By George W. Liebmann
6:00 AM EST, December 19, 2011
For the last 20 years, the charming Grover Norquist has been perhaps the most successful of American political entrepreneurs, having used a letterhead and small office to secure "no tax" pledges from a near-majority of Congress members and myriads of state legislators, and holding well-intended Wednesday meetings to spread the gospel. He would not be distressed to be credited with a Leninist capacity for political organization.
He has, to a large extent — as demonstrated by the supercommittee debacle — been successful. Tax rate increases, unless well disguised, are now anathema to congressional Republicans. Moreover, remarkably enough, the Senate filibuster is now threatened to be applied to revenue bills, creating a situation much like that existing when the British House of Lords vetoed Lloyd George's 1911 budget, creating a condition virtually resembling civil war.
The battle royal over the debt ceiling also owes something to his influence. Debt until recently was of no concern to Mr. Norquist. Indeed, as two separate writers for the Cato Review demonstrated last year, Mr. Norquist's efforts have not, to use one of his favorite phrases, "starved the beast" of government. On the contrary, they have bloated it; the beast now suffers from acute gastric pains. Nothing is more delightful for legislators than voting for appropriations without having to vote for concurrent tax increases. The "Norquist moratorium" on taxes, even future ones, has fueled zeal to appropriate; witness the "stimulus package."
Mr. Norquist is of course right to inspire legislative scrutiny of taxation. Similarly, the Republicans' belated insistence on scrutiny of debt is also not misplaced. If the American Revolution was in part inspired by George III's taxes, that of the French had some roots in Louis XVI's borrowing. (It is ironic, however, that the spending cuts this has so far induced have fallen on federal functions that writers on federalism like Madison and Mill considered the most desirable and legitimate — those directed at imparting knowledge to the citizenry and lower levels of government, such things as the National Institutes of Health and National Science Foundation research grants, the National Endowments for Arts and Humanities, the Corporation for Public Broadcasting and the like.)
But while "discretionary" spending has been curtailed, the Obama administration, through various under-the-radar administrative and rules changes, has exploded spending on entitlements: Social Security disability, unemployment insurance, food stamps and welfare. The eventual financial and moral costs of the tendencies Mr. Norquist and his friends have acquiesced in are not inconsiderable.
At the state level, Norquistism has not been quite as successful, but much effort has gone into constitutional initiatives designed to require super-majorities for tax increases. The fruits of these are seen in California's fiscal crisis, which finds its roots in the repudiation by "liberals" and "conservatives" alike of both respect for localism and respect for majority rule. As Professor William Fischel of Dartmouth has demonstrated, the great "liberal" victory in Serrano v. Priest, mandating equal educational spending, led inexorably to Proposition 13's restrictions on local taxes, the depletion of the state fisc with the aid of tax limitations, and the ruin of California's once-distinguished school and college systems
Norquistism, allied with the Ronald Reagan and George W. Bush administrations' lack of concern with spending and deficits, led to our present economic discontent. Tax limitation does not "starve the beast" if spending and borrowing are expanding it. Worse still, as Professor Martin Daunton of Cambridge has demonstrated, tax phobia impairs the ability of governments to borrow at reasonable rates. Britain, throughout most of its modern history, has carried debts that are huge in relation to national income without impairment of its ability to sell bonds. This is due to the willingness of chancellors and parliaments to raise taxes where necessary. When that becomes questioned, credit downgradings and enhanced borrowing costs swiftly follow.
At the state level, the acolytes of Mr. Norquist and Arthur Laffer have been somewhat constrained by balanced budget requirements and limitations on state debt. But a way has been found around these. Spending has been enhanced by swelling pensions and employee retirement benefits, which do not immediately impact current budgets. Restrictions on state debt have been evaded through revenue bond financing, the revenues pledged no longer being third-party payments but future general fund appropriations. The most spectacular demonstration of this was the sale and leaseback of the Arizona state capitol, by a Republican administration, but the Democrats are not far behind. The chairman of the Democratic Governors' Association, Martin O'Malley, has successively proposed to finance a state transportation headquarters building, a state health laboratory and a state office complex through revenue bond issuances supported by pledges of extravagant future rent payments from the state general fund.
Mr. Norquist is indeed a talented pied piper. But he needs either to cease playing his music or to broaden his musical repertoire.
George W. Liebmann, a Baltimore lawyer, is the volunteer executive director of the Calvert Institute for Policy Research and the author of "Neighborhood Futures," His email is firstname.lastname@example.org.
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