Democrats last night rejected a framework for compromise that would have included significant new revenues. They had sounded amenable to the possible deal, but their position suddenly hardened after going back to their caucus. It is almost surely an indication that they want to do everything they can to validate President Obama’s line of attack on a “do nothing” Congress. Sen. Pat Toomey had worked out a framework that he considered pro-growth and a reasonable first step toward fiscal restraint, while making a major concession to Democrats on revenue in the interests of getting a deal. Max Baucus especially had sounded open to it and a sub-group of the supercommittee had been discussing it seriously–but no more…
There had also been discussions about reforming corporate taxes to go to a 25 percent top rate and a territorial system. John Kerry, Max Baucus, and Chris Van Hollen had initially seemed open to the idea. That’s dead, too.
With the framework rejected, the operative word you hear from people familiar with the deliberations is “impasse.” Republicans are hoping Democrats come back to the table, but no one is betting on it. President Obama is probably going to get the optic he wants.
A GOP aide confirmed to NBC that the Dems have stepped out of the batter’s box after Republicans tossed them that nasty $300 billion curveball. No less than Dick Durbin called the Republican proposal a “breakthrough” insofar as it shattered the taboo on the right against new revenues, but Lowry’s obviously right that that concession is less valuable to them than maintaining voter perceptions about the GOP being hopelessly obstructionist. The lefty blogosphere’s been buzzing for days about new polls that suggest some significant number of voters think the GOP’s trying to tank the economy in hopes that Obama will take the blame at the polls next year. See TPM for a summary; the margins aren’t overwhelming but PPP at least already shows independents at 51 percent on the question. Democrats obviously believe there’s room to grow, and the first step in that growth is making sure that the image of Republicans as opposed to meaningful compromise of any sort is cemented in voters’ minds. If they can pull that off, maybe they can shift responsibility for the economy to the GOP just in time for election day. That’s been O’s strategy all along with his jobs bill, in fact, weighing it down with tax hikes in full knowledge that the House GOP would choke on it and nothing would get done. Here’s the logical conclusion.
Update: Jerrold Nadler lets the mask slip:
“I hope that they cannot reach an agreement,” Rep. Jerrold Nadler (D-N.Y.) said, according to Capital New York.
Some Democrats have suggested that they might have the upper hand in the negotiations because of the rare opportunity for deep reductions in defense spending — something some Democrats have wished for before.
Nadler said there should be significant cuts to military spending.
“I think we should have large military cuts,” Nadler added. “Why do we need, how many troops — 60, 70,000 troops — still in Germany? Why do we need troops in half the places they’re at? We’re still worried about Soviet tank armors invading Western Europe? It’s ridiculous.”
That’s lovely, but the automatic defense cuts will almost surely be rolled back on a bipartisan vote in Congress if the Committee deadlocks. Makes no sense to hope for failure on those grounds.