“An Issue Of Fairness”: Suddenly America’s Top Corporate Leaders Are Shunning Tea Party Extremism
Leaders of the American business community, who have long indulged the Republican far right as an instrument toward their own ends, seem to be growing weary of its political excesses. Recognizing the public verdict of last month’s election, corporate officialdom is moving toward moderation on taxes and other issues, showing support for the Obama White House and edging away from congressional Republicans.
The latest top executive to endorse the president’s position on rescinding the Bush tax cuts for the top two percent is Fred Smith, CEO of Federal Express and a former economic advisor to Senator John McCain — who denounced as “mythology” the notion that raising the top rate would damage the U.S. economy.
Smith joined a lengthening queue of business leaders from all sectors who have stepped up over the past week to voice their acceptance of increased taxes as part of a budget agreement to break the stalemate on Capitol Hill — not only to avoid the so-called fiscal cliff on December 31, but because fairness requires the wealthy to pay their fair share. Randall Stephenson, chief executive of AT&T, the nation’s largest telecom company, told Business Week that higher taxes and more revenue must be part of any budget agreement. So did Lloyd Blankfein, the CEO of Goldman Sachs. And so did a group of defense industry executives from companies such as United Technologies, RTI International, TASC and Northrop Grumman.
Income tax rates “need to go up some,” said David Langstaff, the CEO of TASC, at a Washington press event organized by the Aerospace Industries Association, a defense lobby. “This is a fairness issue — there needs to be recognition that we’re not collecting enough revenue. In the last decade we’ve fought two wars without raising taxes. So I think it does need to go up.”
Indeed, the president was warmly received this week when he visited the Business Roundtable, a powerful Washington lobbying group that officially prefers Republican policy on maintaining the Bush tax cuts unchanged. “This room likes a winner,” said Roundtable chairman James McNerney, the CEO of Boeing, as his members applauded the president, who worked the room as if among old friends. They didn’t seem terribly upset when the president told them that tax rates — their tax rates — would have to go up, and in fact, they are reportedly supporting him on the need to avoid another destructive struggle with Congress over the debt ceiling. Evidently they won’t go along with the kind of blackmail game that congressional Republicans played with the debt ceiling in the summer of 2011, leading to a credit downgrade and slower growth for months afterward.
The suddenly sensible sounds emanating from the business community are astonishing when contrasted with the anger displayed toward the president by many of these corporate suits only weeks ago, when they berated Obama as “anti-business” and loudly yearned for a corporate-style Romney presidency. Resoundingly rebuked by the electorate, which overwhelmingly favors Obama’s positions on taxes and entitlements — and stands ready to blame the Republicans if no budget agreement is achieved — the business leaders are backing ever so subtly away from their traditional alliance with the GOP.
These brand-conscious executives suddenly have realized that the Republican brand, especially at the congressional level, is politically toxic. And they would rather not be too closely identified with it at this dangerous moment.
Remarkably, the Tea Party Republicans have now alienated their party’s most important constituency — the upper echelon of the business community. It is a profound irony that the issue raising friction between these politicians and their erstwhile backers is a fanatical partisan determination to defend the tax benefits enjoyed by those same wealthy executives.
The president’s opponents are backing themselves into a corner where even their own old friends cannot defend them. Meanwhile Obama may finally have learned that if he stands firm and refuses to negotiate with himself, he can win over public opinion and break the partisan obstructionism.
By: Joe Conason, The National Memo, December 7, 2012
“GOP Fiscal Maneuvers”: Republicans Are More Preoccupied Now With The Optics Of “Not Surrendering”
So there are two pieces of news out today about the Republican response to the president’s so-far-very-successful maneuvers on the big fiscal issues. The first is a formal counter-offer from the House GOP leadership (with, significantly, Eric Cantor’s and Paul Ryan’s names joining that of John Boehner). It specifically calls for $800 billion in new revenues (close to what Boehner put on the table in his repudiated 2011 debt limit deal), but without rate increases. And it bites the bullet somewhat on spending by calling for a 2-year increase in the Medicare eligibiity age and a government-wide adjustment in how cost of living adjustments are calculated.
You could read this as Republicans deciding to get more specific on “entitlement reform” than on taxes (it’s extremely unlikely that you can come up with $800 billion in “loopholes” to close without hitting the middle class), or simply choosing the least inflammatory ways to reduce entitlement spending. Or–and this is my personal take at the moment–it could just be an offer meant to be refused that just gets the GOP out of the immediate problem it had with appearing unwilling to put anything on the table.
Arriving just before the “counter-offer” were a host of less formal reports that Republicans have a fallback strategy of letting an extension of the Bush tax cuts for taxable income under 250k pass without their votes, and then fighting Democrats tooth and nail after the beginning of the new year on the debt limit increase or indeed, anything else Obama wants.
I share Jonathan Chait’s puzzlement over this supposed strategy:
[Y]eah, Republicans would still have things to fight over. Obama is going to want measures to reduce unemployment. Republicans can dangle those. Obama is also going to want to not destroy the credit rating of the U.S. government for no good reason, and Republicans will threaten to do that, though it’s not clear that Obama is going to submit to another blackmailing on this.
But Republicans will also need Obama to sign a law canceling out the huge defense spending cuts scheduled for next year. If Obama is starting out with a trillion in higher revenue in his pocket (through expiration of the Bush tax cuts on the rich), and the extension of the middle-class tax cuts have largely taken the threat of a recession off the table, then he’ll still be negotiating from a position of strength. He’ll be able to offer Republicans cuts to entitlement programs plus defense spending increases in return for modest revenue increases, which don’t have to involve rate hikes, just to get to his own budget proposal.
Chait’s hunch is that Republicans are more preoccupied now with the optics of “not surrendering” on big fiscal votes than they are with actually imposing their priorities on Obama and the country. In other words, both maneuvers may be aimed at cutting losses without provoking an overt conservative backlash, and keeping–as Grover Norquist has suggested–their “fingerprints off the murder weapon” of any deal that can be described as betraying the sacrosanct “conservative principles.”
If that’s all true, it’s a strange way of exercising what Republicans claim is their co-responsibility for solving the nation’s fiscal problems after a “status quo election.” One might even reach the conclusion they lost.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, December 3, 2012
“Flabbergasted Or Intoxicated?: John Boehner Says There’s No Difference Between Raising Revenue From Middle Class Or Wealthy
In an appearance on Fox News Sunday, House Speaker John Boehner told host Chris Wallace that it doesn’t make a difference whether new revenue in a deal to avert the fiscal cliff comes from the middle class or from the wealthiest Americans.
Boehner, who said that he was “flabbergasted” by the White House’s opening offer (despite the fact that it’s exactly what President Obama campaigned on), blasted the president as “not serious” for demanding an increase in tax rates on the wealthiest earners.
When Wallace asked if Obama has a mandate on the issue — given that raising taxes on the wealthy was arguably the central issue dividing the president and Mitt Romney in the presidential election — Boehner argued that it doesn’t matter whether new revenue comes from the wealthy or the middle class.
Listen, what is this difference where the money comes from? We put $800 billion worth of revenue, which is what he is asking for, out of eliminating the top two tax rates. But, here’s the problem, Chris, when you go and increase tax rates, you make it more difficult for our economy to grow, after that income, the small business income, it is going to get taxed at a higher rate and as a result we’re gonna see slower economic growth, we can’t cut our way out of this problem, nor can we grow our way out of the problem, we have to have a balanced approach and what the president wants to do will slow our economy at a time when he says he wants the economy to grow and create jobs.
Boehner is wrong on two points. First, there is no reason to believe that restoring Clinton-era tax rates on incomes over $250,000 will prevent the economy from growing; on the contrary, rate increases on the wealthy in 1992 and 1994 were followed by a tremendous economic boom. Second, it clearly matters where the revenue comes from; as Boehner and the Republicans’ own rhetoric acknowledges, the middle class needs fiscal relief — not an increased burden.
The full interview between Boehner and Wallace can be seen here; the exchange on tax rates begins at the 5:33 mark.
Perhaps Boehner doesn’t care where new revenue comes from because he hasn’t yet figured it out. When Wallace pressed Boehner to name specific loopholes and deductions that he’d be willing to eliminate in order to make up the revenue lost by extending the Bush tax cuts for the wealthy, Boehner declined — as Romney and Paul Ryan did repeatedly during the campaign – telling Wallace, “I’m not going to debate this or negotiate this with you.”
By: Henry Decker, The National Memo, December 3, 2012
“An Effective Ad Man”: Democrats Could Use Their Own Grover Norquist
Here’s the first lesson from the early skirmishing over ways to avoid the fiscal cliff: Democrats and liberals have to stop elevating Grover Norquist, the anti-government crusader who wields his no-tax pledge as a nuclear weapon, into the role of a political Superman.
Pretending that Norquist is more powerful than he is allows Republicans to win acclaim they haven’t earned yet. Without making a single substantive concession, they get loads of praise just for saying they are willing to ignore those old pledges to Grover. You can give him props as a public relations genius. Like Ke$ha or Beyonce, he is widely known in Washington by only one name. But kudos for an openness to compromise should be reserved for Republicans who put forward concrete proposals to raise taxes.
The corollary is that progressives should be unafraid to draw their own red lines. If you doubt that this is a good idea, just look at how effective Norquist has been. Outside pressure from both sides is essential for a balanced deal.
Start by insisting that Social Security and any increase in the retirement age be kept off the table. President Obama’s bargaining hand will be strengthened further if he can tell Republicans that there just aren’t Democratic votes for steep cuts in Medicaid and Medicare. The president’s room for maneuver expands still more if liberals refuse to look at cuts in programs unless Republicans are prepared to raise tax rates on the wealthy.
Already, there are signs that Republicans realize how much leverage the president has. If Congress doesn’t act, all the Bush tax cuts expire at the end of the year. At that point, the Senate’s Democratic majority has the power to block (or Obama can veto) any restoration of the upper-end Bush tax rates.
One indication that Republicans are aware they’re boxed in came from Rep. Tom Cole (R-Okla.), one of his party’s shrewdest political minds. He suggested that Republicans should take up the president’s invitation to extend the Bush tax cuts for the 98 percent of Americans who earn less than $250,000 a year. Yes, this would amount to throwing in the towel on those upper-bracket levies. But Cole knows that it won’t help the Republican brand if voters come to see the GOP’s one and only objective as protecting wealthier Americans from tax increases.
The next lesson is not about politics or PR. It’s about substance, and this is where the Washington establishment has to get serious. The simple fact is that it’s bunk to claim that “tax reform” alone can produce the revenue we need.
One of the great disservices of the Bowles-Simpson commission was that it fed the impression that tax reform could generate so much cash that it would permit a cut in tax rates.
Grant Erskine Bowles and Alan Simpson credit for good intentions — they were desperate to find a way to get Republicans on their commission to acknowledge the need for new revenue. It’s also worth remembering that their proposal assumed the expiration of the Bush tax cuts for those earning more than $250,000 a year. Nonetheless, their stress on tax reform with lower rates was more a political deal than wise policy. They sent us down the wrong path.
The only way tax reform might raise enough money to prevent a rate increase, let alone create an opportunity for rate cuts, is to reduce popular deductions (like the one on mortgage interest) so deeply that middle-class Americans would get a tax increase, too. And eliminating or sharply undercutting the deduction for state and local taxes is a bad idea. This only penalizes higher-tax states that try to solve their own social problems — for example, by providing health insurance to their low-income residents.
And all the schemes to eliminate tax expenditures to avoid rate increases have the effect of protecting just one group: Americans with very high incomes. That’s how the math works.
The right thing is to bring back Bill Clinton’s tax rates on the well-off and then have a broad tax reform discussion next year. A similar logic applies to health-care programs, as Jonathan Cohn suggested in the New Republic. Before making big cuts in Medicaid and Medicare, we need to see whether the reforms in the Affordable Care Act can contain medical inflation.
The fiscal cliff creates an enormous opportunity to end an era in which it was never, ever permissible to raise taxes. In the pre-Grover days, conservatives believed passionately in pay-as-you-go government. A tough stand by progressives will make it easier for conservatives to return to the path of fiscal responsibility.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, November 28, 2012
“Putting The Nails In The Coffin”: Has Grover Norquist And His Anti-Tax Pledge Reached The End Of The Road?
Yet another prominent Republican has added his name to the list of those for whom the allure of the Grover Norquist “Taxpayer Protection Pledge” has lost its luster.
Senator Saxby Chambliss (R-GA) has announced that he will no longer honor his commitment to the Norquist pledge wherein he promised not to raise taxes under any circumstances whatsoever. Appearing on a local Georgia television program, Chambliss said, “I care more about my country than I do about a 20-year-old pledge. If we do it his way then we’ll continue in debt, and I just have a disagreement with him about that.”
While Chambliss expects Norquist to push back on his defection by supporting a primary challenge to Senator Chambliss when he stands for re-election in 2014, Chambliss has decided to take his chances, noting, “But I don’t worry about that because I care too much about my country. I care a lot more about it than I do Grover Norquist.”
While Saxby Chambliss’ sentiment is admirable, is it possible that he has done the math and concluded that the Norquist modus operandi of going after any Republican that dare defy him just doesn’t pack the punch it once possessed?
Judging from the 2012 election results, there is reason to believe that Grover Norquist’s days of bullying candidates into doing his bidding may be a thing of the past.
Going into the elections, 279 Congressional incumbents—along with 286 challengers—had signed the anti-tax pledge. However, at a time when the polls point to an overwhelming number of Americans favoring a rise in the tax rates for the nation’s very wealthiest, some 57 Republican House incumbents or challengers who signed the pledge went down to defeat while 24 GOP sitting Senators or those seeking a seat lost in their race.
Included among the high profile, pledge-signing losers were Senator Scott Brown (R-MA), former Wisconsin Governor and cabinet member Tommy Thompson (R-WI) and two-time loser Linda McMahon (R-CT). Over in the House, long time Congressmen Dan Lungren got beat after a constituent publically challenged him for signing the pledge while two GOP incumbents who had received direct funding from Norquist’s organization, Americans For Tax Reform, in an effort to save their seats, were unsuccessful.
Meanwhile, GOP Senate leaders such as Bob Corker (R-TN), John McCain (R-AZ) and Tom Coburn (R-OK), have become more vocal in their opposition to Grover Norquist and his tactics as has leading conservative voice, Bill Kristol.
Adding what might be the final nail in the coffin for Mr. Norquist’s brand of political blackmail is the fact that the likely GOP frontrunner for the party’s presidential nomination in 2016, Gov. Jeb Bush—while highly supportive of keeping taxes low—has steadfastly refused to sign the tax pledge saying, “I don’t believe you outsource your convictions and principles to people.” The younger Bush follows in the footsteps of his father, President George H.W. Bush, who earlier this year made his own feelings completely clear when he remarked, “The rigidity of those pledges is something I don’t like. The circumstances change and you can’t be wedded to some formula by Grover Norquist. It’s – who the hell is Grover Norquist, anyway?”
Good question—who the hell is Grover Norquist, anyway?
While he has managed to become more famous than most, at the end of the day, Grover Norquist is a lobbyist.
In fact, according to Jack Abramoff—the disgraced lobbyist who went to jail after entering a guilty plea to three criminal felonies involving defrauding American Indian tribes and corrupting public officials—Mr. Norquist’s organization served as a conduit for funds that flowed from Abramoff’s clients to surreptitiously finance grass-roots lobbying campaigns.
The Washington Post reports,
“The federal probe has brought a string of bribery-related charges and plea deals. The possible misuse of tax-exempt groups is also receiving investigators’ attention, sources familiar with the matter said. Among the organizations used by Abramoff was Norquist’s Americans for Tax Reform. According to an investigative report on Abramoff’s lobbying released last week by the Senate Indian Affairs Committee, Americans for Tax Reform served as a “conduit” for funds that flowed from Abramoff’s clients to surreptitiously finance grass-roots lobbying campaigns. As the money passed through, Norquist’s organization kept a small cut, e-mails show. A second group Norquist was involved with, the Council of Republicans for Environmental Advocacy, received about $500,000 in Abramoff client funds…”
Mr. Norquist has denied any wrongdoing in the Abramoff matter and neither he nor his organization(s) have ever been charged for any offense related to the same.
With Saxby Chambliss’s new found independence and willingness to once again exercise his own judgment and regain control of his own vote when it comes to tax matters, expect other legislators—on both the federal and state level—to now join in.
The Norquist era has come and gone—and thank Heaven for that.
Whether you support tax increases for some or detest the very notion of anything short of a decrease in taxes, we elect leaders to think for themselves and to serve the needs of their constituents. Unless you are an elected official from a district that Grover Norquist calls home, Mr. Norquist, and his Americans For Tax Reform, are not a constituency—they are a special interest lobby.
The time has come for a little GOP courage. While Mr. Norquist may have been able to impose his will on Republican incumbents who fear a primary challenge from the right courtesy of Grover Norquist, the reality is that there are only so many such challenges Mr. Norquist can afford to mount. Therefore, the more GOP elected officials who reject the notion of handing over their vote to the likes of Grover Norquist, the lower the odds that these politicians will pay the price for their defection come election season.
The clock on Grover Norquist’s fifteen minutes of fame has expired—and the sooner Republican incumbents and candidates figure this out, the sooner they will be able to impress the voters with their willingness to think for themselves and for their constituencies rather than turning control over to a lobbyist.
How can that possibly be a bad thing?
By: Rick Ungar, Op-Ed Contributor, Forbes, November 23, 2012
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