The Democrats want to raise revenue and the Republicans want to reform entitlements. Those goals would seem to be easily reconciled — just do some of each, or even lots of each. But it only seems that way because we don’t often think about why the parties want these things. Simply (and surely somewhat too simply) put, the Democrats want more money so that the entitlement system doesn’t have to be reformed, while the Republicans want to reform the entitlement system so that the government doesn’t have to take more of the country’s money or take up even more of the economy. That means that doing some of each, let alone lots of each, doesn’t give both parties what they want, it gives both parties what they are desperately trying to avoid.
For the Democrats, the policy imperative now is the consolidation and defense of the liberal welfare state, and especially its defense from the consequences of its own fiscal collapse. With Obamacare enacted, they are basically done building. They might dream of expanding the reach of one program or another, expanding the tentacles a bit or consolidating some, but their social-democratic edifice has all its major parts. The trouble is that we can’t afford to keep them all, or at least in the form and structure that the left insists those parts must have. The foundation is falling out from beneath the building just as they have finished construction. That means that liberal political power must now be used to raise money to buy the liberal welfare state more time, and it must be used to hold off efforts to change the structure of the entitlement programs. Liberals understand that if they can’t raise taxes now, with the most liberal president they are likely to get holding a position as strong as he’s likely to have, then they aren’t likely to be able to do it at all, and therefore to save the welfare state from itself. They must get as much as they possibly can in this round, and they must resist significant entitlement reforms, which would make the whole exercise largely pointless.