Washington is always thick with rumors—you can almost see them on the local Doppler. On Thursday afternoon, a rumor surfaced that President Obama and House Speaker John Boehner were close to a deal on raising the debt ceiling. The story was splashed across the home page of the New York Times. The markets appeared to react positively. When White House spokesman Jay Carney said there was no deal, he was then asked about a negative market reaction. Meanwhile, Boehner took to Rush Limbaugh's show to say there wasn't a deal. It was barely past lunch, but this rumor had already gone through three iterations: surfacing, backtrack, denial. And this was the second piece of speculation of the day: The morning had been dominated by talk about whether longtime anti-tax activist Grover Norquist had given House Republicans an opening to reach a deal with the president over tax increases.
It's not just the heat. The atmosphere in Washington is particularly charged at the moment—almost to the point of general madness. Negotiators are working on a deal to avert a shutdown while simultaneously rushing to tamp down rumors about what they may or may not have agreed to. Much of the president's meeting Wednesday with Democratic leaders was spent assuring them that the rumors they had heard about the size of spending cuts were not true.
The closer the Aug. 2 deadline for default, the more frantic all constituencies become. Everyone wants to get a jump on whatever might be in the deal so they can get it taken out. Democrats worry the president will stick them with drastic cuts to government services and entitlements. Republicans worry the speaker is agreeing to tax increases. Both sides worry they'll be presented with a last-minute deal they'll have to support or risk sending the country into economic ruin.
The Norquist controversy that started the day marked a new stage in Norquist's already colorful career. For the last 25 years, Norquist, the president of Americans for Tax Reform, has encouraged Republican candidates to sign a pledge that they won't raise taxes. Some 236 members of the House have signed it. Many people (most of them Democrats) believe that this pledge is all that is blocking a debt limit deal between House Republicans and the White House. No House Republicans dare break the pledge by agreeing to any tax increases, or Norquist will punish them in the next election.
Late Wednesday, a Washington Post editorial said that Norquist had essentially offered to let Republicans off the hook: The pledge, the editorial said, does not require signers to oppose the expiration of the Bush tax in 2012. Obama has been trying to get Republicans to agree to allow those tax cuts to expire in exchange for deep cuts in spending programs. Republicans have refused vehemently. Norquist said allowing these tax cuts to lapse "would not technically violate the pledge." If Republicans agree to let the cuts expire, the Post suggested, it would make a deal much easier and avert the crisis.
Democrats reacted to the editorial only slightly slower than Wendi Deng Murdoch. On Thursday morning White House Communications Director Dan Pfeiffer highlighted the editorial. House Minority Leader Steny Hoyer told reporters it was a major development. Sen. Chuck Schumer issued a press release and spoke about it on the Senate floor. "This is a development the significance of which should not be underestimated. It is a recognition from Norquist that the House Republicans are increasingly isolated, and have painted themselves into a corner. Norquist is trying to signal to the House GOP that their no-compromise position is untenable, deteriorating, and bad for their party and the country."
Here's a good rule of thumb: When the Washington Post editorial board and the Democratic hierarchy agree on their textual analysis of a Republican stalwart, there's a pretty good chance it might not meet laboratory standards for dispassionate assessment. Still, Boehner at his morning news conference was asked two questions about the Norquist remarks. Boehner said he was not going to allow the Bush tax cuts to expire.
What had Norquist actually said? The Post helpfully provided the audio later on Thursday. Norquist was making a narrow point about the language of the pledge. Written 25 years ago, it says that members promise not to vote for a net tax increase. It is silent on supporting legislation to block the expiration of cuts. But just because there is no sign saying you can't shoot your neighbor does not mean that you are free to do so.
The expiration of the Bush tax cuts would mean a marginal tax rate increase, which Republicans believe is the most evil of all tax increases. You may remember the vigor with which Republicans fought Obama over letting these tax cuts expire last year. Norquist was a central combatant.
Reducing marginal rates is the cause for which Norquist was called into this world. As Norquist said in the Post interview, the expiration of the Bush tax cuts would "raise taxes from where they are" and would "be a very bad thing to do." When the Post offered a hypothetical situation of a politician like Mitt Romney using the technicality to support the expiration, Norquist said he would "denounce him as a tax increaser and a bad guy."
This is why all the activity Thursday morning was overheated. It is not realistic to think that a Republican member of Congress—formerly cowed by the Norquist pledge—would use this technicality as an opportunity to leap into newfound bravery. Nor is it realistic to think that he or she would do very well in the face of Norquist's promised denunciations. This kind of strict textual interpretation of the promise may have saved Antonio from losing his pound of flesh, but the laws of politics are a little looser than those of Venice. As Norquist said in the Post interview, "You may get me to say technically you've done x,y, or z, but it doesn't pass the laugh test with the American people."
Norquist's pledge has power because Republicans who vote in primaries and conservative GOP districts don't want their members to vote for tax increases of whatever flavor. As he put it in an interview with me yesterday: "The modern Republican Party is a different party than it was 10 years ago, it was a party that has got kinda slapped and said, 'Hey you, hear us: Spend less.' So those Democrats and moderate Republicans who are hoping for the good old days when Republicans would raise taxes for you are very old, because that happened 20-plus years ago and hasn't happened since."
Norquist shapes and uses that power—but he didn't create it, and he can't suddenly reverse course even if that were his intention (which it's not). If Obama is going to work out a deal with Republicans that wrings some savings out of changing the tax code, he's going to have to convince conservative Republicans that they won't get punished. At the moment that still looks about as easy as convincing people that the weather in Washington is lovely this time of year.
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