Dem leaders set to drive a harder bargain than Obama on deficit reduction

Democratic leaders are signaling to worried colleagues and their party’s base that they are now in charge of deficit-reduction talks and will be tougher negotiators than President Obama.
 
Senate Democratic Policy Committee Chairman Chuck Schumer (D-N.Y.) made it clear that congressional Democrats would not accept what they consider a “bad deal” from the supercommittee.
 

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“I don’t think … the supercommittee is going to succeed because our Republican colleague have said no net revenues,” said Schumer, who handles communications strategy for Senate Democrats, during an MSNBC interview Monday.

“The American people are beginning to sniff this. They’re beginning to sniff that the other side has dug in and is not compromising,” Schumer said.
 
Many Democrats, especially liberals, have a dismal view of Obama’s negotiating skills after he cut a deal in December to extend virtually all of the Bush-era tax cuts and another in August to slash spending by $900 billion and set up the deficit-reduction supercommittee.
 
Democratic leaders are telling GOP leaders that they’re not going to win this time by digging in their heels.
 
“This is all about political will. Everyone knows where cuts and revenues can come from. You’re never going to convince the Republicans to summon the political will to buck Grover Norquist unless you stare them in the eyes and say you’re not going to blink first,” said a Democratic leadership aide, referring to conservative activist Grover Norquist, president of American’s for Tax Reform.
 
Nearly every Republican in Congress has signed Norquist’s Taxpayer Protection Pledge, which requires them to oppose all legislation that raises taxes.
 
“They’ll rethink their position that they can just wait us out. We make no apologies on insisting on a balanced deal,” said the Democratic congressional aide. 
 
Obama appeared poised to stare down Republican leaders during talks in late July to raise the debt limit. He dressed down House Majority Leader Eric Cantor (R-Va.) at one meeting and warned him bluntly: “Don’t call my bluff.”
 
In the end, however, the president agreed to a deal that many Democrats saw as a big giveaway.
 
Obama agreed to nearly $1 trillion in cuts and set up a joint select committee to find another $1.2 worth of savings in exchange for raising the debt limit — a routine action in previous Congresses. Former President George W. Bush raised the limit seven times with little pushback from Congress.
 
House Republicans were left chortling in victory.
 
Speaker John Boehner (R-Ohio) said he got “98 percent of what I wanted.”
 
House Budget Committee Chairman Paul Ryan (R-Wis.) said Republicans called Obama’s bluff and won.
 
“President Obama reportedly warned Republican leaders not to call his bluff by sending him a bill without tax increases. Republicans in Congress ignored this threat and passed a bill that cuts more than a dollar in spending for every dollar it increases the debt limit, without raising taxes,” Ryan wrote in a Wall Street Journal op-ed Aug. 3. “Yesterday, Mr. Obama signed this bill into law. He was, as he said, bluffing.”

Robert Borosage, co-director of Campaign for America’s Future, said the debt limit deal “was an unbelievable set of concessions” from Democrats.

“It had $900 billion in cuts, no revenues and no growth. It set up a committee to do more. All at a time when we thought you should be arguing about jobs,” Borosage said, reflecting the view of many liberal activists.
Obama has stayed away from the supercommittee’s deliberations and Democratic congressional leaders are now hewing more closely to what members of their party want.

Leaders have demanded that Republicans on the supercommittee agree to substantial tax increases and are refusing to back down.
 
At the same time, they are pounding Republicans on the issue of jobs. Senate Majority Leader Harry Reid (D-Nev.) has forced Republicans to vote several times on jobs legislation — including funding for teachers, first responders and infrastructure — paid for by slightly increasing the tax rate on income over $1 million.

Granted, liberal activists and labor leaders were not happy with the compromise offer from Democrats on the supercommittee, but that was a trial balloon floated to show that Republicans were staunchly opposed to raising taxes in exchange for entitlement reform.

Mike Lux, a Democratic strategists who works with liberal and labor groups, said Democrats are now more unified than they were during negotiations to raise the debt limit or extend the expiring Bush tax cuts.

“I think Democrats are now united in playing tougher and being tougher negotiators with the Republicans. There was difference of opinion about how things were done in the past,” said Lux. “I think it’s great that Democrats have come together and said we’re going to be tough negotiators.”

Lux and Democratic aides on the Hill acknowledge, however, that it’s easier to take a tough stance now than during the debt-limit and tax negotiations.

The argument is this: Republicans have much less leverage now than earlier.

In December, taxes for the wealthy and middle class alike would have gone up had Obama not reached a deal with Senate Republican Leader Mitch McConnell (R-Ky.). Obama’s advisors saw a tax increase in the midst of slow economic growth as politically disastrous.

In early August, if Obama had not agreed to steep concessions, the debt limit might not have been raised. That could have caused a national default and sent interest rates soaring, another calamity in tough economic times.
The consequences of the supercommittee failing to reach a deal are less dire. It would trigger automatic cuts, known as sequestration, beginning in 2013 — but lawmakers would easily amend those cuts through legislation next year.

Douglas Holtz-Eakin, a Republican and former director of the Congressional Budget Office, criticized Schumer for predicting the supercommittee would not reach a deal.

“For a member of the Democratic leadership to declare failure before the deadline is simply unhelpful,” he said.


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