Democratic sources swear they’re not going to do it again, arguing that they can force the GOP to include revenue in a substantive way.
“What you’ve seen over the last 10 days is that Democrats have been consistent about wanting to avoid the sequester and wanting to avoid the fiscal cliff, but as long as Republicans put revenues on the table,” said one Senate Democratic aide, who pointed to last week’s tax-cut vote as an important turning point in the overall budget negotiations.
“The best way to move on the sequester is for the House to agree to our tax bill,” the aide continued.
The Senate approved a tax bill last week that would extend the current rates for 98 percent of Americans while letting the expiring tax breaks for the top 2 percent of earners expire. The Joint Taxation Committee estimated on Friday that allowing the breaks on the wealthiest 2 percent of Americans to expire would save the government $155 billion over 10 years as opposed to re-upping the tax cuts for everyone.
In a July 16 speech at the Brookings Institution, Sen. Patty Murray (D-Wash.), the former chairwoman of the super committee, stressed that Democrats were no longer willing to bend without the inclusion of revenues in any deal.
“So if we can’t get a good deal, a balanced deal that calls on the wealthy to pay their fair share, then I will absolutely continue this debate into 2013 rather than lock in a long-term deal this year that throws middle-class families under the bus. And I think my party, and the American people, will support that,” Murray said. “Anyone who tells you sequestration is going to simply disappear because both sides want to avoid it is either fooling themselves, or trying to fool you. It is going to have to be replaced, and that replacement is going to have to be balanced.”
Depending on who wins in November, however, waiting until January could be a risky endeavor for Democrats.
Republicans will continue to push the idea that the defense sequester will be devastating to U.S. armed forces, continuing the time-tested GOP narrative that their party is stronger on national security. Moreover, the $500 billion in cuts is likely to play a large role in potential swing states such as Virginia and North Carolina, which went to Obama in 2008 and are home to many military bases and contractors. In North Carolina alone, the defense industry accounts for 7 percent of the state’s gross domestic product and generates $23 billion annually, according to one of the state’s economic development commissions.
In the end, however, it seems the fear of replaying the battles of this last Congress blow-for-blow, and conceding yet again, might be stronger than the fear of losing the defense-only argument. Sources suggest Democrats are bound and determined not to repeat the outcome of the last lame-duck session, where all they ostensibly got in exchange for extending the Bush tax cuts was another tax cut in the form of the payroll tax holiday.
Lois Lerner, director of exempt organizations for the IRS, arrives for a House Oversight and Government Reform Committee hearing on the investigation of the IRS' targeting of political groups. Lerner invoked her Fifth Amendment right to not testify and caused a protest from some committee members when she offered an opening statement and engaged in dialogue with members before invoking the right.
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