GO
Loading...

Grover Norquist: We're Going Over the 'Fiscal Cliff'

Aaron Task
Wednesday, 5 Dec 2012 | 5:42 PM ET

On Wall Street, hope springs eternal for a deal on the "fiscal cliff." At least, that's the reason many cited for Wednesday's rally, which saw the Dow up 122 points to 13,074 in recent trading.

Grover Norquist, president of Americans for Tax Reform, says expectations for a deal anytime soon are likely to prove overly optimistic.

"I didn't think this was case three weeks ago but do now think [President] Obama has decided to drive country over the fiscal cliff and blame the Republicans," Norquist tells me.

Furthermore, Norquist says the consensus view that the public posturing is just "theater" while real progress is happening behind closed doors is simply false.

Related: Politico's Ben White: Get Ready for a Market Rally Because a Fiscal Cliff Deal Is Coming

"I spoke with people today -- not are only there no [private] meetings going on, there are none planned," he says.

Norquist may be the ultimate partisan -- somewhat predictably, he says President Obama is fully to blame to the absence of a deal and that the president "misjudges his mandate [and] political strength" -- but he's also the ultimate (conservative) Washington insider. If a deal's really in the works, you wouldn't know it by the public comments from both President Obama and the Republican leadership in Congress; both sides seem to be digging in their heels.

Related: 71% of Investors Expect to End 2012 With Gains: Report

Speaking before a meeting of the Business Roundtable on Wednesday, President Obama reiterated his position that any deal to resolve the fiscal cliff must include higher taxes on the wealthiest 2% of American households.

"What I put forward in the campaign and what I think a majority of the American people agreed with…is that an approach that says we're going to raise additional revenue particularly from those who have done best in the economy over the last decade, combined with some smart cuts and with entitlement reform that can strengthen our social safety net over the long term but do so in a responsible way," President Obama said. "That's the way to go forward. And that's what we've put forward."

The president also sought to preempt talk that Republicans will agree to a fiscal cliff deal now, including higher tax rates on the top 2%, then use the debt ceiling vote next year to extract additional concessions on spending and/or entitlements.

"If Congress in any way suggests that they're going to tie negotiations to debt ceiling votes and take us to the brink of default once again as part of a budget negotiation…I will not play that game," he said. "Because we've got to break that habit before it starts."

Meanwhile, Republican leaders once again expressed frustration with the president and lack of progress on the talks.

"Where are the discussions? Nothing is going on," Republican Majority Leader Eric Cantor told reporters.

Additionally, Sen. Minority Leader Mitch McConnell said: "Frankly, I thought we would be accomplishing more in the real talks that are going on privately, but I can tell you -- being aware of those -- that there's nothing going on privately that's not going on publicly."

That's consistent with what Norquist says and, if really the case, suggests the conventional wisdom about how Washington "really" works is about to get upended -- once again.

Related: Fiscal Cliff Talks at Stalemate But Markets Still Betting on a Deal

Stay tuned for part two of this interview where Norquist talks more about the politics of the fiscal cliff negotiations and the perception it's hurting Republicans. He says: "Tea party two is going to dwarf tea party one."

Aaron Task is the host of The Daily Ticker and Editor-in-Chief of Yahoo! Finance. You can follow him on Twitter at @aarontask or email him ataltask@yahoo.com