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Democrats Stroll Toward Edge of Fiscal Cliff Democrats Stroll Toward Edge of Fiscal Cliff

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NJ Daily / ECONOMY

Democrats Stroll Toward Edge of Fiscal Cliff

Simple recipe: Schumer urged Republicans to pass the Senate Democrats' tax-cut bill so talks can move forward.(AP Photo/J. Scott Applewhite)

photo of Chris Frates
December 5, 2012

Democrats did not do much on Wednesday, adopting a deliberate strategy to slow-walk Republicans to the edge of the fiscal cliff in a belief that mounting pressure from within the GOP will force conservatives to fold on tax hikes.

Their aim is to string out the negotiations to give Republicans space to wrap their heads around the idea of raising tax rates on the rich. So far, each passing day seems to add another GOP voice to the chorus coming around on tax hikes.

“We’re all in a holding pattern here waiting to see if the Republicans will come to their senses and negotiate on tax rates,” said Democratic Rep. Gerald Connolly of Virginia. “There is room to negotiate on that.”

 

On Wednesday, conservative Sen. Tom Coburn, R-Okla., said he would favor increased tax rates over limiting deductions and loopholes—a development that Sen. Chuck Schumer, D-N.Y., argued should “provide cover for the Republicans to finally shift on tax rates.”

“Our basic strategy is to let them sweat it out,” said a top Senate Democratic leadership aide. “We don’t necessarily have to do anything.”

Indeed, Democrats privately believe that negotiations will not begin in earnest until much closer to Christmas. So, much of the next week or two will be filled with sound and fury designed to do little more than run down the clock. The strategy was on full display on Wednesday as Senate Democrats called on House Republicans to approve legislation the Senate passed in July extending Bush-era tax cuts for everyone but the rich—an idea that has been flatly rejected by House Speaker John Boehner.

Instead, Boehner countered with a plan to raise $800 billion in new revenue by closing loopholes and ending deductions. But two days after Boehner’s proposal, congressional Democrats on Wednesday were still arguing that he had to provide more specifics before negotiations could move forward.

“I don’t see that the ball’s in the president’s court. Very simple: Pass our tax-cut bill, and then we can move forward,” said Schumer, the Senate’s No. 3 Democrat.

“Speaker Boehner’s proposal was not much of a proposal at all, so let’s stop with the offers and counteroffers that are leaked only to manufacture headlines in the press,” Schumer said. “Let’s get serious, cross off the biggest item on our To Do list, and get this Senate tax-cut bill passed and passed now.”

So what did Boehner do on Wednesday? He asked President Obama to come to the negotiating table and sent lawmakers home. Class dismissed.

But underlying the public back-and-forth is the very real sense among both parties that negotiations are stalled with no break in sight.

“It’s to their advantage to slow-walk it. And they’re playing rope-a-dope,” said a House Republican leadership aide. “The quicker we can force the administration into a negotiation, the better off we’re going to be.”

Obama and his Democratic allies on Capitol Hill are united and refuse to back off their insistence that top tax rates rise for the rich. And congressional Democrats on Wednesday indicated that they have no plans to talk entitlements until Republicans pass the Senate bill.

Schumer put it this way: “We’re not going to negotiate those details until we get an agreement on the tax side.”

Said Sen. Debbie Stabenow, D-Mich.: “On this bill, there’s no reason to move. Pass that bill while we’re negotiating something that will deal with the sequester and deficit reduction.”

Rep. Chris Van Hollen, D-Md., the top Democrat on the House Budget Committee, said, “They should recognize what [Oklahoma Republican Rep.] Tom Cole has recognized, that the rates are going up on the highest-income earners, and once we get that kind of recognition, maybe we can move forward on some of these other pieces.”

Republicans, of course, sense what Democrats are up to, but so far they have been unsuccessful in convincing the public that they do, in fact, want a deal. Polls show that a majority of Americans favor raising taxes on the wealthy and will blame the GOP if the country goes over the cliff.

In an effort to demonstrate that Democrats aren’t negotiating in good faith, Senate Minority Leader Mitch McConnell, R-Ky., on Wednesday tried unsuccessfully to force a vote on a White House proposal shopped by Treasury Secretary Timothy Geithner, noting that Obama and congressional Democrats “seem perfectly happy to go off the cliff.” (Geithner put any doubt of that to rest in a CNBC interview on Wednesday when he said that the Obama administration was “absolutely” ready to cliff-dive if tax rates don’t rise on the top 2 percent.)

Republican leaders say they have no plans to raise tax rates and privately suggest that the Democrats’ game of chicken could drive the country over the cliff.

Democrats are betting otherwise.

In 26 days, we’ll find out who’s right.

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