It will go down as one of the most famous broken promises in political history. In 1988, George H.W. Bush stood before delegates to the Republican National Convention and vowed: “Read my lips: no new taxes.”
Bush, who died Friday night at 94, had been trailing opponent Michael Dukakis by as much as 17 points. He made the pledge as part of his effort to draw a contrast with an opponent he wanted to define as a Massachusetts tax and spend liberal. It worked and helped him win in a landslide.
But then, in 1990, under pressure to strike a budget deal with the Democratic-controlled Congress, Bush relented and agreed to hike taxes.
American politics and policy has never been the same.
The sense of betrayal aided Newt Gingrich’s rise to power. As the number two Republican in the House minority at the time, he broke with Bush and led a rebellion against the budget deal. Though the deal ended up passing anyway, his opposition helped rally conservatives behind him, and it fueled his eventual ascent to the speakership when Republicans took control of the House four years later.
Bush, meanwhile, was dogged by the broken pledge during his 1992 reelection campaign, both in the primary against Pat Buchanan and in the general election, in which Bill Clinton used the issue to effectively muddy the waters on the honesty question.
In the wake of the election, conservatives such as Rush Limbaugh and anti-tax crusader Grover Norquist made the case that the broken tax pledge cost Bush the presidency. Fair or not, the belief that Bush was politically devastated as a result of the broken promise on taxes was seared into the Republican consciousness.
Americans for Tax Reform, the group led by Norquist, asks Republican candidates at all levels of government to sign a pledge opposing any increases in marginal tax rates or eliminations of deductions unless offset by equal reductions in tax rates. Republicans eagerly sign it, and once in office, are spooked at the idea of making the same mistake as Bush.
When Republicans retook Congress in 1994, the incoming freshman class, whose political attitudes were shaped by the betrayal of 1990, entered Congress with a much more uncompromising attitude toward Democrats, which led to high-stakes budget standoffs and ultimately several government shutdowns.
As president, George W. Bush internalized the lesson of his father’s failures and was committed to being a significant tax-cutter, even as he expanded entitlements and launched two wars in the wake of the Sept. 11 attacks.
The ghost of the broken “no new taxes” pledge also hovered over the Obama administration. When Republicans took control of the House in 2011 committed (at the time) to debt reduction, there was no support among Republicans for a “grand bargain” with President Obama that would involve any increases to taxes. Rep. Paul Ryan’s budgets all called for putting the nation on a sustainable fiscal trajectory by slowing the growth of spending while maintaining taxes at historic levels.
Norquist and other conservative opponents of tax increases regularly invoked the memory of 1990 to warn against any sort of deal involving higher taxes. The short version of the argument is: Bush broke his pledge, and he lost, because if voters want somebody to raise taxes, they’ll vote for Democrats. In more colorful language, Norquist has said, “Republican elected officials who vote for tax increases are rat heads in the Coke bottle. They damage the brand for everybody else.”
President Trump clearly got the message. At an earlier point in his political career, he advocated tax increases. But as a Republican president, he was eager to follow through on his pledge to cut taxes, especially after Republicans were unable to repeal Obamacare.
Policywise, the aftermath of the 1990 budget deal also convinced Republicans that if they trade tax hikes in exchange for promised spending cuts, that the tax increases will go into effect, but the spending cuts will never be realized.
Following the 1990 budget deal, taxes did go up, but spending expanded beyond projections. To the extent that spending did go down, it was on the defense side of the ledger, which was a bit of a historical anomaly given the post-Cold War scaling back of the military in the early 1990s. The lack of progress on non-defense spending sowed distrust among conservatives.
As we enter an era of historic debt, with Baby Boomers retiring and healthcare costs soaring, the political system is paralyzed. Republicans aren’t willing to sign on to any deal that would allow Democrats to pocket tax increases while deferring spending cuts, and Democrats see no reason to sacrifice their domestic priorities to a Republican Party that’s unwilling to increase taxes.
The origin of this state of affairs can all be traced back to six simple words: “Read my lips, no new taxes.”
