will be able to access tax credits to help finally purchase affordable health care. That's number one. Number two, Grover talks about all these new revenues.
HOLLENThe greatest single source of the additional revenues coming in under the Affordable Care Act are from higher income individuals, families over $250,000, who will be paying about 3.7 percent additional on their capital gains and about 1 percent more on their payroll taxes. So that is where the bulk of the revenue is coming in.
HOLLENIn addition to that, of course, there were savings achieved by ending the overpayments through private insurance companies in the Medicare system that had been overly subsidized to the tune of about 114 percent compared the fee-for-service. So a lot of these claims about all these terrible taxes coming down the road from Obamacare are just -- are not the case.
REHMGrover, I'm going to give you...
HOLLEN(unintelligible) higher-income for some, but there are also important tax credits that will make health care more affordable.
REHMAll right. Last word, Grover Norquist. Very briefly, please.
NORQUISTTwenty billion tax increase on medical devices -- if you need a wheelchair in a hospital, if you have a stent in your heart, they're taxing it. The flexible savings account, the taxes are going to make your insurance not available to you. Take a look at it. Talk to your doctor. There's a lot of very ugly stuff coming.
REHMGrover Norquist, he is president of Americans for Tax Reform. Congressman Chris Van Hollen, he represents Maryland's 8th District. He is the top Democrat on the House Budget Committee. Thank you both so much.
NORQUISTThank you for having us.
REHMAnd thanks for listening, all. I'm Diane Rehm.
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