How the sequester could save Democrats in December

Congress has an apocalyptic list of issues to deal with after the November elections, including the Bush tax cuts and the sequester. Any chance for compromise could rest on Democrats' willingness to be as ruthless as Republicans have been.

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    Rep. Chris Van Hollen (D) of Maryland (right) discusses President Obama's fiscal year 2012 federal budget with House Budget Committee Chairman Paul Ryan (R) of Wisconsin in this file photo.
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Whether you call it Taxageddon, the "fiscal cliff," or just a big mess, the list of crucial decisions Congress has been putting off unitl the two months after November’s election is imposing. 

The potential demise of the Bush tax cuts, the crush of the budget-slashing sequester, the decision whether to extend unemployment benefits and a payroll tax cut, and a looming battle over the national debt ceiling are an apocalyptic passel of issues.

Or, on the bright side, you might call them “action-forcing events.” 

“I’m not predicting that all of that is going to be resolved during the lame duck session,” Rep. Chris Van Hollen (D) of Maryland said at a breakfast for reporters hosted by the Monitor on Tuesday. “What I’m suggesting is in the month after the election, those action-forcing events could help bring the parties together.” 

From Democrats’ perspective, however, “coming together” means the GOP bending on its iron-ribbed resistance to any form of tax increases. And to get there, Congressman Van Hollen and his colleagues may have to take a page out of Republicans’ playbook. That is, they may have to act as if they’re willing to drive off that fiscal cliff to get what they want – and that’s not something they’re showing at the moment.

Let us explain. 

Van Hollen, the top Democrat on the House Budget Committee, is widely regarded as one of the best strategic thinkers among congressional Democrats. He was the head of the Democratic Congressional Campaign Committee, which coordinates House Democrats' election efforts, for two election cycles. He also is known for his keen grasp of fiscal issues – by virtue of his own wonky predilections and his spot on the budget committee. 

By demeanor and by ideology, he’s no Evel Knievel

But when asked why December will be different from today in terms of its dealmaking climate, Van Hollen lays out a political Grand Canyon separating the parties.

“By law, all those tax cuts expire. That’s about $5 trillion over 10 years,” Van Hollen said. “I would hope our Republican colleagues would agree that $2 trillion in revenue is better than $5 trillion in that respect. And, so, that, at least, creates a forcing mechanism.”

The effectiveness of this “forcing mechanism,” however, is dependent on Democrats' willingness to drive the car off the cliff. Or at least to make Republicans believe they would be willing to terminate all the Bush tax cuts if they don't get their way.

But no one in the Democrats' national political leadership has endorsed such a stance. President Obama argues for taxes to rise for those with incomes over $250,000, for example. But not the whole tax kaboodle. 

Then there’s Democrats' other potential leverage over Republicans: the sequester. 

The sequester would cut more than $900 billion from federal budgets during the next 10 years, starting Jan. 2, 2013. It was formed by the Budget Control Act as a sort of “sword of Damocles” to compel Congress to approve $1.2 trillion in savings over 10 years. But Congress failed, and the sequester looms.

It was designed to burn both Republicans and Democrats, with cuts to defense programs (dear to Republicans) and discretionary spending (dear to Democrats) alike. 

House Republicans this week offered an alternative to the sequester, but in the apparent tradition of this Congress, it may actually be more distasteful to Democrats than the sequester itself. That’s because the Republican alternative, developed under the guidance of Democratic bête noire and House Budget Committee Chairman Paul Ryan, relies on slashing health-care and food programs that are exempted from cuts under the sequester. 

Asked if the GOP’s proposal for ending the sequester was worse than the sequester itself, Van Hollen said, “Well, yes."

So are Democrats willing to opt for the straight sequester over the Republican alternative?

“I don’t want a sequester, no,” Van Hollen said. “The answer is, given a choice between the Republican proposal to replace the sequester and the Democratic proposal to replace the sequester, I support the Democratic proposal.”

Senate majority leader Harry Reid (D) of Nevada, however, may be pushing a harder line on the sequester.

"As long as Republicans refuse to consider a more reasonable approach – one that asks every American to pay his fair share while making difficult choices to reduce spending – the sequester is the only path forward," Mr. Reid said on the Senate floor Thursday. 

At a minimum, Democrats have divided ideas about how to attack the sequester. Will they eventually be willing to push their sequester leverage to the max?

Going all-in on taxes or threatening to take their lumps with the sequester over the objections of the (Democratic) secretary of Defense would show a level of rigidity and brinkmanship that has come to characterize House Republicans in this Congress.  

Van Hollen speaks for the public position of both parties when he says that simply pushing back December’s fiscal cliff through an extension of a year or more is untenable. 

“I’m very much opposed, personally, to kicking the ball way down the road,” he said. “I think that would be a big mistake. I think that would create more uncertainty.” 

But how will December be any different from May? 

Republicans won’t raise taxes. Democrats say they’ve gone as far as they can go with cuts without raising taxes. Stalemate. 

Unless, however, Democrats put on their crash helmets.


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