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Democratic leaders emboldened by this year’s electoral victories are driving a hard bargain on a potential deficit reduction package, pushing to raise taxes significantly in a short time period, while resisting major spending cuts as part of an agreement during the lame-duck session.
“Progressives should be willing to talk about ways to ensure the long-term viability of Social Security, Medicare and Medicaid, but those conversations should not be part of a plan to avert the fiscal cliff,” Senate Majority Whip Richard J. Durbin of Illinois said in prepared remarks for a speech at the Center for American Progress, a liberal think tank with close ties to the White House.
That sets a hard line against Republican demands for spending cuts, particularly from entitlement programs, in return for accepting additional revenue to bring down rising deficits.
“In the past, Democrats have demanded tax hikes now for spending cuts that never actually happened,” Senate Minority Leader Mitch McConnell, R-Ky., said Tuesday. “Not this time. A balanced approach means real spending reductions now.”
Discussions on Capitol Hill increasingly have looked at creating a framework to replace the impending tax and spending measures known as the fiscal cliff that includes a down payment on deficit reduction now with a promise for larger actions later. Part of the appeal of a legislative two-step is that there is not enough time, or political will, in the lame-duck session to make major policy decisions.
With both sides still debating positions, a senior House GOP aide said, there were no plans for a meeting of congressional leaders with President Barack Obama this week, and the aide predicted talks could continue to the end of the year. “There is not really a posturing phase. Posturing will continue until the end,” the aide said.
But the growing opposition among Senate Democrats to targeting entitlement programs in a down payment on deficit reduction will likely complicate efforts to reach a deal.
Durbin told reporters that he remains skeptical of including entitlement savings in any down payment. “Well, it could be, but I’d have to look closely at what you might include there,” Durbin said. “It’s more likely that it would be other mandatory programs. There’s a list that came out of the super committee that’s still floating around. Some of them still work.”
Senate Agriculture Chairwoman Debbie Stabenow, D-Mich., said she was hoping the Senate-passed farm bill’s $23 billion in mandatory savings could be used to help replace the automatic budget cuts. Stabenow said the White House was “very open to doing that.”
Many Republicans are likely to be unhappy with any deal that does not tackle entitlement programs in any down payment.