Two months in, Democrats lament lack of leverage for more tax hikes
posted at 12:01 pm on March 4, 2013 by Ed Morrissey
Looks like the Election Night buzz has finally begun to fade for Democrats. Both Roll Call and Politico have articles in which leading Democrats lament the discovery that the leverage they held on the expiration of the Bush-era tax rates didn’t translate into two years’ worth of arm-twisting. Let’s start with Barack Obama’s dissipating influence on budgetary matters, laid out on Friday night by Steven Dennis and Daniel Newhauser at Roll Call:
It wasn’t supposed to be like this for the White House and a re-elected president with political capital to spend.
But President Barack Obama is in a position of supplication to Hill Republicans, talking loudly and often about the harm of automatic budget cuts but lacking the leverage to get the GOP to buckle.
Senior administration officials had for months predicted that Republicans would cave on the sequester and agree to more taxes, even after agreeing to $600 billion in tax increases in the New Year’s Eve fiscal-cliff deal.
After all, aides noted, Republicans had caved again and again: on the 2012 payroll tax cut, on tax rate increases for the wealthy and on a debt ceiling extension.
Why not one more GOP rollover? Polls seemed solidly in the president’s favor.
But so far it’s not working out as the West Wing planned.
For one thing, the “cave” in this case came with a deadline. Had the Republicans not cut a deal on New Year’s Day, taxes would have gone up across the board, a politically untenable position for the House GOP. That was the real leverage, not the election and not the polls. The next election is almost two years away, and while the limited retreat from the GOP angered the base, they didn’t have much choice as long as the Democrats were willing to push everyone into higher tax rates as a consequence of the standoff.
Now, however, there are no more sunset provisions in tax policy. That was the upside for Republicans in that deal. By making all of the tax rates “permanent” (in other words, no built-in expiration dates), Democrats couldn’t force Republicans to readdress tax rates again. And with the GOP in charge of the House, they have no other way to get tax hikes, except by making it a budget fight in a conference committee.
That brings us to today’s lament from Harry Reid, as reported by Politico’s Steven Sloan:
Democrats toasted the New Year’s fiscal cliff deal with the belief that they had set a crucial new precedent: Tax hikes would be part of any future deficit reduction package.
Two months later, the champagne buzz is wearing off.
With about $85 billion in spending cuts — and no new revenue — kicking into gear on Friday, it appears that the exuberance expressed by many Democrats at the beginning of the year was misplaced. Efforts to avert the sequester never achieved liftoff, and Democrats are realizing that new tax revenues are off the table for the immediate future. …
Republicans flexed their muscle in the Senate on Thursday, blocking a Democratic measure that would have replaced the sequester through 2013 with a more palatable mix of spending cuts and revenue increases. A competing measure offered by Republicans that would have given Obama wide latitude in implementing the cuts also wasn’t allowed to proceed.
Democratic leaders were left to drag out the same rhetoric they employed in the weeks before the cliff deal, blaming Republicans for another round of Washington gridlock based on an ideological opposition to new taxes. Only this time, it’s not at all clear that the strategy will soon pay dividends.
“We’ve tried everything we can,” Senate Majority Leader Harry Reid (D-Nev.) told reporters Thursday. “They will not budge on anything dealing with revenue.”
He’s tried everything he can — except, of course, his job. The Senate is required by law to produce an annual budget, a task that has gone unfulfilled for almost four years. Instead, Reid has insisted on budgeting via a series of artificial crises by demanding that House Republicans reach agreements on temporary spending measures designed to keep federal budgets at the free-spending FY2010 baseline, and creating “fiscal cliffs” through obstructionism. During that period, the House passed budgets every year, and even Obama produced the legally-required budget requests, even if they arrived late four years running.
Democrats are now forced to do their jobs by producing budgets they will have to defend. No wonder they’re lamenting their plight.