No on taxes = yes on deficits

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Lawrence O’Donnell had a good interview last night with Grover Norquist emphasizing the role Norquist’s anti-tax pledge — which the vast majority of elected Republicans have signed — plays in keeping the GOP from acting responsibly on taxes. By coincidence, I’d just read William Gale’s thorough demolition (pdf) of the fantasy that the pledge does anything to restrict the size of government, and it’s worth summarizing a few of his points. Note that this was written in 2004, so when Gale mentions the Medicare bill, he means the Medicare Prescription Drug Benefit.

— “Since 1981, periods when tax revenues fall (relative to GDP) have been periods when federal outlays rise.” In other words, tax cuts and spending increases tend to happen simultaneously. Fiscal irresponsibility begets fiscal irresponsibility, which is much as you’d expect: if you sever the connection between taxes and spending, you make spending appear free.

— But perhaps the pledge signers are being fiscally responsible while the rest of Congress is foiling their efforts to cut spending? Nope. “Six out of every seven signers voted in favor of the Medicare prescription drug bill last fall, the largest entitlement increase in decades. About 80 percent of pledge signers who voted on all of the bills supported all of the recent tax cuts, two proposals to make them permanent, and the medicare bill. Most of these bills were strongly opposed by non-signers. Besides supporting the medicare bill, pledge signers also favored the farm bill in 2001 by a margin of 3:1. Even after three years of falling revenues and increasing spending, three quarters of the signers who voted supported the recent, pork-laden highway bill in the House.”

— Oddly, the pledge is written such that user fees and certain forms of taxes don’t actually appear to violate its terms. “Although carefully worded, the Pledge...says nothing to oppose increases in payroll tax rates and other existing nonincome taxes, and it says nothing forbidding the creation of new taxes on, say, consumption, energy, wealth, or inheritances. It would also allow new federal taxes — even income taxes — to be imposed on non-profits and state and local governments.”

The basic point that Gale makes is that the pledge mostly amplifies periods of fiscal irresponsibility. When Congress is feeling punchy, tax cuts and deficit spending are two great tastes that go great together, and similarly, when the punch bowl gets taken away, tax hikes and spending cuts are two bitter pills that tend to get taken at once. I think it’s entirely possible that Norquist’s pledge is effective at limiting the eventual size of the tax increases, but I also think it’s possible that it ultimately makes the government larger by making it easier for Republicans to deficit spend.

Related: My March interview with Grover Norquist.