US Politics Analysis: Explaining the Fiscal Cliff and the Battle Over the "Taxpayer Protection Pledge"

A favourite lament of the US conservative heartland is that the country's national media is dominated by liberals. This bias in favour of the Democratic viewpoint, they argue, overtakes any objective understanding of the issues.

It is a charge that reverberated through the conservative blogosphere during the recent Presidential elections –-- many conservatives asserted that a major factor in the defeat of Mitt Romney was that a sycophantic press failed to skewer President Obama for the failures of his first term --- and it is an accusation that is again resurfacing as America heads toward the fiscal cliff.

The current media narrative to which conservatives object is the burgeoning campaign minimising the importance of the Republican Party's commitment to veto any increase in tax rates. In the last few days, the narrative has questioned the validity of the Americans for Tax Reform pledge, which many Republican politicians signed.

The Taxpayer Protection Pledge has been around for a while. It began in the mid-1980s when Ronald Reagan asked Grover Norquist to head ATR --- an organisation formed to support the President's tax reform policies in his second term --- and Norquist came up with the Pledge to get candidates to declare their position in the 1986 mid-term elections.

The Pledge promises the candidate will:

ONE, oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses; and

TWO, oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.

The ATR notes that, "as a result of [Reagan's Tax Reform] Act, the top individual income tax rate fell from 50 percent to 28 percent".

The Pledge is not an integral part of the recent Tea Party surge within the Republican Party. Instead, it is grounded in two moments in history, sure to get more attention as the fiscal cliff talks intensify.

In 1982, and again in 1990, America's fiscal health was in crisis. In both cases a bipartisan "Grand Bargain" was reached where Democrats promised spending cuts in return for revenue increases. But on both occasions, ATR maintains, the tax hikes were fully implemented while not a penny of the spending cuts ever materialised. In a stern warning to those politicians currently considering violation of their Pledge in an attempt to reach another "Grand Bargain", ATR notes that in 1990:

34 House Republicans broke their own Taxpayer Protection Pledges and went along with this one-sided "deal". As a result, Republicans lost 8 seats in the 1990 Congressional midterms, and President Bush only received 38% of the vote in the 1992 Presidential election.

So why is this now a critical moment for The Pledge? In recent days, several leading Republican senators have intimated that they may consider setting it aside for a compromise in the fiscal cliff negotiations. These admissions instigated a frenzy in the media, with concentration on the line that some Republicans were finally prepared to ditch their loyalty to Grover Norquist.

Jena McGregor's "On Leadership" blog in the Washington Post on Monday is a fair example. It begins, “Mutiny! Dissension in the ranks! A break in vows to the almighty Norquist!”, and ends:

As a result, I think Republican leaders who can find a sensible, rational way to defend a break in the pledge stand plenty to gain. After all, their oaths of office were made to their country. They should do what they deem fiscally sound for their constituents, not make decisions based on fear of a bespectacled man who has called Republicans who vote for a tax increase “rat heads in a Coke bottle.

McGregor's conclusion implies that the only “sensible” and “rational” way that Republicans can prove their loyalty to the country is to raise taxes. Conservatives would disagree, as a post at Red State by Daniel Horowitz demonstrates why they see the Pledge, and adherence to its principles, as a lesson from failed budget deals of the past:

The last farm bill, which was enacted in 2008, authorized $604 billion in spending. The current House bill proposed by Lucas (HR 6083) authorizes $957 billion in spending extrapolated over 10 years. Yet, this 58% increase is considered a cut in "Washington speak" because the phony CBO baseline, which locks in Obama’s food stamp spending, projects $992 billion in spending. Hence, passage of the farm bill, which locks in the record food stamp spending and creates new farm welfare programs, will be scored as a spending cut --- to the extent that it can be used for the spending cut side of the "grand bargain”.

Horowitz's conclusion explains why conservatives believe the overwhelming media espousal of increased tax revenue misses the point: “When the rubber meets the road at the end of the year, we will wind up with tax increases in exchange for spending increases that are disguised as budget savings. That is why we are so 'intransigent' about raising taxes.”

Republicans are aware that President Obama has momentum on his side for increased tax revenues during the fiscal cliff discussions, but they believe that history and principle are on theirs. Will some of them break the Pledge to ensure that a compromise is reached? That has far more to do with if and how Democrats assure them over spending cuts than it does with media stories about their loyalty to one Grover Norquist.