In 1990, President George H. W. Bush, faced with an enormous budget deficit, made a deal with Congressional Democrats. He would sign on to a small, hike in the top marginal tax rate, from 28% to 31%, in return for which they would agree to a large package of spending cuts. The deal squeezed through Congress, but conservatives revolted, denouncing Bush's plan as a sellout. Over the 20 years that have passed since, opposition to deals like this has been the lodestar of the conservative movement and the Republican Party. Dissent is permitted on all other issues, but not on taxes. Since Bush's budget deal, not a single Republican member of Congress has agreed to raise taxes. It has been a stunning triumph of ideological discipline.
The funny thing is, Bush's deal worked. So did Bill Clinton's deficit reduction package three years later, which was structured along similar lines and overcame even more hysterical opposition from the right. It not only worked as intended, it represented possibly the single greatest triumph of domestic conservative policymaking of the postwar era. Look at this chart. Starting in 1990, federal spending fell from 22% of the economy to 18%:
Revenues rose from 17% of GDP to 21%. Now, a good chunk of that change represented temporary cyclical factors. Even still, it was a huge triumph of both responsible fiscal policy and for conservatism.
But conservative dogma continues to portray such deals as anathema. Indeed, conservatives cannot concede that they actually worked.
Grover Norquist, president of Americans for Tax Reform, said Wednesday that a deal for both new taxes and spending cuts -- as Voinovich and other commission supporters have envisioned -- wouldn't work, just like in the past. Budget deals under President Ronald Reagan and President George H.W. Bush that sought to raise taxes and cut spending paved the way for more spending and more debt, Norquist said.
"At some point conversations about unicorns are tedious, because they don't exist in the real world," Norquist told The Hill. "Budget deals where they actually restrain spending and raise taxes are unicorns."
Norquist said the focus needs to be on spending cuts alone.
This is madness. First of all, it's just totally false. Second, to say that you'll only permit deficit reduction through spending cuts is to say you don't care about reducing deficits. Republicans can't reduce the deficit through large spending cuts alone, because most spending is highly popular and Democrats would savage them for it. The only way to cut spending is to enlist Democrats in a deal that combines spending cuts with tax cuts. I've said this before, but I continue to be amazed at the failure of conservatives to grasp their own ideological self-interest.