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Democrats Set No Firm Lines After McConnell Re-Affirms Opposition To Tax Revenues In Debt Deal

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MITCH MCCONNELL OBAMA

WASHINGTON -- As the deadline for the government to raise the debt ceiling approaches, it's becoming increasingly evident that the Republicans feel emboldened to draw lines in the sand while the Democrats have yet to find an end point to the compromises they are willing to make.

On Tuesday, Senate Minority Leader Mitch McConnell (R-Ky.) reaffirmed that any plan to raise the debt limit beyond $14.29 trillion would be scuttled if it includes tax increases.

“So far, they’re saying that it’s essential,” McConnell told reporters. “We think it’s a job-killing step that shouldn’t be taken, and Republicans are not interested in going in that direction.”

Those remarks followed a Wall Street Journal story earlier in the day which revealed that Republicans had, indeed, balked at an effort to make revenue-raisers part of the final package. Congressional negotiators, led by Vice President Joe Biden, had found $1 trillion in cuts (over a ten-year period) upon which they could agree. They were hoping to pinpoint $1.4 trillion more. But when Democrats at the table said $400 billion of that remaining figure should come from closing tax loopholes or ending certain credits, GOP officials walked away from the table.

"Democrats are saying, 'Hey, here is your salad, do you want anchovies? Do you want shards of glass?'" summarized the always colorful anti-tax activist Grover Norquist. Republicans, he added, are responding, "'No, no shards of glass.' 'How about half the amount of shards of glass?' 'No, no shards of glass.' 'How about a sprinkling of shards?' 'No, no freaking shards of glass. We are making a salad here.'"

Absolutism is, more often than not, antithetical to effective -- or at least collaborative -- governance. And as the August 2 debt ceiling deadline approaches, the GOP's refusal to consider revenue-raisers is heightening fears that there will be some sort of default.

But it has proven, time and again, to be an effective negotiating tactic. As McConnell was re-stating his plank, Democrats were revamping theirs. A top Senate aide said that Democratic negotiators were looking to attach a trigger mechanism to the final debt ceiling deal, dictating that if the ratio of debt to GDP wasn't reduced in a certain amount of time, Congress would be forced to pass reduction measures that had a ratio of three dollars in spending cuts to every one dollar in tax increases. As for the bill raising the debt ceiling itself, however, the aide said "there is no set ratio" that the party had formally decided would be simply unacceptable.

In other words: lawmakers were more than ready to cut a deal that would include less than $400 billion in tax revenues.

There are, to be sure, some variables working in the Democratic Party's favor. For starters, their argument is not the heaviest of political lifts. The tax revenues lawmakers are targeting include subsidies for the oil and gas industry or owners of corporate private jets -- hardly beloved community figures.

"The way we are confronting that is saying look at the type of tax breaks they are willing to protect," said the Senate aide. "If you can break the brick wall of opposition by holding up these very indefensible examples, then you have opened up revenues more generally."

There is also a growing belief that no matter what the final product ends up being, House Speaker John Boehner (R-Ohio) will need support from the other side of the aisle to get it passed. A growing chunk of the House GOP won't sign off on any bill that raises the debt ceiling. Another chunk won't agree to a single cent of revenue increases. As a simple matter of political calculus, Boehner may have to risk losing more members of his own caucus by agreeing to a level of revenue-raisers that pleases an even larger number of House Democrats.

"We don't know where [Democratic] votes are because we don't know what's in the package," said a House Democratic leadership aide. "But Mr. Boehner is certainly aware that he is going to have to get some Democratic votes."

How far Boehner can drive apart the ratio of spending cuts to tax revenues while still keeping Democrats in the fold remains the million dollar question. The House aide said that members have not yet offered "a specific number or percentage" at which they will no longer support a deal. "There is just the general line that revenues have to be included to some extent."

Sen. Kent Conrad (D-N.D.), one of the party's most noted fiscal hawks, told The Huffington Post on Tuesday that a 50-50 split between revenues and cuts, while politically impractical, "would not be unreasonable."

"Overwhelmingly people were for a big, bold package to get the country back on track," he said. "Different people have different views of that ... If you look back on how we got into this mess, half of it is on the revenue side."

The president's fiscal commission has argued that the ratio should be set at 3:1. Already, however, a 5:1 ratio ($2 trillion in cuts to $400 billion in revenues) has been scrapped. Would the party be willing to go 11:1 ($2.2 trillion in cuts for $200 billion in revenues)?

"That's not shared sacrifice," replied one top Democratic operative who has consulted lawmakers throughout the debt ceiling debate. "Democrats should be ashamed of themselves, if they go along with a plan that undermines the core priorities Democrats have fought for during the last 50 years. If they don't fight for the middle class, how can they expect us to fight for them?"

Elise Foley contributed reporting.

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