Despite public calls yet again for a "grand bargain" on deficit reduction, some Democrats — particularly in the House — are beginning to concede privately that a super committee failure would be preferable to a bad deal.
Late last week, House Minority Leader Nancy Pelosi (D-Calif.) sent a letter, packaged with recommendations from Democratic ranking members, to the Joint Committee on Deficit Reduction co-chairmen, Sen. Patty Murray (D-Wash.) and Rep. Jeb Hensarling (R-Texas), urging the powerful panel to go "even larger" than its minimum savings target of $1.2 trillion over 10 years.
"The House Democratic Caucus is firmly committed to a deficit reduction plan that is big, bold and balanced," Pelosi wrote in the letter.
But Republicans have walked away from negotiations on tax agreements multiple times, and Democrats are skeptical that their GOP colleagues will be able to deliver on what Democrats believe is the "balanced" part of the deficit reduction equation.
Democrats have repeatedly said they cannot support a super committee deal that does not include revenues, which might leave them with their next best option: mandatory across-the-board cuts, known as sequestration, which were built into the original debt limit agreement approved in August. The bill calls for automatic spending reductions to take place in January 2013 if the panel fails to construct a plan or if Congress does not pass what it produces.
From the Democratic perspective, $1.2 trillion in cuts will happen regardless of whether the super committee succeeds, according to sources tracking the issue. But if sequestration kicks in, top Democratic priorities such as Medicaid, Medicare, Social Security and unemployment insurance — which were exempt from the trigger — would be left untouched. Approximately half of the mandatory cuts would come from defense spending. It's a prospect that concerns the GOP so much that top Republicans such as Senate Minority Whip Jon Kyl (Ariz.) and Sen. John McCain (Ariz.) have said they would work to nullify the sequestration agreement.
Kyl, who sits on the super committee and is a top ally of Senate Minority Leader Mitch McConnell (R-Ky.), has made it clear he would not support further defense cuts, which would make it very difficult for the panel to include them in any final package. Meanwhile, Republicans are pushing hard for Democrats to make good on their professed willingness to rein in social safety-net programs.