New York Times Washington bureau chief David Leonhardt appeared on The Diane Rehm Show on NPR Friday and purveyed Washington's conventional wisdom about how Republicans were losing the battle of the "fiscal cliff." Leonhardt also foresaw "the end of the great era of American tax cutting."
After Laura Meckler of the Wall Street Journal brought up Republican Rep. Tom Cole taking Obama's position, Leonhardt responded: "And that is a very big deal because while the fiscal cliff talks at most have been happening behind the scenes, what President Obama has talked about the most in public is pushing Congress to vote on this extension of the Bush-era tax rates for, he says, 98 percent of the American people. The fact that Tom Cole is a powerful Republican in the House, has said, yeah, let's go ahead with that and then deal with the top 2 percent later. It would be a big victory for President Obama and something that I think many Democrats and outside observers did not expect him to get quite as easily is it looks like it might be on the verge of happening."
Host Rehm asked some 16 minutes in: "And just to let our listeners know, Grover Norquist will be a guest here on this program on Monday. How much of a backlash is he likely to generate against those who step away from the pledge?"
Leonhardt: "Oh, he will certainly try to generate a backlash against them. He's been very clear about that. I think the real question here is, are we at the end of the great era of American tax cutting? We in The New York Times today have a big project where we looked at total tax rates, federal, state and local. And what we discovered is that for the vast majority of Americans, nearly all affluent people, nearly all middle-class people, not all poor people – people are paying considerably less in overall taxes than they were, not only in 1980 but even after the initial Reagan tax cuts. We've had basically 30 years of mostly tax cutting. That's a big reason why we have a deficit, right? Democrats have won on spending. We've increased spending. Republicans have won on taxes. We've lowered taxes. We're left with a deficit. And I think the question is. are we at the end of that era? And the fact that we're seeing Tom Cole and some of this discomfort with the Grover no-new-taxes stuff raises the possibility that, in fact, Americans are going to side, you know what, I like low taxes, but I'm not willing to trade getting rid of the safety net, getting rid of Medicare, as we know it, for lower taxes."
In response to a caller about 43 minutes in who declared "at some point, the middle class is going to pay," Leonhardt suggested the rich had had quite enough tax cuts for now and that everyone must eventually pay more in taxes: "I agree. At some point, the middle class is going to have to pay more. You can't solve the long-term deficit just with tax increases on the affluent. I think that if you look at the trends of the last 30 years, taxes are falling, by far the most on upper-income people, by far. And so there is an argument that you start there. That's the argument that the White House is making. I think one of the really interesting questions here is is Obama willing to go over the cliff? And we were talking at the beginning of the show is how the -- about how the election had affected this debate. And I think it's possible that the biggest way it will ultimately affect the debate is Obama will be willing to go off the cliff because he doesn't have to run for office ever again. And going off the cliff means you have all the tax cuts go away. It is wonderful for the deficit. It does -- it almost eliminates the medium-term deficit. It doesn't deal with the long-term health care cost, Medicare deficit."
