SPONSORED:

Dems to go on offense on taxes

Dems to go on offense on taxes
© Greg Nash

Emboldened Senate Democratic leaders are planning to go on offense on raising taxes.

ADVERTISEMENT

Democrats are planning to capitalize on the Republican Party’s poor handling of the recent fiscal showdown by parlaying it into another legislative victory.

Congressional Democrats want Republicans to sign off on $50 billion worth of tax increases to eliminate the sequester’s automatic spending cuts. The next phase of these cuts will take effect Jan. 15, when government funding will drop from $986 billion to $967 billion.

“There’s a lot of pressure on both sides, especially Republicans, after what they did to the country by following the Tea Party agenda, to show they are willing to come to the table and compromise,” said a Democratic aide.

Democrats say they would not accept any budget deal unless it includes tens of billions in new tax revenue. Their opening bid is $1 in new taxes for every $1 in spending cuts to offset the cost of ending sequestration for domestic and defense discretionary spending programs.

They add that Republicans will have added incentive to agree to tax increases because a disproportionate share of the sequester for 2014 will hit defense programs.

Budget experts estimate it would cost about $100 billion to turn off the sequester for fiscal 2014. Richard Kogan of the Center on Budget and Policy Priorities pins the number at $109.3 billion.  

Some Republicans, such as Sens. John McCainJohn Sidney McCainSenate is leaning to the Democrats, big time, with a wave Budowsky: Trump's COVID-19 death toll dominates election Democrats seem unlikely to move against Feinstein MORE (Ariz.) and Lindsey GrahamLindsey Olin GrahamHillicon Valley: Threatening emails raise election concerns | Quibi folds after raising nearly B | Trump signs law making it a crime to hack voting systems Trump signs legislation making hacking voting systems a federal crime Jaime Harrison on Lindsey Graham postponing debate: 'He's on the verge of getting that one-way ticket back home' MORE (S.C.), are focused on stopping automatic cuts to defense programs. Democrats say every dollar in averted defense cuts must be matched by protecting a dollar in nondefense domestic spending.

A GOP leadership aide said Democrats are deluding themselves if they think Senate Republican Leader Mitch McConnellAddison (Mitch) Mitchell McConnellOn The Money: Power players play chess match on COVID-19 aid | Pelosi bullish, Trump tempers optimism | Analysis: Nearly 1M have run out of jobless benefits Trump casts doubt on hopes for quick stimulus deal after aides expressed optimism Power players play chess match on COVID-19 aid MORE (Ky.) or Speaker John BoehnerJohn Andrew BoehnerPelosi and Trump go a full year without speaking Jordan vows to back McCarthy as leader even if House loses more GOP seats On The Trail: How Trump lost the law and order debate MORE (R-Ohio) would go along with any tax increases.

“Jobs are still slow to come back, ObamaCare is crushing small businesses, and the last thing to do is raise taxes,” said the aide. “Republicans will be very, very insistent that tax increases are not be part of this.”

But Democrats argue the political damage inflicted by the GOP could have unusual reverberations in the policy field.

A Wall Street Journal/NBC News poll from earlier this month showed public support for ObamaCare increased during the government shutdown, even as the rollout of the healthcare law was plagued by technical glitches.

A CNN/ORC International poll released Monday showed that 56 percent of Americans think the GOP is too extreme.

Democrats say Republicans would be more eager to compromise on taxes to erase the narrative that they have become beholden to their most doctrinaire factions of their party. But others maintain that there is no daylight between the Tea Party and GOP leaders on Capitol Hill on tax policy.

Another senior Democratic aide said Republican negotiators could meet the revenue requirement demanded by Senate Majority Leader Harry ReidHarry Mason ReidDemocrats to boycott committee vote on Amy Coney Barrett's Supreme Court nomination Democrats seem unlikely to move against Feinstein The Memo: Biden stays slow and steady in face of criticism MORE (D-Nev.) and Budget Committee Chairwoman Patty MurrayPatricia (Patty) Lynn MurrayPlaintiff and defendant from Obergefell v. Hodges unite to oppose Barrett's confirmation Overnight Health Care: Trump takes criticism of Fauci to a new level | GOP Health Committee chairman defends Fauci | Birx confronted Pence about Atlas Government watchdog to investigate allegations of Trump interference at CDC, FDA MORE (D-Wash.) by raising various fees. 

“If there’s commitment on both sides to undo sequestration because of hits to defense, people’s definition of revenues can change. There are other ways to raise revenues that are not tax increases or loophole closures,” said the aide. “There are plenty of fees out there that you could call revenues.”

Transitioning from defense to offense presents new political problems for Reid, who attributed his negotiating strength in the recent fiscal standoff to the unity of the Democratic caucus.

While Democrats stood together against making concessions in exchange for keeping federal agencies open and debt obligations paid, they are more divided on the issue of taxes.

Four Democrats, including three facing tough reelection fights next year, voted against the Senate Democratic budget plan that will guide Murray’s opening bid in talks with House Budget Committee Chairman Paul RyanPaul Davis RyanMcCarthy faces pushback from anxious Republicans over interview comments Pelosi and Trump go a full year without speaking Jordan vows to back McCarthy as leader even if House loses more GOP seats MORE (R-Wis.). They have been instructed by leaders to reach a deal by Dec. 13.

“The debt held by the public has increased 90 percent since President Obama took office because [Democratic Sens.] Kay HaganKay Ruthven HaganThe Hill's Campaign Report: Democratic Unity Taskforce unveils party platform recommendations Democrats awash with cash in battle for Senate The Hill's Campaign Report: Trump's job approval erodes among groups that powered his 2016 victory MORE [N.C.], Mary LandrieuMary Loretta LandrieuBottom line A decade of making a difference: Senate Caucus on Foster Youth Congress needs to work to combat the poverty, abuse and neglect issues that children face MORE [La.], Mark PryorMark Lunsford PryorCoronavirus poses risks for Trump in 2020 Tom Cotton's only Democratic rival quits race in Arkansas Medicaid rollback looms for GOP senators in 2020 MORE [Ark.] and Mark BegichMark Peter BegichAlaska group backing independent candidate appears linked to Democrats Sullivan wins Alaska Senate GOP primary Alaska political mess has legislators divided over meeting place MORE [Alaska] have spent like drunken sailors and now want to raise taxes to spend even more, hurting the middle class,” said National Republican Senatorial Committee (NRSC) spokesman Brad Dayspring.

Of that group, only Landrieu voted for the Democratic budget in March. That blueprint, which has been lambasted by the GOP, would raise nearly $1 trillion in new revenue through eliminating some tax breaks for the wealthy.

Democrats say the government shutdown will be a bigger issue than tax hikes in the next year’s election.

“2014 is shaping up to be a referendum on the badly damaged Republican brand that’s gotten worse in recent months after nearly every Republican Senate candidate supported a reckless and irresponsible shutdown championed by NRSC Vice Chair Ted CruzRafael (Ted) Edward CruzQuinnipiac poll finds Biden, Trump tied in Texas China could cut our access to critical minerals at any time — here's why we need to act The Hill's Morning Report - Sponsored by Goldman Sachs - Two weeks out, Trump attempts to rally the base MORE [R-Texas],” said Justin Barasky, spokesman for the Democratic Senatorial Campaign Committee.

Democrats are seeking to take advantage of their political momentum in other areas.

Sen. Charles SchumerChuck SchumerTrump casts doubt on hopes for quick stimulus deal after aides expressed optimism Schumer says he had 'serious talk' with Feinstein, declines to comment on Judiciary role Democrats seem unlikely to move against Feinstein MORE (N.Y.), the third-ranking Senate Democratic leader, will propose legislation that would reduce Congress’s authority over raising the debt limit.

It would give the president authority to raise the debt limit and merely allow Congress to vote on a resolution of disapproval to block action. The disapproval resolution would be subject to a veto, meaning Congress would need to muster two-thirds support in both chambers to stop future debt-limit increases. Schumer has dubbed it the “McConnell rule,” noting the minority leader offered such a plan a couple years ago.