House Democrats pushing hard from the left on budget as 'fiscal cliff' nears

House liberals have amplified their opposition this week to any budget grand bargain that closely resembles the sweeping proposal crafted by President Obama's 2010 fiscal commission.

Many policymakers are pointing to the two-year-old Simpson-Bowles plan as a template for Congress's efforts to avoid the "fiscal cliff" at year's end. 

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But members of the Congressional Progressive Caucus (CPC) are warning that they'll fight to kill any budget package that would cut Medicare coverage, Social Security benefits and safety net programs for the poor — all elements of the Simpson-Bowles plan.

"Somehow it's gotten this patina of balance and continues to be held up as a framework for a grand bargain," Rep. Jan Schakowsky (D-Ill.), a member of the Simpson-Bowles commission, said Wednesday during a CPC forum on budget issues. "That notion is misguided."

Schakowsky praised the Simpson-Bowles plan for putting military cuts on the table, but she summarized the liberals' concerns by warning that it "would not invest in the economy, would not create jobs, does not raise enough in revenues and doesn’t protect Social Security, Medicare and Medicaid." 

"Bowles-Simpson should not be the framework for solving our fiscal challenges," she said.

Rep. Lynn Woolsey (D-Calif.) echoed that message.

"Any year-end budget must be faithful to our progressive values," she said.

The comments come as congressional lawmakers begin the partisan jockeying over whether to extend – and how to pay for – a long list of benefits that expire at the end of the year, including the Bush-era tax rates, the payroll tax holiday, emergency unemployment insurance and the pay hike for doctors who treat Medicare patients. 

Lawmakers are also scrambling for a way to stave off steep cuts in defense programs included in the sequestration portion of last summer's bipartisan deal to raise the debt ceiling.

Many lawmakers point to the Simpson-Bowles proposal as the type of "balanced" plan the country needs to address all of those issues while getting deficit spending under control. 

Headed by former Clinton chief of staff Erskine Bowles and former GOP Sen. Alan Simpson (Wyo.), Obama's bipartisan fiscal commission was formed to create a sweeping plan for cutting deficits and setting the country on a sustainable fiscal path. The plan attempted to win bipartisan support by including tax hikes (to attract Democrats) and spending cuts – including entitlement cuts – to appeal to Republicans. 

The panel fell apart when only 11 of the 18 commission members supported the final proposal – three shy of the supermajority required to send the package to Congress. Schakowsky was among those who did not support the panel. 

The liberal members of the CPC contend the burden under Simpson-Bowles would fall disproportionately on seniors, minorities, the poor and other vulnerable populations who are least able to weather the cuts.

The Democratic pushback is a reminder that liberals were irate that Obama was ready to cut entitlements last summer in budget negotiations with House Speaker John Boehner (R-Ohio). 

It also highlights the election-year dynamics facing the president, who finds himself walking a tightrope between a liberal base that wants more short-term spending to boost the economy and deficit-wary independents who are balking at that plan.

The issue of deficit reduction is not playing nearly the role that it did in 2010, when an eruption of criticism against government spending gave rise to the Tea Party and contributed to the wave of GOP victories that swept Democrats from the House majority after just four years in power. 

But with the nation's debt topping $16 trillion last week – and annual deficit spending topping $1 trillion for several years running – leaders on both sides of the aisle concede that something has to give.

Complicating the debate, the Congressional Budget Office (CBO) warned that a failure to extend many of the expensive fiscal cliff benefits would threaten to send the economy back into a recession.

Still, a number of liberal economists say the image of a fiscal "cliff" is misleading. They argue that getting the policy right is more important than finalizing a budget package this year – even if it means the debate extends into next year.

"I don't disagree with the CBO's assessment," Chad Stone, an economist at the left-leaning Center on Budget and Policy Priorities (CBPP), said Wednesday. "But it's not a Wile E. Coyote moment where the economy on Jan. 2 all of a sudden finds itself with the legs spinning in place. It's a gradual slope."

Lawrence Korb, a top defense official under President Reagan and now a senior fellow at the liberal Center for American Progress, said the same dynamic is true of the military cuts threatened by sequestration.

"It really won't have an impact for a couple of years," Korb told members of the CPC Wednesday.

Fueling the year's budget debate, Boehner on Tuesday warned that partisan bickering could prevent Congress from addressing the fiscal cliff issues this year. The Speaker said he's "not confident at all" that the divided Congress can reach a deal before January, placing the blame squarely on Obama and Democratic leaders in the Senate.

“Listen, the House has done its job on both the sequester and on the looming tax hikes," Boehner said. "The Senate at some point has to act, and on both of these, where’s the president? Where’s the leadership? Absent without leave.”

The accusations weren't overlooked by House Minority Leader Nancy Pelosi (D-Calif.), who blamed the impasse on Republicans, particularly for their light schedule in September when the House is scheduled to be in session for only eight days.

"The ball," Pelosi said Wednesday, "is in Speaker Boehner’s court."