House Democrats to Obama: Don’t shut us out of fiscal talks

House Democrats are making it known that they won’t serve as a rubber stamp for fiscal deals that the White House negotiates this fall.
   
They say their views must be taken into account because Speaker John Boehner (R-Ohio) is likely to need their votes to pass legislation that funds the government and hikes the debt ceiling.

“In the House, when you have a got a core group of hard-right Republicans that oppose any kind of negotiated agreement, that obviously means that House Democrats have to be at the negotiating table,’ Rep. Chris Van Hollen (D-Md.), the ranking member on the House Budget Committee, told The Hill this week.

“Because [Boehner] cannot control his caucus, that gives House Democrats more leverage,” he said.

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Obama met with Democrats in both chambers late last month, in large part to coordinate the party's message before the August recess. Democrats left those meetings confident that they were in agreement with Obama on the core principles that would guide them in the coming fiscal battles.

But Obama also has a record of floating deals to Republicans, infuriating some liberals in the caucus. In 2011 and 2012, the White House engaged in secretive talks with Boehner's office, and the Budget Control Act that spawned sequestration was hatched in talks between Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Biden.

This time around, House Democrats are warning that unilateral dealmaking won’t fly — a message designed both to boost Obama's resolve and remind him that that they, too, have power in the fight.

“There is no problem with engaging Senate Republicans, with the understanding that when it comes time to engage in the details, House Democrats have to be at the table,” Van Hollen said.

Democrats insist their warnings are only preemptive because they have received assurances form the White House that talks with Senate Republicans are going slowly.

But it’s an open question where Obama’s outreach to centrist senators like John McCain (R-Ariz.) and Lindsey Graham (R-S.C.) might lead.

McCain and Graham are intent on avoiding another round of sequester cuts to Defense in 2014 and are talking about using entitlement cuts to make that happen.

Democrats are insistent that Republicans will have to give ground on their own cherished positions in order for an agreement to happen.

Van Hollen said Democrats have given the White House three firm principles: no entitlement cuts without tax increases, no boost to Defense spending without domestic spending increases, and no paying ransom for a hike to the debt limit. 

“There are a couple of principles that we have established and the administration and the president have been on the same page throughout this period,” Van Hollen said.

Democratic appropriators are also making clear that they will support a temporary stopgap measure to fund the government, an outcome Boehner said is likely, only if a process is put in place to pass regular appropriations bills.

“We are in daily contact with White House and the Senate,” a House Appropriations aide said. “We are focused on getting 2014 appropriations passed.”

The “top priority” for Democratic appropriators, according to the aide, is ending the cuts from sequestration, which they say are devastating federal agencies, hurting the economy and weakening national security.

But the aide said Democrats wouldn’t agree to any legislation that ends the automatic cuts to Defense spending unless other parts of the government are spared as well.

The demands of House Democrats could pose significant constraints to Obama and his chief of staff, Denis McDonough, in their dealings with the Senate.

Obama gave Democrats heartburn in the spring when he proposed cuts to Social Security as a part of his 2014 budget. The cuts would come from changing the way the government calculates inflation. By moving to a chained consumer price index (CPI), the government could cut entitlements and raise tax revenue by limiting the increase in tax brackets.

While House Democratic Leader Nancy Pelosi (D-Calif.) remained open to the chained CPI in last December's "fiscal-cliff" fight, she doesn't support that change to pay down deficits, as Obama proposed in the spring. And a long list of Democrats have condemned that benefit cut under almost any conditions.

“We have problems with that proposal,” Van Hollen said, though he pointed out that so far, “even the president has said that that would only be part of a large agreement.”

House Democrats have put forward their own solution for ending sequestration. The plan calls for a combination of corporate tax increases, such as ending oil and gas tax breaks, and a reduction in farm subsidies.

“We’ve weighed in. We’ve been absolutely clear that any sequester replacement proposal has to take a balanced approach,” Van Hollen said.

If no deal comes together, House Democrats say Obama will maintain the upper hand by refusing to negotiate on raising the nation’s $16.4 trillion debt ceiling.

The Treasury Department will no longer be able to avoid some kind of payment default after mid-October to November, according to an estimate by the Bipartisan Policy Center, and the GOP has been drawing up its wish list for months for any bill that increases the limit.

Obama has insisted all year that he will not negotiate on the debt ceiling, and Democrats expect him to stay the course.

“I think the president has decided we are not going have a repeat of the summer of 2011,” Van Hollen said.

— Mike Lillis contributed.